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| Overdraft fees
Posted: 9/26/2009 8:56:44 AM | In the wake of the credit card reform that was passed over the summer, there is a considerable push to also reform debit cards. This would primarily come in the form of banning overdraft fees. What I'm wondering is.......will there be any real opposition? If so, what can be argued in favor of overdraft fees?
For the record, I almost fully support banning overdraft fees. The one exception would be if banks want to offer the service of a 'voluntary' overdraft. Where, instead of just being denied the transaction (as it was until 10 years ago when overdraft fees were implemented), you are notified that you have insufficient funds and then given a choice of whether to complete the transaction and accept the associated fees. In essence, you would have the choice to borrow money from your bank for a fee, instead of being lent the money automatically (which is what an overdraft truly is) and being charged the fee with or without your knowledge. This would allow for 'emergency' use of a limited amount of additional funds, which the bank could choose to deny in the future anyway (for any customer that they don't feel should have access to small loans on demand).
Additionally, I'd like to preempt any 'personal responsibility' rants by saying that: YES, people should keep track of the amount of money in their account, and be aware of all scheduled deductions. However, today's overdraft fees are usurious ($40 for a $1 overdraft). They almost exclusively affect those that can least afford them (the poor). Directly deposited payments from employers etc. can be 'late', through no fault of the receiver. I see no compelling reason to charge overdraft fees without notification and subsequent authorization by the customer (aside from bilking them).
So, is there any justification for keeping the current system? | |
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| Overdraft fees
Posted: 9/26/2009 9:05:29 AM | Since stores no longer want to accept checks, the transaction via debit card should be denied. They should do away with overdraft fees.
I had a bank that was rather abusive about these fees, charging me 3 times on the same transaction ($90). I got rid of the bank and now have a savings at the credit union. The credit union will draw up certified checks for my bills, also all of my transactions are face to face. They do have checking but I no longer want that after a crooked insurance agent got a hold of my bank account #. He started drafting my account on a phony life insurance policy. I never heard of the guy or Americo, so watch out. | |
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wudger
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Joined: 12/20/2007
Msg: 3 | |
| Overdraft fees
Posted: 9/26/2009 9:07:59 AM | | right up there with the ATM usage fees. some around here run $2.50 a transaction. the cost of the transaction is in the milli-cent range, which puts profit at phenomenal rate. | |
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| Overdraft fees
Posted: 9/26/2009 9:22:57 AM | Not only are the overdraft fees up to $40, after six to seven days of it not being paid, most banks begin charging you for owing them money at a rate of $6 to $8 a day until it is paid! (I have teenagers with poor banking skills!)
It's as if the bank is saying, "Here, we are giving you money that you don't have, but we are not going to tell you you don't have it. Then we are going to charge you for giving you the money. And then we are going to charge you more money you don't have for not paying us back the money we gave you in the first place, when we knew you didn't have it"!
I'm betting that you can't find a good loan shark these days because there is more money to be made in banking! and it's legal!! | |
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| Overdraft fees
Posted: 9/26/2009 9:28:54 AM | Oh Yes, I'd like to be able to dictate to the bank exactly how I'd like overdraft fees applied to my account. Which means, none at all.
Unfortunately, banks are not there for your convenience, they are there to make a profit. They don't care about your money, unless it makes money for them.
The past couple of decades, fees and penalties have become a real money maker for banks and they play it for all it's worth.
Whatever way overdraft fees are applied, banks should be required to be fair and upfront about them. Customers should be notified very clearly exactly how fees are applied and under what circumstances. Banks shouldn't be allowed to play all their sneaky little tricks on customers to charge them overdraft fees. | |
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| Overdraft fees
Posted: 9/26/2009 9:41:36 AM | I just remembered (middle-aged brain!  ) that on the news the other night they said that some banks, Bank of America being one I remember, are changing their policies on some of these fees. Mainly, that you would have to approve them giving you money you don't have, thereby approving the fee, and that they will not assess a fee for overdrafts less than $10.
