The Story so far ....,
Whilst working as a Wills, Trusts and Tax lawyer in Hull, East Yorkshire, in the early 1990s I became aware that a large proportion of elderly people (in particular) had old style bank accounts which had become obsolete and that, as a result, these people were only being paid a tiny fraction of the interest that they really should have been receiving. After undertaking some research on this I realised that many of the banks and building societies appeared to be deliberately cheating their customers by renaming the savings accounts that they had been offering for new customers and then slashing the interest rate paid on the accounts bearing the old name without adequately informing their customers about the change.
As I was a Parliamentary Candidate for the Liberal Democrats in the forthcoming General Election (Doncaster North constituency) I issued a Press Release to the national and local media in order to draw attention to what the banks were doing and this resulted in some excellent media coverage, including two full page articles in the Daily Mirror newspaper, and this was quickly followed by a press conference at the House of Commons (held jointly with Alex Carlyle MP - now Lord Carlyle, I believe), a couple of TV interviews and several radio interviews.
The pressure on the banks which resulted from this and similar news stories which came to light subsequently eventually resulted in a major change in the way that the banks and building societies provide information to their customers about changes to their accounts.
This therefore was the first success story and the start of my Fair Banking Campaign.
In 1994 whilst heading the Probate and Financial Services department of a firm of Solicitors in South Yorkshire, I wrote an article entitled "Getting back the Charges" which was founded upon my own personal success in reclaiming my own bank charges levied after the account went into an "unauthorised overdraft".
In this article, which can be viewed or downloaded in adobe acrobat format here: Getting back the Charges, I argued that the charges being levied throughout the banking sector were unlawful "penalty charges" and that the banks were, in law, only entitled to recover their actual loss in relation to the customer's breach of his bank's terms and conditions - if any such loss actually existed, which I argued was extremely doubtful given that most customers were already being penalised by higher interest rates and account service fees.
The article was published in the April 1994 "Financial Services" edition of a monthly legal journal, "The Legal Executive".
This therefore was the second notable success of my Fair Banking Campaign.
Some 10 years or so after my "Getting back the Charges" article was published a number of people, entirely independently and in different parts of the Country, followed my lead and successfully litigated to reclaim their own bank charges by arguing many of the points which I had made, unbeknown to them, all those years earlier (which had also by then been bolstered by the "Unfair Terms in Consumer Contracts Regulations").
Amongst these people were Bob Egerton, who went on to set up bankbuster.co.uk, and Stephen Hone, who went on to set up penaltycharges.co.uk. These people then went on to publicise their successes with great effect with the help of the internet, which had been fairly limited in it's use in 1994, and were joined in doing so by the Consumer Action Group and the media attention which followed led to a deluge of such claims being made against the banks costing them many millions of pounds in refunded charges.
In the circumstances I commend all of the people involved for the fantastic work that they have done in the same spirit as the Fair Banking Campaign which I myself started all those years ago.
Looking forward, I think that one of the main areas in which progress needs to be made with the banks is in the wording itself of the standard Direct Debit mandate that they use. Several years ago now, I realised that it is often the wording of bank mandates which lead to situations in which banks get the opportunity to apply these ridiculously high penalty charges and that, if the wording was changed to make it clear that direct debits or standing orders were only to be paid if the customer had sufficient funds in his account to do so, then there would be no opportunity for the banks to apply either "unauthorised overdraft" charges or "failed payment" charges (on the basis that not making the payment was the customer's actual instructions to the bank if the funds weren't there to do so).
Again referring to my own personal position, I wrote a letter several years ago (in the year 2000) to my bank, which I sent by registered post, to advise them that any current or future standing orders or direct debits authorised by me on my account were to be "deemed to be authorised only insofar as sufficient funds were available in the account to do so" and since then I have always amended any standing order or direct debit mandate which I have been asked to complete by adding the phrase "subject to there being sufficient funds available" immediately preceding the wording of the mandate itself.
Further, even though the bank itself has never acknowledged my letter or queried any of the amendments which I have made to the various mandates, they have also never attempted to apply any penalty charges to my account - even though, at times, I have expected them to try to do so.
Perhaps the reason for this is their reluctance to test the issue in the Courts, which I am sure they will know would be the likely outcome, for fear that any publicity would encourage others to take the steps taken by me and, potentially, open up another "can of worms" similar to the penalty charges claims for the banks to have to deal with as a result of the banks' failure to follow their customers mandates, for which they would more than likely be held liable in breach of contract. No doubt time will tell.
So if you like the idea of what I like to call "fair direct-debits" please feel free to adopt my methods and to also spread the word about this to other banking customers so that they can do likewise. In so doing, hopefully, together, we can force the banks to change the wording of the standard direct debit mandate to include this or a similar phrase and wipe out, in one instance, many of the opportunities that banks have to rip-off their customers over penalty charges.
For more information about this issue please see my Fair Direct Debits Page, from which you can download a "Fair Direct Debit" form.
Best wishes,
Steve Whiting