Can I sue a bank for, what I consider to be, an unreasonable fee? My bank recently merged with another and I was charged a $40 dishonour fee when there where inadequate funds to pay a personal loan I have with the same bank. This fee did not exist with my original bank.

I really doubt it. You can dispute it at the bank and tell them that you do not think it is fair and why it was not fair. Sometimes they will agree, to a one time, return the fee if you prove it wasn't fair. If they advertised or had brochures and literature available with the new rates then it may be more difficult to recover anything. But I really doubt you can sue them (and win)
Also it really wouldn't be worth the time and trouble to sue. It can cost $50. Or more to sue and you can lose.

Hello must:

Sure you can sue a bank. Find out who the agent is for the corporation in your city, and serve him with your small claims case.

excon-

Definitely you can sue. But will you win? In my opinion not a chance! When you signed for the account you agreed to any fees that they would charge and, that those fees would be subject to change.

To make the matter even harder this is not a proactive fee, but a punitive fee. If you had not bounced a check you wouldn't have incurred any fee.

Fees can be changed at any time and you would have gotten some notice of the chance most likely in a monthly statement on a page with lots of small print.

You can sue, but you will lose.

This is very easy, just don't write any checks when there is no money in the account then there will be no check charges

I gave up on banks years ago and I only use money orders.
I use to dispute the bounce fees that caused a no win snowball effect. They usually gave me back some of my bounced fees but it got ridiculous.
They would claim they alerted me that they took out the fee
But I never got the alert until I deposited more money to cover another check which bounced only because I didn't know they took out a fee.
< Money orders the best way to go!!

You can sue anyone you want to sue, but will you win? Remember lawyers cost money, who has MORE money? You or the bank? My vote is the bank.

Thanks for all the input so far. Jut to clarify, I didn't write a cheque - the bank tried to take a personal loan payment when there were no funds in the account. I know there is a law which states that banks are not allowed to charge more in fees than there actual costs. I therefore assume that to charge $40 for an internal transfer is unreasonable. Can anyone elaborate on this?

Never heard of such a law, in fact their fees have been upheld in every case I have heard of.

This sounds very much like the campaign that is currently running in the UK with excessive bank charges.

Now it really depends on where you are located as laws vary a lot between countries.

In the UK we are using the Unfair Terms in Consumer Contracts Regulations (UTCCR) as well as penalties under common law.
The bakns ARE allowed to cover their costs, but it is considered a penalty under common law for them to profit from this activity.

[QUOTE=Comments on this post
mustshop75 agrees: As soon as I can pinpointthe law I will defopost it. It's probably different in the US to Oz and it's little known which is why everyone not doing it but those who have, have won! QUOTE]



I just searched again in several categories and can't even find a case on this so I am curious to see what you have found and where it applies.

As you say, if this is correct, the public should know about it.

Doesn't matter whether it was a written check or an electronic transfer. You authorized the debit to your account. You failed to manage that account to make sure there were sufficient funds to cover the debit. Therefore, they were within their rights to charge a fee.

Unless you can find some law that states that they can only charge for the cost of the services performed (a law I highly doubt exists), then you don't have a case.

That's why I have overdraft protection on my account. That's also why I generally look at my balances every day. Just in case a mistake was made.

With modern electronic banking there really is little excuse for bouncing a check. There is a Chase commercial showing a girl climbing a rock face and getting a text message on her cell that her balances were low. Then showing her calling and transferring balances while hanging from the rock face. A bit far fetched since I doubt if her cell had coverage, but the idea is there.

Thanks for all the input so far. Jut to clarify, I didn't write a cheque - the bank tried to take a personal loan payment when there were no funds in the account. I know there is a law which states that banks are not allowed to charge more in fees than there actual costs. I therefore assume that to charge $40 for an internal transfer is unreasonable. Can anyone elaborate on this?

No, it's not unreasonable. If you have a loan at a bank as well as an account there, the bank is allowed to go into that account to get that payment. It happens to my sister all the time. And just because your original bank didn't charge you $40 doesn't mean a hill of beans because they're not your original bank anymore.
I have no idea what you're talking about when you refer to the banks not being allowed to charge more than their actual costs; are you actually trying to imply that your loan payment was less than $40?

