Depositor/Dispositee. This guide is brought to you by Notary public London

Goldsmiths retained jewellery for safekeeping, Issued receipts. Sometimes receipts traded. Also lent money on strength of items deposited. A person who is making a deposit with the bank is known as a depositor. The depositor is the lender of the money which will be returned to him/her at the end of the deposit period.

The person with whom something is deposited is the Dispositee

Debtor and creditor, when depositor pays money into bank ceases to be depositor’s property becomes property of bank to do as it wishes

Under the Consumer Credit Act 1974 s75 deals with connected lender liability. The premise of this act is that breaches of a contract by sale by trade seller will have implications for the creditor in terms of the back to back consumer credit or consumer hire purchase. It directs that if a debtor

This relationship was described by Lord MacKay in Royal Bank of Scotland v Skinner case

Relationship of customer and banker is neither a relation of principal and agent nor a relation of a fiduciary nature, trust, or the like, but a simple relation – it may be one sided, or it may be two-sided – of creditor–debtor. The banker is not, in the general case, the custodian of money. When money is paid in, despite the popular belief, it is simply consumed by the banker, who gives an obligation of equivalent amount”.

That statement accurately reflects the position under English Law as decided in Foley v Hill above. Where the customer has more than one account (one in debit and one in credit) and the banker has an exercisable right of set-off between the accounts, it is the net balance (if any) which the bank is liable to repay to the customer. In the circumstances once money, whether representing the proceeds of a benefit payment or any other source, is credited to a bank account it simply becomes a debt due by the bank to the account holder and it is not necessary to identify the source of the funds credited to the account.

Office of Fair Trading v Abbey National plc

When a bank customer uses an unplanned overdraft and then makes a payment request (whether by standing order, direct debit or using an ATM or debit card), banks generally make the payment as requested, and then charge fees (which may include “paid item” charges and unauthorised overdraft fees) which accrue on a daily basis whilst the unauthorised overdraft continues. The Office of Fair Trading (‘OFT’), acting on behalf of consumers, challenged these fees under the Unfair Terms in Consumer Contracts Regulations 1999 (‘UTCCR’), which implements European Union Unfair Contract Terms Directive.

OFT claimed the sizeable fees charged were not a fair reflection of the banks’ costs but were instead a penalty upon the consumer or bank account holder, hence unlawful.

How courts dealt with fairness of terms and conditions

The issue the courts therefore had to resolve was whether unauthorised overdraft charges are a price in exchange for services.

In 2008 the High Court confirmed that the OFT had the power to assess the charges for fairness under the Regulations because they were not prices for services. Court of Appeal agreed too.

However, the Supreme Court did not agree. The Court concluded that unauthorised overdraft charges are part of the price that customers agree to pay for a whole “package” of services from their bank and the OFT cannot challenge the fairness of the Banks’ charges. Banks provide a package of services to customers, and, in return, the customers pay a package of prices: interest and charges on overdrafts, charges for specific services (eg foreign currency payments), and interest foregone on credit balances. The charges are an important part of the charging structure

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