What I thought was interesting was that they took this action after a woman made a youtube video saying she was refusing to pay because she didn't think it was fair. I guess when she had a quarter of a million hits, they thought she might be on to something! Maybe there's hope yet! | |
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| Overdraft fees
Posted: 9/26/2009 9:56:52 AM | Most banks already give you a choice. When you open the account, you can tell them you don't want any overdrafts paid. After Comcast drafted my account for $35,ooo.00 and my bank actually paid it, I had the overdraft feature removed. It was the only time in my life I have ever had an overdraft.
As far as how much they charge, doesn't anyone else think the outragious fees are in place to encourage people to keep track of their money? In fact, if it happens very rarely, most banks will forgive the fees. Also, if you know you need to write an insufficient fund check, you can clear it with your bank first. | |
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| Overdraft fees
Posted: 9/26/2009 10:30:39 AM | There is currently an ongoing legal battle, in the UK Courts, to determine whether overdraft charges are unfair. The case was brought by the Office of Fair Trading against 8 major banks and their subsidiaries.
The High Court and the Court of Appeal have determined that they are unfair but the banks are appealing to the House of Lords. There stands a good chance the House of Lords will uphold the lower courts' decision.
The case is on the grounds that the ‘Unfair Terms in Consumer Contracts Regulations’ should apply to banks too. I mention this because if the case is successful, and UK banks are forced to overhaul their system of overdraft charges, I am pretty sure lawyers in the US will see it as a potential cash cow and try and bring their own case against US banks. Of course, that depends if US legislation, in this area, is similar to UK legislation(?) | |
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| Overdraft fees
Posted: 9/26/2009 10:50:53 AM | My question to everyone is this:
What is truly the difference between a check and a debit card other than the fact that one is paper the other is electronic?
In reality, there isn't one.
So you don't keep accurate records of what is available in your account? Damn, that sucks for you. It's not hard to do, really it isn't. Considering everyone here who is posting has access to the internet, and almost all banks have some form of online-banking, there is never an excuse for people on here to know exactly what is in their accounts.
Yes yes, I know, it's a "personal responsibility" argument, but god forbid what did people do before all of these electronic means? They figured out how to balance a check book and figured out how to ensure that they didn't overdraft their accounts. And those who did overdraft their accounts paid the price. And those who habitually did it were thrown in jail, basically for writing worthless checks. But somehow computers and electronic devices gives us an excuse to no longer have to accept responsibility for ourselves.
This entire thing to me is nothing more than a psychological device of projecting in the form of a self-defense mechanism. Oh, it's not my fault that the card wasn't accepted. it's my banks/employers/crediters/spouses/child/anyone else except for me fault.
As the old saying goes, it's time to cowboy/girl up andtake responsibility for your own actions, and if you do bounce a check/debit card, then accept the consequences for you screwing up. | |
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wudger
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Joined: 12/20/2007
Msg: 10 | |
| Overdraft fees
Posted: 9/26/2009 11:12:01 AM | fabulous. how about then when the bank screws up, I just decide how much I'll charge them for it? try that sometime.
and hell, I back up my primary checking account against a savings account at the same bank. they electronically move my money from savings to checking to cover an overdraft, which costs them a few tenths of a penny. they charge me $15 for it even though its obvious that they have the money to cover the overdraft at their immediate fingertips.
great work if you can get it. | |
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| Overdraft fees
Posted: 9/26/2009 11:22:35 AM | There is at least one major difference between debit cards and checks. Debit cards deduct the amount immediately, checks do not post until AT LEAST the next day and often more than one day later. This means that with debit cards, you have no opportunity to recognize that you made a mistake. With a check, should you find that you do not have enough money in your account, you can go to your bank and deposit money to cover the amount of the check BEFORE you are charged a fee. With debit cards, the usurious fee is applied automatically. (whether people deliberately write bad checks is not the issue)
Also, there is something to be said for competition. Banks do offer different services. However, many banks are not available to those with low-income, and therefore the availability of services is often limited. To mandate that all banks at least allow the option to turn off overdrafts (not the fees, but the actual ability to overdraft your account), is not an unreasonable request in my opinion. Until 10 years ago, the transaction was simply denied.......now many banks don't even offer the that as a choice.