And finally:

mustshop75 disagrees: Thks Scott. I know there is such a law in Oz that says banks aren't allowd to profit from these activities, only cover costs. A couple of people have sued the banks and had all their fees (ever) returned.
If you've already got the answers, then don't go looking for them and certainly don't give people bad reputation. You're abusing the site policy just because you don't like what you're hearing.

Im not saying that the loan was less than $40, Im saying it did not cost the bank $40 to try and transfer funds from one account to another, therefore they have profited by charging me $40

Yes, I can elaborate.

Im saying it did not cost the bank $40 to try and transfer funds from one account to another, therefore they have profited by charging me $40

The bank isn't charging you $40 to complete the transfer; they're charging you for insufficient funds. That is the fee they're allowed to charge and I'm quite sure you were notified of this. Good lord, how do people like you operate in the real world?

What are you talking about! The charge I was notified about was $15 - the bank was merged, I got charged $40 - no notification. I am merely asking for clarification on the law in Oz that states banks fees must merely cover their admin costs - they are not allowed to profit from the fees. See the previous answer, someone has quoted the similar law in the UK. The laws are clearly different in the US to those in the UK and Australia.

Probably not. Quite frankly, I can't believe you keep dragging out this post because the filing fee is going to cost you more than the $40. You're a joke.

Not sure why you have resorted to personal insults when I am merely asking for clarification on a particular Australian law. Strange!

This website explains the law somewhat:

VCAT cracks down on unfair contract terms (http://www.minterellison.com/public/connect/Internet/Home/Legal+Insights/Newsletters/Articles+-+current+newsletter/A-E-VCAT+cracks+down+on+unfair+contract+terms)

Because you're not asking for clarification; you keep giving negative ratings to people who are trying to give you advice and in doing so, are violating the very policies of this site.

People who are stating that this law doesn't exist are incorrect - they should not comment on something they have no knowledge on. You insulting me is the most negative thing on this thread so take your own advice. I have posted an exampleof this law, most people are interested to know my findings. Oh and it would not cost me more to file the claim as, if successful, I would receive all fees ever paid. (as stated previously) Please read the whole thread before offering insults.

People who are stating that this law doesn't exist are incorrect - they should not comment on something they have no knowledge on. You insulting me is the most negative thing on this thread so take your own advice. I have posted an exampleof this law, most people are interested to know my findings. Oh and it would not cost me more to file the claim as, if successful, I would receive all fees ever paid. (as stated previously) Please read the whole thread before offering insults.


Have you actually read the rules of the site? Ask Me Help Desk - FAQ: Terms of Service, FAQ and How To Use This Site (https://www.askmehelpdesk.com/faq.php?faq=vb_faq#faq_gen_navigation)

So far I've been on your side - if there are sides to this.

You are giving "incorrect" marks to people (my friends and colleagues, I might add) who have given you absolutely correct legal advice because you don't like that advice. People answer questions based on education, experience, knowledge or "I think" and they usually add that qualification to their answer. We all answer serious problems and petty problems and don't tell people to go away because we don't like the question or think it's petty. You, as the person posting, are expected to show that same respect to the people attempting to help you.

You have managed - in some 6 posts - to collectively insult people who have posted some 36,000 times.

So go ahead with your lawsuit and let us know what the Judge decides. In the meantime I think it's all been said.

I haven't read the 'Terms of Service' only found this site a couple of days ago. It was never my intention to give negative feedback.

I did not expect to be called a 'joke' or asked 'how do people like you operate in the world' - as far as I was concerned I was merely looking for clarification on a law.

To be personally insulted was completely unnecessary and somewhat childish. I apologise if I have inadvertanly given negative feedback - that certainly was never my intention. I genuinely appreciate those who have taken interest and offered opinions or indeed advice. It is my mistake, I should have read the rules of the site to understand what I was doing when flagging that the advice was incorrect.

