NationStates Jolt Archive

http://news.bbc.co.uk/1/hi/business/6559673.stm

A businessman from Norfolk has recovered a record £35,987.94 from NatWest after accusing it of charging him unlawful overdraft fees.

The man, who wishes to remain anonymous, had challenged the fees that the bank had levied for bouncing cheques from his company.

NatWest said it was settling the case only because its legal costs were becoming too high.

It is just the latest example of a bank repaying such penalty charges.

[...]

"Our client considers that your challenge to its charges would fail in court," said the letter from NatWest solicitors, Cobbett's of Manchester.

But after saying that the charges were fair, reasonable, transparent and levied in accordance with its agreement with Bob, the bank's solicitors threw in the towel.

"Our client does not believe that your claim has any prospect of succeeding," it said.

"Although our client is confident that it will be successful at a final hearing, its legal fees will almost certainly outweigh the value of the claim.

"As such our client must take a commercial approach to such claims," it went on.

"Without admission of liability our client is prepared to settle this matter in full to prevent incurring any further legal fees."

British banks have been doing a lot of this sort of thing recently, though not on this scale, apparently to avoid being forced by the courts to reveal precisely how much it actually costs for them to bounce cheques - which is probably in the region of £2 rather than the £30 they charge their valued customers.

I think the last line is telling - does the bank really believe it would cost them £36000 in legal fees to defend this case? Bollocks does it. Just another example of big business ripping of the consumer. After all, the Royal Bank of Scotland (which owns Natwest) made £9.2 billion profit in 2006 (http://news.bbc.co.uk/1/hi/business/6406879.stm).

i hope TSB can't afford the legal fees for my claim, hopefully i can get about £200 out of them otherwise. i find it very strange that they can get away with these charges so often. i mean government legislation says they're illegal and yet the only way to get the money back is to challenge them through the courts. how is it possible that banks can do this so openly and not suffer?

i hope TSB can't afford the legal fees for my claim, hopefully i can get about £200 out of them otherwise. i find it very strange that they can get away with these charges so often. i mean government legislation says they're illegal and yet the only way to get the money back is to challenge them through the courts. how is it possible that banks can do this so openly and not suffer?
They'll more than likely pay up. I seem to recall reading that the Consumer Action Group hasn't found a single case where the banks went to court.

What the banks are doing is illegal, and they know it. They're only allowed by law to claim back their genuine administrative costs; I seem to remember an article that said this amounted to a maximum of about £4 for going overdrawn; certainly nowhere near the £30 or so they charge now.

All they're doing by settling is trying to keep it out of court, so that they can continue to rip people off for as long as possible. They're making an absolute killing out of these charges.