PS: LOL at the 'Troll post - pity'........I have never had an overdraft, so how can I be looking for pity  . | |
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| Overdraft fees
Posted: 9/26/2009 11:36:52 AM |
Considering everyone here who is posting has access to the internet, and almost all banks have some form of online-banking, there is never an excuse for people on here to know exactly what is in their accounts.
Interesting. I deduce, from this statement, that you assume everyone who is an opponent of unfair charges (evidenced by their contribution to this thread) has, at some point, been charged. I, in fact, have never paid a single bank charge - I do keep a check on all my finances and know exactly what is being paid to whom and when.
But, just because, I am not a victim doesn't mean I can't see how something is unfair. If someone goes into the red then they should be charged the cost the bank incurs for the unauthorised overdraft. That is fair, but that is not what banks do. They levy a hefty penalty. The question here is, does such an action (having an unauthorised overdraft) warrant such a hefty penalty? No, it doesn't. It is a way for banks to make money. If it wasn't there would be absolutely no need for penalty charges as every single bank has it within their power to refuse payment if you do not have sufficient funds - as with a credit card, your debit card would be declined.
Just because you can feasibly avoid a trap doesn't mean that trap should be allowed to exist. Fortunately, the UK courts have recognised this and a ruling is expected any day now. | |
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| Overdraft fees
Posted: 9/26/2009 12:49:19 PM | The bank I use has no overdraft fees.
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| Overdraft fees
Posted: 9/26/2009 1:57:05 PM | My bank charges $37.50 per overdraft and then an additional $7.50 per day per overdraft after the first day. Needless to say, I keep close track of my funds.
Many, if not most, banks have changed how they apply your incoming checks/debits/charges.
Used to be, if you had multiple items come in the same day and not enough funds in your account, the bank would start with the smallest amounts first, so that you had to pay overdrafts on the smallest number of transactions. For example, you have $100 in your account and checks for $10, $15, $20, $25, $30, and $70, totalling $170, all came in the same day. The bank would enter the 5 smaller amounts first, taking up your $100 balance and then charge you one overdraft fee, for the $70 check, if they honored it.
Also, many banks would give you a courtesy call, and if you had the funds in by "close of business day" which was usually 3PM regardless of how late they stayed open, then they wouldn't assess any fees. Those days are long gone.
Then, when electronic banking became the usual, money coming out of your account would be deducted in the order the transactions came into the bank,the instant they hit. In the above scenario, that would mean that you could have anywhere from 1, like above, to 4 overdraft fees--if the $70 and $30 (or $ 25 ) items hit first.
Now a lot of banks are once again prioritizing the order they register amounts, only now they are purposely taking biggest amounts first so as to maximize the amount they can charge you--4 charges in this case.
Settleforthis, msg.12
....checks do not post until AT LEAST the next day and often more than one day later.
Be aware that most checks these days are also electronically submitted, unless you are writing them to a very small business, such as mine, or an individual. Almost all larger retailers/companies now use electronic submission for checks. No more day or two "breathing zone" to be able to get money into the account if you discover that you have insufficient funds. Especially if your check is put through an electronic register, they are deducted almost as fast as debits and charges are, which is virtually instantaneously. I know this because I once bought something at Office Max, then stopped at my bank three blocks away and made a deposit on the way into my shop, only to find that I was already overdrawn. In my case, I spoke to the manager and got the fee reversed because of my excellent record with the bank, but now I make sure that I don't use my card or my checks unless I already have the funds in my account.
Yet if I have to get a refund and have used my card as as charge instead of debit (which I do whenever possible because instead of costing me $.25 per transaction, I get "Visa check card rewards"--free money--that way) or a check, I have to wait seven to ten business days for the refund amount to appear back into my account. In other words, the merchant and/or bank get free use of my (and everyone else's in the same situation) moneys for up to two full weeks.