I do not believe I have personally insulted anyone, even refrained when called 'a joke' - which is a personal insult.

First off, while this site is international it is primarily US based. Since you gave no indication of your location, we answered based on US laws. Yet, you criticize us for not knowing that you are from Australia. Had that been mentioned up fron or had you indicated your general location in your profile, we would have answered differently.

Second, I read the article you linked to and see nothing to support what you have described. A fee of $40 for bouncing a check is not unreasonable in the US, so I would doubt that its unreasonable down under.

When the banks merged you were probably sent notice of changes in fees, etc. You had the opportunity at that time to choose to move your accounts. You didn't, which constituted a tacit acceptance of the terms.

And, as I indicated earlier, this fee was punitive. It occurred because YOU mismanaged your account. I can't see any court in the world finding in your favor.

Finally, as has been pointed out, your are using the Comments feature in violation of the rules of the site. All sites like this have such guidelines and it is a good idea to familiarize yourself with them before using the site.

I agree that some of the responses were a bit harsh. But try looking at what you were asking. You wanted to sue your bank because you let the balance get too low to cover payments that were scheduled. And you felt the fee for this was too high. I have to agree that you were not being realisitic.

People who are stating that this law doesn't exist are incorrect

If you already know the law then why are you asking? It seems like you already have the answer to your question, or is there something more that you are looking for?

Thanks Scott. You're right I should have mentioned I was from Oz I genuinely only just found this site and didn't realise it was predominatly US based. I did however mention several times that I didn't bounce a cheque - the bank tried to take funds for a loan I have with them when there were no funds in the account. This section of the wesbite I referenced shows a gym doing a similar thing and the judge deemed it unfair:

Judge Harbison held that almost all of the challenged provisions in the standard form membership contract were void based on 'unfair term's provisions. Some of the terms that the Judge held to be unfair included that:


... the gym could automatically debit funds from members' bank accounts if they failed to make payments by due dates;

The site also goes on to specifcally mention banks:

For example, the Office of Fair Trading in the United Kingdom is currently investigating whether various bank overdraft charges are unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (UK) (which are similar to the 'unfair terms' provisions in the FTA).


Again, I apologise that I have inadvertently given negative feedback - it definitely was never my intention. I have just read the link you provided - thanks. I should have read this section previously - my mistake. I now understand the functions of this site and if you could undo my previous errors I would appreciate that.

Again, I am grateful to all those who have taken an interest in my question and who have offered advice and opinions. My misunderstaning of the functions of the site does not warrant personal insults and name calling. - Surely, unlike my misunderstanding due to be new to this site, name calling is an intentional breach of the sites rules!

I haven't read the 'Terms of Service' only found this site a couple of days ago. It was never my intention to give negative feedback.

I did not expect to be called a 'joke' or asked 'how do people like you operate in the world' - as far as I was concerned I was merely looking for clarification on a law.

To be personally insulted was completely unneccesary and somewhat childish. I apologise if I have inadvertanly given negative feedback - that certainly was never my intention. I genuinely appreciate those who have taken interest and offered opinions or indeed advice. It is my mistake, I should have read the rules of the site to understand what I was doing when flagging that the advice was incorrect.

I do not believe I have personally insulted anyone, even refrained when called 'a joke' - which is a personal insult.


By rating someone's answer with a disagree (a reddie) you have given negative feedback.

As for the terms of service, you were required to read it and agree to follow it when you joined this site. If you chose not to read it how is that our fault?

We are all human beings, none of us likes to be told that we are wrong, especially when we volunteer here to try and help people.

No, we aren't all experts in the law, but when we are just giving an opinion, not stating fact, we usually say so. It's up to you to weed out the good advice from the bad.

But, Scott and Judy are two very respected members of this site, and they know a lot about the law. If it were me I'd listen to their advice, they wouldn't steer you in the wrong direction.

Just remember, this is a free site, sometimes you get what you pay for. ;)

Altenweg, I have now apologised twice for my mistake in not fully reading the terms.
CURLYBEN thank you for your reference to the UK case - I have now found the answer I was looking for :)

I posted at the same time as you did, sorry. :(

I'm glad you found your answer.

