Have Your Say: Beating the charges

Increasing numbers of consumers who think bank charges are unfair and illegal are taking their bank or building society to court to recover fees they have paid in the past.

Although the banks say their charges are both legal and reasonable, in many cases they are paying-out to customers rather than defending themselves in court.

We asked for your comments, a selection of which are below.

This debate has now closed.

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I prefer the French system where overdrafts are not allowed. So customers ensure that their accounts are kept in credit. I have always kept my current account in credit and with cash machines and internet banking, you can easily find your balance. If you need to borrow (most of us do from time to time), get a loan. As an additional advantage French bank customers can write cheques without a guarantee card. The retailer knows that the cheque will be honoured. Oh - I should admit that I am a retired bank manager!
Brian S, Shropshire

The government has deposited a swathe of people of limited means into the banking system Charles Williams, Greenwich

I am caught up in a negative spiral of ever-increasing debt despite my efforts to clear the deficit. During the time it takes to clear my benefits, if any direct debits are demanded the bank charges me £30. It has insisted on applying hundreds of pounds in charges which continues to push me further into debt and so the spiral continues. I sought advice from a local debt centre but to no avail. Now I am in debt with utility companies with nowhere to turn for advice. I feel that the government has deposited a swathe of people of limited means into the banking system who have become easy money for the banks. The majority of these people like myself are trying to manage on a very low income and are powerless to defend themselves.
Charles Williams, Greenwich

Having exceeded my overdraft once too often I decided to follow the Which? recommended course of action. Having gone down the letters route and following the bank's final written response to my complaint, I am left with two options: the Financial Ombudsman (which is understaffed and overworked) or the Small Claims Court. I am currently going down the FOS route because I didn't really want to have to resort to a court process. The charges of £30 for going over the overdraft is madness. Why don't the banks prevent cards being used in order to avoid this happening? Charges for unauthorised overdrafts and returned cheques are, I fear, a major revenue stream for the banks.
Edward Hogan, Ledbury, Herefordshire

I would like to take Joanna Elson up on her suggestion to talk to your bank early if you get into difficulties. I went to my bank when I knew redundancy was imminent to explain that I may be unable to pay back bank loans accrued whilst at university. I was laughed at and told I was stupid not to have unemployment cover. I left feeling small, humiliated, and with nothing resolved. I went back the next month when things were getting serious. A different adviser told me they could give me a £42,000 loan! I left extremely disgruntled and concerned. My loans were small - I would say £15,000, but I couldn't live with the worry and in the end made myself bankrupt.
Gweet Tanner, Winchester

Families are being pushed over the edge by these charges Phil C

My ex-partner has been charged over £1000 in charges in nine months and has no way whatsoever of ever repaying these charges. The charges are eating up her two kids shoe money, holiday money and clothes money. The bank offered some in refunds, but not all. The government wanted all benefit recipients to be inside the banking system. It was like throwing the most vulnerable to the wolves. Families are being pushed over the edge by these charges.
Phil C

The banks have created a debtor underclass by offering easy money to consumers who the moment they fall into arrears suddenly find they are paying huge fees to the banks. I also believe this has been a deliberate policy on the part of the banks to create another captive income string. They don't want to go into court as they will have to justify their charges. There is a real scandal going on which the media is either unaware of or don't for some reason want to get involved in. The banks are also forcing the clogging up of the courts by forcing almost every claimant to issue County Court proceedings before settling in full pre-hearing.
Chris Harley, Bridport

The problem for me and I suspect many others is direct debits. The transactions cannot be changed easily or delayed by the payee. Banks and utilities aggressively marketed direct debit, but didn't point out that to change the mandates in any way, for instance to delay by a few days, you have to contact each payee individually. Compare that to paying by giro/cheque where you can easily delay payment until your account is liquid again. To sting a person for all their regular direct debits because a payment is delayed by a few days borders on extortion.
Mark, Reading

The charges are extremely disproportionate. They are ripping of poor customers like me. Just this year I have been charged when I put the money in the same day as the direct debit. The bank said the direct debit goes first thing in the morning; so money put in on the day will not count. However, the account does not go overdrawn until the next day. They charge preposterous amounts, such as £35, and then do not pay the direct debit. They should be limited by law.
Miguel Mendes, London

At the age of 16 when I was at college and not working I began to get charges of £30 it got me into severe debt. At the age of 17 the bank asked me to take out a loan to get myself out of the mess. The charges totalled £650. The bank gave me a loan for £900, but I am now £6,000 in debt. I believe the way they have handled my account is terrible. I'm now working ever so hard to pay all these charges back. I am currently trying to claim back £2,500 from the bank for unfair bank charges and don't believe they should be allowed to do this as it causes a lot of stress and ruins peoples lives.
Oliver Foster-Burnell, Taunton

