From: "tim....." 
Newsgroups: uk.finance
Subject: Re: Unauthorised Overdraft Charges
Date: Tue, 17 Apr 2007 18:46:03 +0100


"Matti Lamprhey"  wrote in message 
news:58jp5tF2hn8kgU1@mid.individual.net...
> "Ronald Raygun"  wrote...
>> Peter Saxton wrote:
>>
>>> In the above cases they are charges for an agreed contract. The bank
>>> is charging a penalty for BREAKING a contract. The cost for breaking
>>> a contract should be just that - the cost, not a penalty.
>>
>> Quite.  However, the banks could argue that the "penalties" for
>> unarranged borrowing are not (excessive) compensation for *breach*
>> of contract, but are indeed charges under the contract itself,
>> especially if the bank make clear as part of their T&Cs that
>> unarranged borrowing *is* available, albeit at their discretion and
>> within reasonable limits, and what the charges for it are going to be.
>
> I've been wondering for some time why the banks haven't chosen to go
> that route.  Any ideas?

Because they suspect that they wouldn't win in court.

Calling something a charge for a service in a contract
doesn't make it so, if the reality is different.

And ISTM that the reality is different.

tim