Good luck. :)

I'm sorry if you were insulted; personally, I find it insulting when you come here looking for advice and then tell everyone that you already have the answer.

Was I harsh? Yes, and I apologize. I was harsh because you don't seem to understand the situation you're in. It was your responsibility to make sure there were sufficient funds in your account, not the bank's. They tried to automatically withdraw a payment from an account that was your responsibility. You agreed to pay a fee for insufficient funds, and now you're trying to argue that there's a law in Australia which keeps the bank from collecting that fee. There might be, but nobody on this site has ever heard of it and you have yet to provide documentation.

So for my earlier words, I apologize again. It's one of those days and I took it out online; I was upset with you for abusing the rating system and for not accepting what people were telling you as accurate.

this8384, I didn't already have the answer. This site -in fact CURLY BEN, gave me the answer I was looking for.

The bank tried to take a payment without notifying me, therefore I had no chance of putting sufficient funds in. I agreed to pay $15, they took $40. My point was never that I should not pay a fee I was merely asking if they are allowed to charge what they like.

Curlyben has helped me track down that answer. In Australia, as in the UK, they can only cover their costs not profit from fees.

Thank you for your apology. I did provide a link which states a judges findings for a gym - it's the same thing with banks.

this8384, I didn't already have the answer. This site -in fact CURLY BEN, gave me the answer I was looking for.

The bank tried to take a payment without notifying me, therefore I had no chance of putting sufficient funds in. I agreed to pay $15, they took $40. My point was never that I should not pay a fee I was merely asking if they are allowed to charge what they like.

Curlyben has helped me track down that answer. In Australia, as in the UK, they can only cover their costs not profit from fees.

Thank you for your apology. I did provide a link which states a judges findings for a gym - it's the same thing with banks.



I can't find Curlyben's post - would you please post the info for the benefit of anyone else who is curious about the law.

I don't see that gyms and banks are in the same category but I have to read the law to be sure.

First, let me ask whether the loan payment was an automatic payment or whether you were late on the payment?

Second, from that article it appears that Australia doesn't believe in caveat emptor (let the buyer beware). It looks like it seeks to protect people from being their own worse enemy.

Scott, I was 4 days late on a payment due to being rushed into hospital for surgery... banks don't care for the reason though :/

JudyKayTee, CurlyBen said:
In the UK we are using the Unfair Terms in Consumer Contracts Regulations (UTCCR) as well as penalties under common law.
The bakns ARE allowed to cover their costs, but it is considered a penalty under common law for them to profit from this activity.

That prompted me to find this article:

VCAT cracks down on unfair contract terms (http://www.minterellison.com/public/connect/Internet/Home/Legal+Insights/Newsletters/Articles+-+current+newsletter/A-E-VCAT+cracks+down+on+unfair+contract+terms)

The article gives a case where a gyms policy was deemed to be unfair by a judge but also states that banks policies where being investigated under the same law. I remember watching a morning news programme a while ago, they stated that banks high charges were illegal as they are only allowed to cover costs and not profit from fees.

It's a shame more people don't know of these UK and Australian laws as banks are getting away with illegal fee charges.

Scottgem, not sure if that's a good thing or bad thing really... interesting findings though.

Thanks again for everyone's interest, advice and opinions. Hope to be more active on this site - now that I understand how it all works :)

Great idea for a website :) :)

Scottgem, not sure if that's a good thing or bad thing really...interesting findings though.

Thanks again for everyones interest, advice and opinions. Hope to be more active on this site - now that I understand how it all works :)

Great idea for a website :) :)


Are you going to post the information so that other people will be informed?

JudyKayTee, I posted the article I've found so far above. :)

Am still investigating further

Did you find the link JudyKayTee? What did you think?

Curlyben said: In the Uk we are using the Unfair Terms in Consumer Contracts Regulations (UTCCR) as well as penalties under common law.
The bakns ARE allowed to cover their costs, but it is considered a penalty under common law for them to profit from this activity.