 Imagine how much interest accrues for the merchant/bank when you consider the vast number of refunds that are handled this way. Wally World alone must make untold thousands (millions?) of dollars a day in interest from this practice!!!
If my purchase using my card is deducted immediately, why isn't my refund credited to my account immediately? THAT's the banking biggie I would like to see changed.
The next thing I would like to see changed would be ATM fees. If I go out of my system, not only does that cost me money at the ATM I use, my bank also charges me $2. I have seen ATM charges ranging from $1 (which I don't mind) up to $15 per use. Usually the only time I use my card as a debit is if I'm somewhere without a branch of my bank nearby. Then I gladly pay the quarter fee for the debit, and get cash back with my purchase, bypassing the ATM fees. | |
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| Overdraft fees
Posted: 9/26/2009 2:13:15 PM | There is a whole panoply of sneaky little tricks banks play on people to charge them for one thing or another.
Let's say you have $100 in your checking account and you have 3 outstanding checks which come in on the same day. One for $25, one for $50 and another for $120.
Do you think the bank will process the 2 smaller checks first then charge an overdraft on the larger third ?
NO !
The banks computers are programed to process the larger check first, then charge you an overdraft 3 times !
Checks are processed before deposits !
Even if you put in a deposit to cover the 3 checks you have coming in, most likely unless your deposit is in cash and you get it in in time, the bank will hold the deposit until the next business day ( sometimes even with direct deposit from your employer ) and process the checks which result in you being over drafted. If you deposited your paycheck on the same day your outstanding checks came in, you are out of hope.
YOU MUST REMEMBER THIS.
Your bank card is NOT a credit card ! You DO NOT have a credit line, like a credit card.
You have only the money in your checking account to cover what ever you buy on your bank card.
Once the retailer puts in your bank card for a purchase, you must have enough in your checking account to cover the price. The bank will put a hold on that amount until the charge comes through. It's just like you withdrew money from your account. That money doesn't exist for you anymore, until the charge goes through.
If you go to a hotel and put up your bank card for payment the hotel will get an approval for the amount of the room. THAT AMOUNT WILL DISSAPEAR FROM YOUR ACCOUNT and you WILL NOT have access to it until the hotel puts the charge through. Even if you change your mind and put the charge on a regular credit card, that hold is still on your bank card and you wont have access to that money until the it clears. That could take several days !
Even if you call the bank personally and have them take off the hold, it could still take 24-48 hours. Even longer, if it's over a weekend and after the bank closes on Friday.
Naturally, any checks which come in over that time period might result in you being overdrawn.
You've had your warning !
Do you like electronic banking ?
Do you like transferring funds from your savings to your checking account, especially to cover checks you know are coming in ?
There's a little thing called " excess transfer fees " which banks don't jump up and tell everyone about.
A lot of banks today will charge a fee every time you transfer money using the computer, from your savings to your checking account more than 5 or 6 times a month. Or if you pay bills from your savings account. Usually it's in the range of about $35 each time. It usually doesn't apply when you do it at the ATM but only when you bank on line. | |
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| Overdraft fees
Posted: 9/26/2009 3:13:15 PM | Hmm...interesting thread, OP. (And yeah, my first instinct was that I *was* going to add, that of course it is up to each individual to monitor their own bank balance and not, in essence, write cheques they can't cash so to speak, lol).
I have primarily banked in Canada though, for 30 years now, and only for the last few in the US. And WOW, what a world of difference south of the border!! Keep in mind, though, in Canada I never added "overdraft protection" to any of my accounts, simply because I knew I'd never use it, so I'm not 100% an expert on how that might have worked had I actually needed it. My bank offered me unlimited overdraft protection, though, for X-amount per year, had I chosen to add that to my yearly banking fees. I think it was $35.00 they were charging for that feature, but since I turned it down, I'm not sure if that might have included only X-amount of overdrafts per month or period. I don't recall being offered it when I opened my US account though, although it might have been in the fine print that I neglected to read, lol.