If the banks are saying they will have to abolish free banking if they reduce penalty charges then surely they are admitting that penalty charges are subsidising everybody's banking costs? Thus the charges must be greater than the cost involved, and so they are acting illegally.
Roger Barton, Sheffield

The stress which our bank has caused us is immeasurable Carole Benton, Hastings

Our bank has all but forced us into bankruptcy. Our credit history is ruined and we have had innumerable penalties imposed on us by companies whose direct debit and standing orders have not been paid, and all the while our bank takes between £100-£200 from our account each month calling them "charges". We have written, pleaded, seen managers, telephoned, and occasionally have had the charges refunded - only to then find that, with no notification, the refunds have been reversed out again two days before the deposit of the salaries - and the cycle starts all over again. We have tried to shut down the account and open another but we cannot meet the conditions which are being asked for by the new bank. We are getting to the point where we dread every telephone call and letter - the stress which our bank has caused us is immeasurable - and we cannot understand why we are being treated in this way. Our original crime was to stray £15 above our overdraft limit for less than two days - frankly I wonder if identity theft might have caused us less hassle than this corporate theft!
Carole Benton, Hastings

To say banks are making the money to provide free banking for better-off customers from the worst-off customers is simplistic and misleading. They make most money out of loan interest and customers' deposited funds upon which they also earn interest, plus money "on float" - the use of customers' money between the time a cheque is debited and the time it reaches its destination. It is true that charges for defaults are unreasonably high but if customers persistently break their agreements, the banks should be entitled to make reasonable charges - with stress on the word reasonable.
Richard Lewis, London

I was surprised to hear that some people feel justified in claiming back these charges Susanna Beves, Berlin

The banks exist in order to make money, not to subsidise my living. If I spent somebody else's money without warning, I would expect to pay a penalty. I agree with the person who said that spending on an unauthorised overdraft should be considered as theft of the bank's money. I was surprised to hear that some people feel justified in claiming back these charges, without, apparently, going to speak to anybody at the bank when the penalty was levied. In Germany, there is no free banking, and, if you want a current account, you pay a standard quarterly charge. The attitude here is that you pay for the convenience and the service provided.
Susanna Beves, Berlin

The BBA spokeswoman seemed unable to decide whether the charges subsidised free banking or not. If they do, then they do not reflect their true cost and are illegal, but if they don't, then the banks can't threaten the removal of free accounts as a consequence of their reduction. The banks' reluctance to go to court is excused on the grounds that it would cost more to defend lots of cases. This is nonsense - once one case was heard, the legal situation would be resolved and further hearings would not be necessary. Presumably that is just what they are afraid of! Finally, whenever I quiz my bank, I am assured that letters are generated automatically by their computers and staff have little control before the event. I suggest that the cost of producing a letter is little more than the paper, envelope and stamp. Shall we be generous and say 50p?
James Pickett, Isle of Wight

I have a Swiss bank account as I lived there for a short time. I keep enough in it so that the interest covers my charges. If I have a bank charge they tell me 14 days beforehand (the Swiss statuary equivalent of the British 28 days). It's like getting a proper bill. I don't get into a situation as compared with my British bank which charges me immediately making me go into the red then adds charges and the cost of a letter all before I know what's happening.
William Hutt, Debenham

An unauthorised overdraft is essentially theft John Booth, Letchworth

The cost of an unauthorised overdraft is much higher than £2 or £3. The banks have to set up procedures that cover unauthorised overdrafts. This involves senior management monitoring the procedures as well as the staff and systems involved in implementing them. In addition to these overheads, each overdraft involves costs in terms of letters, blocking and unblocking direct debits, blocking cheques, handling enquiries from those who are owed money and so on. There is also the lost opportunity cost from the reduction in cash available for the bank to invest.

An unauthorised overdraft is essentially theft and I have no sympathy for those who think they can have a free ride. I am sure the banks can justify something like a £10 to £20 charge for going into the red as well as a charge of a few pounds for each additional transaction resulting from the overdraft. If the banks are to be expected to take individual circumstance into account when setting the charges, further costs will be incurred which the banks will have to recover.
John Booth, Letchworth

I rang in great distress believing that I would be left only £9 to live on Audrey Davis, Wolverhampton

As a pensioner I honestly believed that a basic account would protect me from making a mistake and overdrawing. However my (former) bank, because I had made an error, threatened to take £75 from my basic pension of £84. It only stopped because I rang in great distress believing that I would be left only £9 to live on. I was also advised that I must not draw any pension during the following week! It has taken them two months to get this account closed.
Audrey Davis, Wolverhampton