That prompted me to find this article:

VCAT cracks down on unfair contract terms

The article gives a case where a gyms policy was deemed to be unfair by a judge but also states that banks policies where being investigated under the same law. I remember watching a morning news programme a while ago, they stated that banks high charges were illegal as they are only allowed to cover costs and not profit from fees.

VCAT cracks down on unfair contract terms (http://www.minterellison.com/public/connect/Internet/Home/Legal+Insights/Newsletters/Articles+-+current+newsletter/A-E-VCAT+cracks+down+on+unfair+contract+terms)

Mustshop, when the banks changed the T&C, and hence the fees, did they notify you in WRITING at least 30 days before the new charges where going to be used?
If not this makes for a stronger case against them.

Ps I have adjusted the previous reddie as they where really unjustified.
As you have already noticed Mustshop, AMHD is a truly international site, so location information is extremely important.

After all I'm from the UK and had great success with the whole UTCCR issue.

Have a look at the Calling All Brits link in my siggie.

Curlyben, thanks so much all round! You are a star :) :)
Am from the UK originally so have already read your link - most interesting and useful!!
Thanks again. Claire :)

Fighting big brother is no easy task but since you have been treated unfairly I would contact your attorney general and file a complaint with them.I know that in New York they do a fine job of answering claims and at no cost.
If the bank was negligent than sometimes just a letter from the attorney general is enough to make them rethink their position.
Good luck!

Fighting big brother is no easy task but since you have been treated unfairly I would contact your attorney general and file a complaint with them.I know that in New York they do a fine job of answering claims and at no cost.
If the bank was negligent than sometimes just a letter from the attorney general is enough to make them rethink their position.
Good luck!



The problem is that he's in Australia - no Attorney General. That was the misunderstanding when the thread started.

Comments on this post
mustshop75 (https://www.askmehelpdesk.com/members/mustshop75.html) agrees: No they definitely didn't! Thanks for that - your advice has been incredibly helpful! THANK YOU!

Are you sure? I get notices all the time from my banks with lots of fine print that I barely read. For example, recently my bank imposed a fee for an automatic transfer from my overdraft protection line. I have no recollection of seeing this, but my bank was able to provide evidence of a mailing where that was mentioned.

So I would be very surprised if this information about raising fees was not included in the fine print of some mailing.

I still have to go back to the fact that this charge is the result of your actions or lack of actions to maintain the balance in your account. I doubt that a court of law would reward you for that.

but since you have been treated unfairly .... If the bank was negligent than sometimes just a letter from the attorney general is enough to make them rethink their position.
Good luck!

The problem here is I see NO evidence that the OP was treated unfairly. He was late on his loan payment and the bank exercised their contractual right to deduct that amount from his bank account, but the account balance had been left too low so an NSF fee was charged. Where is the unfariness or negligence in that?

Scott, the unfairness aspect of this is the amount that has been charged, NOT the fact there was a charge at all.

The UTCCR, in the UK, is a comprehensive piece of statute legislation that ensures that companies don not act in an unfair manner.

Scott, the unfairness aspect of this is the amount that has been charged, NOT the fact there was a charge at all.

I'm not so sure it is. The OP is complaining that s/he was charged and that they feel the bank "profitted" from them. Scott and I have been pointing out that it was their responsibility to ensure that there was money in the account.

Obviously, you and the OP are from different areas than Scott and I, but $40 really isn't that out-of-line here in the US.

I still can't believe that the bank never sent notification of the rate increase. Like Scott, I also receive tons of literature from my bank, credit cards, etc. all regarding APRs, fees and the like; I don't take the time to read it all but I do save it in the incident that I ever need to reference it in the future.

Scott, the unfairness aspect of this is the amount that has been charged, NOT the fact there was a charge at all.


I have to question that also. I can understand a fee that is not punitive being limited to what the process costs. But an NSF fee has a dual purpose. Besides reimbursing the bank for the cost of processing the returned/rejected payment, its also to encourage the depositor to manage their money better. This fee could have been avoided by the depositor.

