STALKED BY MY BANK
Mum's win on harassment by letter and phone
By Richard Smith 23/05/2007
A MUM has won a settlement for harassment after being hounded by her bank for money
she did not owe.
Battling Alison Turner, 31, was reduced to a tearful wreck after being bombarded
by Halifax Bank with 33 phone calls and letters.
She brought a legal action under the Protection from Harassment Act.
The single mum-of-two is now expected to receive a cash payment after the bank agreed
to settle out of court.
Alison, from Plymouth, was pestered by staff for £775 in overdraft charges the bank
had already agreed to wipe out.
Halifax said yesterday: "We have no comment other than it's settled."
Alison's troubles began after she successfully forced the bank to wipe out £775,
made up of a string of unjustified £30 charges imposed for going overdrawn.
Amazingly, it took six weeks to clear the debt. But though Halifax had agreed not
to contact her, in that time Alison was bombarded with 33 phone calls and letters
demanding the money she no longer owed.
The persistent calls flooded in at night and weekends. Sometimes Alison's two children
answered the phone and were asked to provide security details.
As the relentless hounding continued Alison, 31, suffered anxiety, stress and emotional
problems and was frequently reduced to tears.
Eventually she brought a landmark legal action under the Protection from Harassment
Act 1997 seeking an injunction against the bank and "substantial damages".
She has now won an out-of-court settlement in a triumph for consumers against the
might of big banks.
Last night Alison said: "I've been told by my solicitors not to say anything."
But a neighbour in Devonport, Plymouth, said: "She's a lovely woman.
"She was being bullied but decided to fight back. Whatever she has won she really
Eddie Weatherall, of the Independent Banking Advisory Service, said: "This is a step
in the right direction. People still get rung late at night and repeatedly phoned
on their home number.
"But making three or four calls on the same day is harassment.
"People are now more aware that banks shouldn't be doing it and are telling them
to p**s off. If you say to a bank 'You're harassing me', they'll take it quite seriously."
Consumer group Which? added: "This is a different case than most because it's based
on a bank's behaviour. Most actions against banks are based on financial matters
rather than the way someone feels they've been treated.
"It's another example of how people can keep challenging banks. If they feel they
have a case they should seek advice. It takes time and patience - but it can be done."
When Alison was first hit by the bank charges she was so desperate she was about
to approach a loan shark. Then she spoke to lawyers.
She said earlier this year: "There was a lot on the news about banks not being allowed
to charge excessive overdraft penalties to customers. It made me think and I took
When she launched her action for harassment, she said: "I was bullied by the bank
and made to feel a failure for getting into debt.
"If customers are having problems, banks should try to get them back into the black
not make their position worse by harassing them on the phone.
"I got calls at 6.20pm on a Friday and early on Saturday morning. The constant calling
reduced me to tears."
Solicitor Neil Mercer said at the time: "She was constantly harangued for money she
no longer owed.
"It caused sleepless nights and great concern. There's no question it amounted to
The Financial Ombudsman Service said customers taking action against banks have jumped
by 50 per cent to more than 100,000.
It added: "There are now clear channels on how to go about challenging the banks.
There's very little case law history, so banks are wary of going to court.
"They don't know what will happen. Even if a bank wins, it will be portrayed as the
bad guy. So more and more are settling out of court."
Halifax Bank said: "We have no comment to make about the case other than to say it's
settled. There's no court hearing."
Banks making illegal charges will pay the price in court
Thousands of bank customers
are winning their fight for compensation, reports David Prosser
Published: 02 December
Stephen Hone, a 30-year-old law student, struck a blow for millions of bank customers
earlier this year. He may not have known it at the time, but his victory in winning
£5,000 compensation from Abbey after taking the bank to court over two £35 charges
he incurred for bounced cheques, paved the way for every other customer hit with
similar penalties to challenge their banks.
Mr Hone told a Plymouth court that the charges breached the 1999 Consumer Contracts
Regulations, because they were substantially in excess of the costs Abbey could have
incurred dealing with the problem. "The money may not seem a big deal to Abbey, but
when it charged me £70, the only earnings I had to support my children were £70 a
week from a part-time job, which was completely wiped out," he says.
Several months later, thousands more customers are now filing similar claims against
their banks. The consumer group Which? says 100,000 people have consulted its website,
which gives advice on how to challenge unfair overdraft charges, and complainants
have also won support from regulators.
In May, the Office of Fair Trading announced it had decided that credit card companies
that charged borrowers more than £12 for paying bills late or exceeding borrowing
limits were breaking the law. It also said it would investigate the same question
in the banking sector - a review now expected to conclude next year.
The issue is that under British law, lenders are not allowed to charge more than
the costs they have actually incurred when processing late payments or credit limit
breaches. They can't make a profit out of charges that are supposed to simply reflect
the cost of a customer's mistake.
Yet this is what banks have been doing for years. Which? estimates that Britain's
biggest banks earned £4.7bn from unauthorised overdraft charges last year alone.