Up north, at least with my bank, yep, a customer would get the "insufficient funds" message immediately in a store while attempting to make a purchase that they didn't have enough funds in their bank account to cover. I'll agree with you, that I think that would be an excellent change to make in the US banking system, to help keep people on track. (Again, remember, I am biting my tongue, and going along with the spirit of the thread, lol). I also think that, some sort of "would you like to engage overdraft protection to cover this purchase?" message might also be a good idea, and it should also clearly state "You will be charged X-amount of dollars for agreeing to this".
Just to play devil's advocate, in a way, though. Okay, so suppose someone has $273.84 in their bank account. The new system goes into effect, they try using their debit card for a purchase of $310.68, and are notified of insufficient funds and they DON'T want to agree to an overdraft charge. What would ensue? They start asking the checker to remove 3 items from their cart, and try again, to see if their available funds are sufficient? Okay that didn't work...take off two more and try again? Can you see what I'm getting at?
Overdraft protection in Canada obviously works on a very different system than in the US, and, correct me if I'm wrong but, it strikes me more as, in the US, customers are almost in effect using a debit card as a pseudo-credit card if they don't have enough money in their account to cover their purchases? By that I mean, it's still drawing on funds that one doesn't currently have, which, as with any credit card, would result in an interest charge or, in this case, a "user-fee" of some sort.
The only thing I think possibly should be changed, would be giving the purchaser a notice that they had insufficient funds, please try again.
Just don't hold up the rest of the line while doing so.
Editted to add: Perhaps I'm being stupid here but....my US bank card, offers me a choice upon each purchase, of "debit" or "credit"....I have always clicked "debit". Would choosing the "credit" feature mean, I would be automatically engaging an overdraft protection or fee? If so...wouldn't that be another warning sign that one might be drawing upon funds not currently in their account? Otherwise (again, sorry if this is a silly question) but, why wouldn't everyone just choose "debit"??? (In Canada, credit cards are completely separate cards from debit cards). | |
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| Overdraft fees
Posted: 9/26/2009 4:26:21 PM |
There is at least one major difference between debit cards and checks. Debit cards deduct the amount immediately, checks do not post until AT LEAST the next day and often more than one day later.
That isn't completely accurate. Most people can use their debit card as a credit card and if you do so the charge will only appear when the retailer processes the charge. Many smaller retailers only process charges once a week.
(whether people deliberately write bad checks is not the issue)
Why not? No one is screaming for banks to eliminate overdraft fees for paper checks yet we all know that people float bad checks all the time. People can and do abuse debit cards in the same way. | |
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| Overdraft fees
Posted: 9/26/2009 6:19:30 PM | Justification? What, are you kidding?
License to steal is the better way to describe it.
Their fees are insane...overdraft fees, overlimit fees, insurance that you never asked for...you have to be a genius to figure out all of the ways they steal your money.
I hope that Elizabeth Warren can do something about the **stards, but I'm not holding my breath. | |
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| Overdraft fees
Posted: 9/26/2009 6:43:42 PM |
fabulous. how about then when the bank screws up, I just decide how much I'll charge them for it? try that sometime.
and hell, I back up my primary checking account against a savings account at the same bank. they electronically move my money from savings to checking to cover an overdraft, which costs them a few tenths of a penny. they charge me $15 for it even though its obvious that they have the money to cover the overdraft at their immediate fingertips.
The overdraft fees are part of the contract you sign when you open an account with them, as well as any other applicable fees. If you can get a bank to agree to what you are asking, then more power to you, but at the end of the day, the contract is what the contract is, and you didn’t have to sign it.
There is at least one major difference between debit cards and checks. Debit cards deduct the amount immediately, checks do not post until AT LEAST the next day and often more than one day later. This means that with debit cards, you have no opportunity to recognize that you made a mistake.
