Last month I went into the red on my bank account: silly me. I was £11 overdrawn for 3 days. My bank kindly included a letter with my monthly statement (they couldn't afford a separate letter - or to call me) informing me of a £28 charge being applied to the account.
Not great, but fair enough: they fine me for breaking the rules. They don't make much money out of me other ways, so I let them have this from time to time to stop them getting any ideas about charging me for a bank account (like First Direct do).
Anyway: the next month I received another letter with my monthly statement. Apparently they intended to take another £28. Why? Because the 3 days I was overdrawn happened to span two (arbitrary and unknown to me) statement periods. To their mind, I'd been overdrawn in two reporting periods, so 2 x £28.
I spotted this, called them and was happily told my Customer Service Representative would 'discuss it with the branch manager': it remains to be seen if the second charge applies.
So I'm happy to read today that 'Banks lose overdraft charges case'. Why? Not because I think £28 as a fine is too large for the crime (which I do). Not because I despise the money-grabbing, immoral capitalists that are bankers (which I do). I'll tell you why:
The banks rewrote their terms and conditions about a year ago when all this hoohaa over charges was bubbling to the surface. They brought in some kickass lawyers. Previously, the £28 was straightforwardly a charge for going overdrawn - and therefore subject to regulation over what can be charged. They now claim when you attempt a transaction that will put you overdrawn you are requesting an overdraft, a service from the bank. The bank charges you £28 for considering this request for a service. It's not a fine: certainly not! It's a service - and thus not subject to regulation: voila.
I wouldn't often make financial service requests after 5 pints at 4.30am via the keypad of some underground tavern; my bank apparently disagrees.
Let's hope the courts introduce a little common sense back into the equation.