Charles on… anything that comes along

I’m really encouraged by the number of people who’ve added comments, over the years, to my post on how you don’t have to pay credit card charges. (They’re illegal under English contract law, if you haven’t heard.) It seems one way in which, perhaps, I’ve helped other people - not a huge difference, but a positive one.

Last night (Tues 12th) the BBC’s Money Programme joined in, pointing out all the same things. Well, that’s good. To reiterate: the penalty charge should only be what it costs to administer the “defaulting” payment. If they’ve just sent you a form letter, then how exactly has that cost them £35? Have they somehow lost that amount on the foreign derivatives market because they were waiting for your little bit of cash to make up that £500m “put” on Chilean biscuit futures?

Sure, the outcome might be that “free” banking ends. Well, I can live with that if the charges that are imposed are transparent - that is, explained, with a breakdown of how they’ve come up with the charges. Not imposed out of the air. Then we’ll be able to choose between banks, and do it in an informed way.

It’s interesting (watching the programme) how the banks have simply underestimated peoples’ realisation that this is wrong. And it’s testament to the power of the net. The fact of this has spread via the net (initially, I’m sure, from the article in the Guardian by a solicitor pretty much thinking out loud, really, about penalty charges). You can test it. You can prove it. And now it’s getting exposure on TV.

Time to look up those old bank statements? You can get back those “penalty” charges from up to six years back. See moneysavingexpert.com or just the BBC’s page on how to reclaim your penalty charges. Enjoy.

Update: (as I watch the program, which I’d Sky+’d): the Money Programme’s “commission” (two professors and a former chief exec) reckon that the costs are - for bouncing cheques: £4.50 (”can’t you get it higher?” pleaded the interviewer, in the interests of balance); for unauthorised overdrafts/refused direct debits, about £2.50.

These posts might be related (the database thinks..):
• If your credit card imposes a penalty payment, don't pay it: it's not legally enforceable (26 September 2004; score: 117.3%)
• BT "charges" for cheques - the next "penalty charge" retreat? (13 February 2008; score: 83.38%)
• Like water on a stone, slow processes work: bank penalty charges declared illegal. Update: *maybe* illegal (24 April 2008; score: 81.58%)