Lloyds TSB, for example, charges £30 a day for unauthorised overdrafts, while Halifax
charges £30 every time a customer tries to process a transaction for which he does
not have sufficient funds.
"The banks have traded on their reputation for integrity to foist their penalty charges
onto an acquiescent public," says a spokesman for the Consumer Action Group, an online
campaign set up to persuade people to challenge late penalty fees. "The truth is
that these penalty charges are unlawful."
Martin Lewis, of the Moneysavingexpert.com website, which has also taken up the campaign,
says many banks still try to hide behind the fact that they set out overdraft charges
in their terms and conditions. "But if someone told you they were about to punch
you before smacking you, it wouldn't make it legal," says Lewis. "The same is true
with bank charges."
For now, at least, there is no standard procedure that enables bank customers to
win compensation. The Financial Ombudsman Service can consider certain types of complaint
but has yet to hear any cases that could pave the way for automatic refunds for all.
That means people have to take on the banks themselves. But doing so is worthwhile.
Doug Taylor, a personal finance campaigner at Which?, says most successful complainants
have won several hundred pounds, with some winning thousands.
The story below explains how to build your case for a refund, but, in practice, most
customers have found their banks have caved in well before reaching the courts. The
banks are very worried that a court ruling could set a legal precedent for compensation
payments, so for now - particularly in advance of the OFT's ruling - they are keen
to settle cases out of court.
In the few cases that have made it before a judge, consumers have won some interesting
victories. Two weeks ago, one court ruled that the cost for credit card company Egg
of processing a late payment was just £5 - less than half the limit set by the OFT.
OFT Newsroom Press releases 2006
Following success on credit card default charges
- OFT turns attention to bank current accounts
130/06 7 September 2006
In response to the OFT's statement of principles on the calculation of credit card
default charges, credit card issuers have agreed to reduce their default charges -
the majority by almost half.
In April, the OFT stated that credit card default charges had been generally set
at a significantly higher level than was considered fair and set a £12 threshold
for OFT intervention unless there were exceptional business factors. Many card issuers
have stated that they do not agree with the OFT's view of the law and that they believe
that their default charges were fair but, in view of the reduction in charges across
the market, the OFT is satisfied that no further intervention is warranted in this
area at this time and that this change has brought about substantial benefits for
The April statement also indicated that the OFT considers that the broad principles
in relation to default charges are likely to be relevant to other standard agreements
with consumers such as those for bank current accounts. The responses received from
the banking industry have generally challenged this belief but the OFT remains of
the view that the broad principles do read across to the retail banking area and
has decided to undertake further work on the application of these principles to bank
current accounts. In the course of this work the OFT will liaise closely with the
Financial Services Authority (FSA) and hold discussions with the British Bankers'
Association (BBA) to ensure that distinctive features of retail banking and the circumstances
in which default charges are applied are identified and taken into account. The OFT
has also been made aware of concerns about the personal current account market in
Northern Ireland by the General Consumer Council (GCC) and will consider its report
as part of this exercise. This fact-finding exercise is expected to take between
three to six months, at which stage the OFT will consider whether a further detailed
investigation of the fairness of individual bank default charges is needed.
Fingleton, Chief Executive of the OFT said:
'The reduction of default charges on credit
cards is great news for consumers. By taking an innovative approach to this issue,
the OFT has brought about a significant change in one area of the financial services
sector. We are now extending that work to inform ourselves about account default
charges. We welcome the willingness of organisations such as the BBA to work with
us in looking at the application of the principles we set out in the April to this
1. More information on the OFT's statement of principles in relation to credit
card default charges can be found on press release 68/06.
2. The OFT will be working closely with the FSA and the BBA during the course of
3. A fair credit card default charge should not exceed a reasonable estimate of certain
limited administrative costs which the credit card issuer reasonably expects to incur
as a result of default.
4. The OFT is not proposing that credit card default charges should be equivalent
to the threshold, and a court will certainly not consider that such a charge is fair
just because it is below the threshold. Where there are exceptional business factors,
so that the presumption that a credit card default charge over £12 is unfair is not
applicable, this does not necessarily mean that the current level of the charge is
consistent with the OFT's interpretation of the requirements of unfair contract terms
legislation. But for example, where a card issuer has a policy of requiring customers
to pay minimum monthly repayments by direct debits, such as that operated by Egg,
and offers credit cards only to customers that satisfy a relatively high scoring
requirement it may be able to set a fair default charge at a level above the threshold.
5. Whilst the principles applicable to credit card default charges are applicable
to bank account default charges, the threshold figure of £12 is not. The OFT will
not consider whether a further detailed investigation of the fairness or level of
individual bank default charges is needed, or what solution might be required, until
the end of this fact finding exercise.
6. The OFT has published a short guide for consumers and consumer advice agencies
setting out the principles on which credit card default charges should be calculated.