I have a bank account I do not use very much. It went overdrawn by almost £20 this week and I have been charged £30 which I feel is way too much. I received a letter advising me of the charge a couple of days ago. I think they should send a letter stating that unless the matter is resolved within seven days, there will be a charge placed upon your account. A suitable charge would be £10. They also charge another fee on every debit that is unsuccessfully trying to obtain money but cannot. Again this is way too high.
Mark Playford, King's Lynn

I think first offenders should have a free warning. But the banks should throw the book at parasitical serial offenders. Why should we pay for them? And stealth charges should be banned, especially some of the banks dipping their fingers into our telephone bills with 0870 numbers.
Chris and Jackie Grey, Guildford

Basic bank accounts do not allow the use of a debit card, which is a big limitation. Whereas, with accounts that have debit cards, it is impossible to find one that does not automatically allow some overdrawing, and thus charges. I am a parent of a woman who has learning disabilities. I would like to be able to find her a bank account that can allow her the independence of being able to go out to shopping without having to constantly refer to me, but am loathe to have her run the risk of going overdrawn while learning to manage her own money.
Carole Mathurin, London

The UK government guarantees a bare minimum in state benefits and wage, and it is protected up to the point it reaches the banks. However, once in the accounts, the banks are taking the money in charges and hence depriving these low income families. Thanks for looking after your most needy English families Tony! How can this be lawful or right?
David M, South Manchester

I don't see why I should subsidise the cost of other people's reckless spending David Breslin, London

I've no sympathy at all for people who incur bank charges. People need to start taking responsibility for themselves. If you can't organise your finances and stay within your overdraft then why shouldn't the bank punish you? Charges are high in order to discourage you from letting it happen again - if charges were only a few pounds then it's likely most people would ignore them and keep on spending, ending up in even more debt. I hope this doesn't signal the end of free banking - I don't see why I should subsidise the cost of other people's reckless spending. Instead we should ban them from having bank accounts. That way they can only spend what they earn, and save under their mattress.
David Breslin, London

The banks are being less than honest. I've just helped my daughter to recover £1,010 from her bank. Their processes are all automatic and there's no way that their charges reflect work done by human beings - they were merely penalties, which are unlawful. They say that they are settling cases because of the cost of fighting them, which they wouldn't be able to recover. But they'd only have to fight and win a few and all the rest would dry up. They know they cannot win. It's a disgrace that customers have to take them on individually.
Phil Jones, Swansea

If they keep closing accounts where customers are only exercising their legal right, they will have no customers left G Wilson, Cockermouth

Time for the customers to take charge here, the banks have done this for far too long. The websites the banks refer to are growing fast, soon there will be too many customers claiming back their charges, too many for the banks to take the pathetic retaliatory action they are taking at present, of closing accounts. If they keep closing accounts where customers are only exercising their legal right, they will have no customers left.
G Wilson, Cockermouth

I am on less than the national average salary but have never in nearly 30 years of having a bank account been liable for charges. My sister who gets income tax credit is also able to keep from getting bank charges. I therefore have no patience with those on the programme who whine when they get charged for taking money that is not theirs (which is what going overdrawn without prior arrangement is).
Gillian Hanhart, London

The richer you are, the bigger account you have and the more worried the bank is about losing your account, so the less they charge you (and even waive the charges). When my husband left his bank a few years ago after 30 years as a loyal customer he was not even asked why. The woman on your programme who said banks want to keep their customers is being paid to be very misguided. Banks only care about losing customers who have a lot of money.
Kathleen O'Neill, Hayling Island

Anyone who ends up paying £800 plus over a year has acted negligently by ignoring their statements Keith Walton, Walsall

When I worked in a bank, I was always willing to listen to enquiries about charges was willing to reduce or refund them or ensure that the charges for one month did not automatically result in a further charge the next month. Anyone who ends up paying £800 plus over a year has acted negligently by ignoring their statements and not approaching the bank to try to sort things out. If a cheque is issued when the money is not in the account, or when a direct debit is claimed and the money is not there, this is theft, because you are taking money that is not yours. There is, of course, the argument as to who should set the penalty for this action, but until there is some legislation, it can only be the banks who do this.
Keith Walton, former bank employee, Walsall

The banks have had it their own way too long. It is about time they got a slap on the face. However, the banks make loads of money from the way our cheques clear. They can still offer free banking and still turn in a healthy profit without ripping the punter off. Perhaps we should place our money in credit unions. As a former bank employee I was disgusted at the levels the bank would go to make more money.
Carl Thomson, Newchapel, Stoke on Trent

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The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.