I'm all for legislation to protect the consumer, but not at the expense of the service provider, they have a right to make money and try to prevent losses.

Scott and This, That IS the point here.

Under UK common law charges of this nature are unlawful if punitive in nature.
This is concerning businesses unfair bargaining powers when it comes to consumer contracts.
After all we have virtually no power when it comes to negotiating a bank contract, we cannot change any of the terms and all the power lies with the banks.

The banks can charge for their services, but this must be a reasonable amount and not excessive, as this charge clearly is.
After all it doesn't cost the bank $40 to return a payment, at most it would be around $5 as it's completely automated.

It all hinges on the Banks fiduciary duty.
Fiduciary definition | Dictionary.com (http://dictionary.reference.com/search?q=Fiduciary)

At present this whole thing is being tested in the High Court in England.
The Banls have already LOST the first stage and we are into the appeals process.

Basically they are fleecing us and are now being brought to book.

This campaign has been ongoing for the last few years and, so far, the banks have been unwilling to go to court to answer the charges presented.
They have chosen instead to simply pay out.
Now if they believed that they had a solid case this would have been stopped along time ago with the banks simply filing a complete defence.
It took the Office of Fair Trading (OFT) to drag them into court to answer the charges.

Please, have a read through my Brits link as it explains the while thing in a lot greater detail.

This really is a fascinating thread. I worked today and asked a Bankruptcy Attorney who also deals in trusts, estates, banking about setting amounts banks can charge in US and he has no idea who regulates the charges and what would be considered "reasonable."

I couldn't remember all the details here and it would make no sense for the bank to do so but he said if this is some sort of consumer debt with payments to be made directly from the account as some sort of requirement the debtor would have violated the contract and would owe the balance immediately (I'm not saying it would make sense but "he" thinks that's the situation.)

Interesting the difference between the US and other Countries and really interesting reading. I see both sides of the argument but the law appears to be on the side of the OP.

Now my question - who determines what is a reasonable fee and who determines what this bounced payment (for lack of another phrase) cost the bank in manpower - ?

Most interesting thread.

Judy, in the UK this power rests with the OFT.
Back in 2006 they judged that credit card charges where unfair at £25 on average for late payments and over limit.
This has since be reduced to £12 as the OFT said they would not investigate below this level.
Now they didn't say that £12 was fairer than £25, but in their view it was acceptable.

Back in 2006 they judged that credit card charges where unfair at £25 on average for late payments and over limit.
This has since be reduced to £12 as the OFT said they would not investigate below this level.

Back in 2006, the pound was about twice the dollar. So 25 lbs would be about $50. At the time late fees were around $29. They are now about $39.

Judy, in the UK this power rests with the OFT.
Back in 2006 they judged that credit card charges where unfair at £25 on average for late payments and over limit.
This has since be reduced to £12 as the OFT said they would not investigate below this level.
Now they didn't say that £12 was fairer than £25, but in their view it was acceptable.


All I'm sure for sure about right now is if I ever have a credit card and/or banking problem in the UK, I'm calling you. In fact, I'm putting you on speed dial right now!

Judy, Consumer Credit Law is one of my hobbies, and quite good fun it is as well.
Just be thankful your not a collection agency ;)

Judy's right; this thread is very interesting.

I'm still trying to wrap my head around all of this, as I'm not from the UK or Australia. I know that here in the US, if my customer wrote a check to my business and it bounces, I'm allowed to charge my customer a fee but there's a cap on the amount of what I can charge. I see this situation as essentially, a "bounced check" so I'm still not entirely sure how the OP can get out of paying this. I mean, they had to have been notified that this was the amount that the fee was; how can they turn around and say "I don't like that amount" and fight it? To me, that would be like calling up my credit card company and saying, "I don't like the APR that I agreed to when I signed the contract, so I'm not going to pay any interest on my card."

The point the OP is trying to make is they where aware there would be a $15 charge for this, but when they where hit with a $40 for the same thing they where, understandably, not amused.
I can completely simpathise with this.