So you are basically saying that you are randomly going around and using your debit card without knowing how much is in your account?
First, there is this great thing called a ledger that you can use to keep track of the monies going in and the monies going out. They are fairly inexpensive. Furthermore, you don’t have to know the exact amount either. When I go out, I know how much is in my account, and I can figure out how much I can spend. I know it’s a lost art, but it isn’t rocket science either.
With a check, should you find that you do not have enough money in your account, you can go to your bank and deposit money to cover the amount of the check BEFORE you are charged a fee. With debit cards, the usurious fee is applied automatically. (whether people deliberately write bad checks is not the issue)
Sure, but with a debit card, again, you don’t know how much is in your account when you are using it? You can easily make your own paper trail as I mentioned using a ledger and receipts, as well as internet banking and several other means of figuring out your account before you swipe your card through some machine.
Also, there is something to be said for competition. Banks do offer different services. However, many banks are not available to those with low-income, and therefore the availability of services is often limited. To mandate that all banks at least allow the option to turn off overdrafts (not the fees, but the actual ability to overdraft your account), is not an unreasonable request in my opinion. Until 10 years ago, the transaction was simply denied.......now many banks don't even offer the that as a choice.
Well, then more people should shop around and find the institute that fits their options. It is another lost art, I know, but sometimes competitive shopping and negotiations. Your right, banks have dropped different options and dropped different services for whatever reason, which is absolutely their prerogative, just as it is people’s prerogative to not keep track of the balance of their accounts. But in the end, who has the ultimate responsibility to keep track of what is in your account? Just like everything else you deal with, it is ultimately your responsibility.
Interesting. I deduce, from this statement, that you assume everyone who is an opponent of unfair charges (evidenced by their contribution to this thread) has, at some point, been charged. I, in fact, have never paid a single bank charge - I do keep a check on all my finances and know exactly what is being paid to whom and when.
No, the only thing that should be deduced from that statement is that I believe people have the means and the accessibility who is posting on these forums can take personal responsibility into their accounts and should know how much is in their accounts. I never said anything about everyone here being charged over draft fees.
But, just because, I am not a victim doesn't mean I can't see how something is unfair. If someone goes into the red then they should be charged the cost the bank incurs for the unauthorised overdraft. That is fair, but that is not what banks do. They levy a hefty penalty. The question here is, does such an action (having an unauthorised overdraft) warrant such a hefty penalty? No, it doesn't. It is a way for banks to make money. If it wasn't there would be absolutely no need for penalty charges as every single bank has it within their power to refuse payment if you do not have sufficient funds - as with a credit card, your debit card would be declined.
And again, if a consumer wanted those terms, then they would’ve needed to negotiate those terms. But if you sign a contract, as in the case of when you sign up for a bank account, then you know what you are signing up for. It isn’t the banks fault that you didn’t read the contract before you signed it, and you have every right to close your accounts, but while you are under the agreement in regards to an account, then you have greed to abide by those terms. Sorry, SOL. Contract wins.
ust because you can feasibly avoid a trap doesn't mean that trap should be allowed to exist. Fortunately, the UK courts have recognised this and a ruling is expected any day now.
So the UK courts are going to just make a lot of contracts null and void because someone forgot how to read? Maybe it’s time for the UK to invest in Hooked on Phonics. | |
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| Overdraft fees
Posted: 9/26/2009 6:55:46 PM |
Editted to add: Perhaps I'm being stupid here but....my US bank card, offers me a choice upon each purchase, of "debit" or "credit"....I have always clicked "debit". Would choosing the "credit" feature mean, I would be automatically engaging an overdraft protection or fee? If so...wouldn't that be another warning sign that one might be drawing upon funds not currently in their account? Otherwise (again, sorry if this is a silly question) but, why wouldn't everyone just choose "debit"??? (In Canada, credit cards are completely separate cards from debit cards).
