[mustshop75]

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 :)

[Curlyben]

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.

[mustshop75]

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

[this8384]

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?

[Curlyben]

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.

[mustshop75]

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 :/

[this8384]

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

[Iknowalotofstuff]

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

[dan423]

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.

[this8384]

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.