Yes, banks are a business, but there is a limit, as you said yourself, This8384.

Currently bank charges in the UK range from £20 to £40 ($60)for similar transgressions.
These charges also can escalate rapidly and cause people extreme financial hardship, especially if the debt spiral kicks in and they end up with charges on charges on charges.
I have seen some seriously outrageous cases, where people have lost their entire monthly paycheck to charges!!

This is the whole point of the reclaim campaign, as they are blatantly profiteering from people's mistakes and mismanagement.

Agreed; $40 when you're expecting only $15 isn't pleasant. But that goes back to the whole information thing. The OP claims they were never informed of any increase; Scott and I clearly don't agree with that because we get paperwork upon paperwork which states what we're getting charged and why.

As for blatantly profiteering, I don't think that banks are really the "good" guys but it's your responsibility as an accountholder to ensure that there are adequate funds in said account. The OP already stated that they were aware that the loan payment was past-due; personally, I just don't find it to be profiteering.

This is the whole point of the reclaim campaign, as they are blatantly profiteering from people's mistakes and mismanagement.

And this sticks in my craw a bit. As a free market capitalist, I'm not much in favor of protecting people from themselves. If the charges are the result of their mistakes and mismanagement, then why not charge them for it? Maybe there needs to be more education so people do a better job of managing their money. And maybe part of these fees can go towards that.

In most jurisdictions, consumer protection laws require bankrs to give some form of advance notice before a fee can be charged. Look at your original agreement with the original bank. Most bankrs have some form of ombudsman to handle customer complaints. Why not contact that office and see what information they can provide you about the merger and the change of the fee schedule.

Suing someone for $40.00 may be viewed as frivolous by the court. Should you lose the cost consequences plus the filing fee are a lot more than $40.00. Unless you can claim some kind of damages (ie effect on credit rating, increase of fees at the bank, etc.), a fight on a matter of principle might not be worth it.

Wow - am surprised about the amont of interest in this thread.

Just to clarify, I was never disputing that I should be charged a fee - it is the law in Australia that banks can cover their costs but not profit from the fees. THis obviously isn't the same in the US. I was expecting a $15 charge not $40. I never received any fee schedules in writing after the bank merged.

I remembering hearing on the news a few months back, that the few customers who have fought the banks on this issue, have had all fees ever paid returned - therefore it definitely could be worth fighting :)

And this sticks in my craw a bit. As a free market capitalist, I'm not much in favor of protecting people from themselves. If the charges are the result of their mistakes and mismanagement, then why not charge them for it? Maybe there needs to be more education so people do a better job of managing their money. And maybe part of these fees can go towards that.

I understand where you are coming from here Scott and I'm not saying that the banks shouldn't charge a fee for these types of transgressions.

The whole point, in LAW, is that this fee must be representative of the time and losses incurred by the bank.
While a transactional system of banking would make a great deal more sense, at present we have a "free in credit" system.
Another of the major issues is the continual charges applied to accounts after the error occurred.

All charge a daily fee if your account is over your agreed over draft.
So not only is there a charge for the original error, but more charges every day until the balance is below the agreed limit.
This can soon snow ball into serious trouble.

For example, my own bank charges £20 for the original error, and then, up to 10 daily fees of £10-£20 (depending on balance over limit) until the error is rectified.

So, again for example, if I exceeded my limit by £50 for 2 weeks, I would be charged the original £20 plus 10x £20 totalling £220 for a £50 transgression, as well as 30% APR on the error.

Now is this model "fair" to the consumer?

Now that's a simple example, but if you start adding other bounced payments, then you can start to see the knock on effect, as well as continuing into following months.

The Banks are also bound by a Code of practice that is meant to go some way to protecting the consumer and being able of offer assistance to those in real financial hardship. This code is regularly ignored and breached causing even more issues.

Our Banks have stopped being the bastions of financial sense and have moved more and more into being simply "shops" for financial products.
Gone are the days of, even, passable customer service.
As ever they are increasingly driven by sales targets and goals.