Choosing debit checks the balance and deducts the amount from your checking account - in effect, it's an electronic bank draft that takes place instantaneously. It's processed over a different clearing system. Choosing "credit" causes the authorization to go over the credit card clearinghouse system. It still checks your balance for any blocks by your bank, but it's processed and isn't deducted until the merchant batch processes the charges for the day. Then it goes through the longer ACH processing system until presented to your bank a day or three later before it's deducted from your checking balance. Both are processed over different systems. The merchant ends up paying for processing both types, which is of course passed on in the way of higher prices.
In reality, it lets you "float" the amount for a day or so, but if doing so shows that your checking balance would have gone below positive, don't be surprised if the bank doesn't tack on an overdraft charge.
True overdraft protection involves either a line of pre-arranged credit, or an automatic transfer from another account to cover the amount so the account in question is never technically "overdrawn". Fake overdraft protection involves the bank paying the charge for you, then charging you a whopping fee for doing so on that and all subsequent drafts until the balance is brought back to positive.
Re: Credit card reform, I don't think debit cards should be included in ANY "credit card" legislation. They are draft instruments for checking accounts, and NOT credit cards. They should have their own legislation and rules. | |
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| Overdraft fees
Posted: 9/27/2009 3:07:45 AM |
No, the only thing that should be deduced from that statement is that I believe people have the means and the accessibility who is posting on these forums can take personal responsibility into their accounts and should know how much is in their accounts. I never said anything about everyone here being charged over draft fees.
The people posting on these forums have the means and accessibility but, you cannot just assume the people who live from paycheck to paycheck have the means, and it is these sorts of people who are most stung by unfair charges.
And again, if a consumer wanted those terms, then they would’ve needed to negotiate those terms. But if you sign a contract, as in the case of when you sign up for a bank account, then you know what you are signing up for.
These contracts are standard, you have no choice but to accept them when you take out the account. Nobody can renegotiate a bank's contract unless they are billionaires opening business accounts and if they were billionaires I very much doubt they would have to worry about overdrafts.
It isn’t the banks fault that you didn’t read the contract before you signed it, and you have every right to close your accounts, but while you are under the agreement in regards to an account, then you have greed to abide by those terms. Sorry, SOL. Contract wins.
Errrrr, no!! In actual fact it doesn't. Not every contract is legal and binding. There are a vast number of principles that can render a contract void. One of which is the basic principle that terms and conditions must be fair. The courts have the power to set aside a contract that they deem has taken unfair advantage of someone's situation.
Case in point, loans with exorbitant interest rates. Now, whilst I wholeheartedly agree, nobody has to enter into a contract, they choose to do so but if the terms of that contract amount to extortion then it has unfair conditions. The UK courts have vitiated loan contracts where an individual ends up paying back, over time, £50,000 on a £5,000 loan and rightly so. Such a contract amounts to extortion.
So the UK courts are going to just make a lot of contracts null and void because someone forgot how to read?
It's not that someone forgot to read!!!!!!!!! Dear God!! It is a very simple principle that a contract must be fair and there must be equal consideration. Without equal consideration a contract would amount to extortion and extortion is illegal in most Judicial systems.
Simply put, if I knew you were having financial difficulty and offered you the sum of £500 for your £500,000 house. Your situation was such that you were desperate for cash, any amount of cash, and I was the only person who could give you the money so you agreed to that contract. The terms of said contract would be suspect because one could argue that I had taken advantage of a position of power to the point of extortion.
NB: I don't want to get into a debate about the improbability of such a situation arising or the alternatives to entering into such a contract. It was an extremely simple example to illustrate a point. In reality, contracts that are vitiated under duress/undue influence/incapacity are extremely complex.
What makes a society civilised is a system where the strong protect the weak. If people were allowed to abuse their position of power it would be nothing more than survival of the fittest.
Maybe it’s time for the UK to invest in Hooked on Phonics.
It may interest you to know US contract law mirrors UK Law, as does any country where the British Empire once held sway. | |
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| Overdraft fees
Posted: 9/27/2009 3:10:10 AM | | Double post - sorry, my browser froze. | |
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| Overdraft fees
Posted: 9/27/2009 6:27:52 AM |
So you are basically saying that you are randomly going around and using your debit card without knowing how much is in your account?
No, I am not 'basically saying' anything of the sort. In addition, this discussion is not about me, and what 'I' personally do is irrelevant.
You said that there was no difference, so I explained one difference.
Well, then more people should shop around and find the institute that fits their options.
I already said that many banks and bank options are NOT AVAILABLE to certain people, and usually these certain people are the poor. The reasons that people cannot shop around are many, but here are a few:
1) Location. From personal experience, I had to find a new bank when I went away for college because the one that I had used since I was 5 did not have a branch within 40 miles. This is, again, especially true of the poor because they are less mobile (cost of driving and/or lacking personal transportation altogether).
2) Institutional restrictions. Many banks require that you have a certain amount of money in your account, thereby making these types of accounts unavailable to those that are living paycheck to paycheck. Also, many credit unions (although most are becoming more 'open') have restrictions on who can become a member based on employment or other affiliation.
3) Lack of education. Not just in terms of finance, but simply in terms of being able to read or understand the contract.
If we, as a people, have decided that using electronic payment methods is beneficial to our economic system (which we have), and we have many policies to encourage this practice (which we do), and we want the poor to take part in this system (which we do).....then we need to attempt to lessen the effect of these types of barriers. Also, of course it is their responsibility to keep track of what is in their account (I have only stated this three times now), but along with being poor often comes being uneducated. That we have started to include personal finance classes in our public education system is a start, but we need to make reasonable accommodation for those who have not had access to them.
PS: I guess we can debate the economic advantages of using electronic payment methods, or of helping the poor spend their money on food/shelter/other necessities, instead of fees..........but those topics should probably have their own thread. | |
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| Overdraft fees
Posted: 9/27/2009 7:42:39 AM |
I already said that many banks and bank options are NOT AVAILABLE to certain people, and usually these certain people are the poor.
I'm poor, yet I have a debit card. I've never had an overdraft. When I'm running low on money, I stop using my debit card until I've refilled my account with some cash. I do agree bank fees are outrageous, but a debit card is not something a person needs in order to stay alive. Nobody, not the poor, nor anyone else, needs government protection from the bank's overdraft fee. They can, and should, be protecting themselves from those fees by not spending more money than they have. An overdraft fee is an easy penalty to avoid. | |
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| Overdraft fees
Posted: 9/27/2009 10:13:17 AM | Not so.
My foreign lady friend got one of those cards where you put up money for the card, so the card is guaranteed. It was $500. Just to establish credit.
She used the card one time for $20.
Over the course of five months or so, the bank took ALL of her money.
I counted seven different charges to her account; there were overlimit fees, late fees, two kinds of insurance, and some stuff I can't recall. It was INSANE.
And the $35 "overlimit" fees were the trickiest of all. It worked like this....the statement has a dollar amount at the top, the minimum that you need to pay(supposedly) so that's what my foreign friend paid. Mind you, she'd only spent 20 bucks out of 500 OF HER OWN MONEY. Okay....if you pay that minimum amount, that apparently wasn't enough to counteract the overlimit fee. It was simply CRAZY. It's been a few years so forgive me if I'm not explaining it that well. The bottom line is that it was sheer thievery.
So....I filed a small claim for the amount. My lady friend did not have a good command of the language at the time, so I knew that I had a good case.
Sure enough, the high powered attorney settled with me in the hallway that day, because she didn't want the story aired in the courtroom.
This was one of the major banks. Crooks.
The **stards had been calling my friend all the time, asking if she wanted the stupid "insurance" and she always declined it, and yet there were two kinds of crazy insurance charges on the card that helped to wipe out her startup money.
Yeah, seven different crazy charges. I remember that clearly. And it was her own money for the damn card!
I think that if most of the bankers wind up in bottom of the river, they won't be missed. | |
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