What used to be a well thought of profession is now becoming somewhat of a joke.
The Bank Manager used to have the final say on ANYTHING that occurred in his branch, now they are simply "sales mangers" driving their "teams" in an attempt to squeeze as much out of the consumer as possible.

Yes, I know you're going to say change banks if you don't like it, but this is endemic across the whole banking industry and it needs a sea change of this nature to force change from the consumers.


Well I rambled a bit, but I hope it makes some sense and you can start to understand the issues in the case.

Well said Curlyben. You explained it so well! You clearly really do love this subject! :)

The whole point, in LAW, is that this fee must be representative of the time and losses incurred by the bank.

Using your own quote, Ben, I think the bank is justified. The OP had a loan payment due and the bank was authorized to take money out of his/her account to make said payment. I'm assuming the bank paid the loan anyway which led to the $40 fee; the bank was "in the red" so to speak, due to the OP not having sufficient funds. So I think the bank is entitled to charge $40.

Another thing I thought of: would you rather have to pay a $40 fee or have a late payment recorded on your credit report had the bank not taken the money out to pay the loan?

There is no dispute that the bank can indeed charge a fee for this activity, my point is that it must be representative of the banks actual losses.


Another thing I thought of: would you rather have to pay a $40 fee or have a late payment recorded on your credit report had the bank not taken the money out to pay the loan?

Just to answer this part.
Depending on the bank BOTH activities actually happen, so you are penalised twice as it where.

This8384, Just to clarify - it was a dishonour fee therefore the bank did not take the money for the loan. They charged me $40 to dishonour the loan payment :/

So the $40 was a penalty due to the loan payment being late?

Let me see if I can clarify the $40.00 fee. It goes by many different name... NSF fee, presentment fee, dishonor fee, etc. Any time a cheque or auto debit is presented electronically for payment the bank charges the $40.00 fee if the funds are not there even if it is that bank that is presenting the cheque or auto debit. When the bank went to take out the payment from whatever source and for whatever reason and the funds appeared not to be there (even if they were), the computer post the $40.00 charge. These charges are auto posted but are discretionary and can be removed by an authoriizaed bank employee (as a sign of good faith).

This is not a late payment charge on the loan. You will be hit with that also.;

Step one is to establish that the money was there and it was the bank's failure to take it rather than your failure to pay. They will probably reverse the charge.

If not, move on

This sounds very much like the campaign that is currently running in the UK with excessive bank charges.

Now it really depends on where you are located as laws vary alot between countries.

In the UK we are using the Unfair Terms in Consumer Contracts Regulations (UTCCR) as well as penalties under common law.
The bakns ARE allowed to cover their costs, but it is considered a penalty under common law for them to profit from this activity.


I don't understand why there are not more class action lawsuits against banks for unfair business practices on overdraft fees they are very excessive. If people can sue blockbuster for fees that were almost reasonable, then we should definitely be able to sue for fees that are totally unrealistic. For example, if you have an overdraft of $5 you are then charged $30-40 this is excessive how can this be allowed and why are banks immune. I can see charging interest if you are overdrafted for instance maybe 20%-30% of the overdraft amount would be and not exceeding $10-15 per overdraft. Which means if you have an overdraft of $5 then you should only be charged a fee of 10 cents. For sure people could pay this back without any problems and banks could still make money on overdrafts.

I dont understand why there are not more class action lawsuits against banks for unfair business practices on overdraft fees they are very excessive. If people can sue blockbuster for fees that were almost reasonable, then we should definitely be able to sue for fees that are totally unrealistic. For example, if you have an overdraft of $5 you are then charged $30-40 this is excessive how can this be allowed and why are banks immune. I can see charging interest if you are overdrafted for instance maybe 20%-30% of the overdraft amount would be and not exceeding $10-15 per overdraft. Which means if you have an overdraft of $5 then you should only be charged a fee of 10 cents. For sure people could pay this back without any problems and banks could still make money on overdrafts.

I don't think you realized that this thread is over 4 months old. I'm quite sure that the OP has dealt with the situaiton by now.