OFT calls time on bank charges!

The OFT are currently investigating the claim that penaltly fees charged by high street banks are actually illegal, and are looking at what actions the banks will take to rectify this.

These charges are typically incurred when agreed overdrafts are exceeded or when cheques and direct debits bounce due to insufficent cleared funds. In 2006 the top 6 high street banks netted an estimated £4.5 billion in bank charges alone.

These charges amount to anything between £19 to £39 and are only increasing the amount of people who find themselves in debt which is slowly creating a society consumed by debt.

Under the Unfair Terms in Consumer Contracts Regulations (1999) all penalty charges have to truly reflect the cost of administration, which is approximatly £2.50 - £4.50. This has now sparked the National Housing Federstion to call for the removal of excess charges for those on low income who use basic accounts.”Bank charges have a disproportionate effect on people already on low incomes,” remarked Tony Herbert of Citizens’ Advice.

The investigation has just begun and it will be interestng to see the feedback from the people who have benefitted from such changes.

Posted in: Legal

4 Responses to “OFT calls time on bank charges!”

1. roselyn joseph Says:
   June 29th, 2007 at 5:29 pm

   sir bank charges should cease i have had to pay £30 for being 84pence overdrawn and another time i was £1-29p over and still had to pay a bank charge the banks are getting away with it thats the sad part i sincerely hope something is done to abolish these charges i might add i am a pensioner and dont have overdraft facilities good luck

2. Grumbler Says:
   November 6th, 2007 at 11:28 am

   I feel that if Banks are going to be pedantic about going over drawn by pence, and if they are refusing to give an overdraft, then they should not allow more money to leave the account than there already is! There would then be no need for stupid excess charges!

3. Cupidopolis Says:
   November 6th, 2007 at 11:48 am

   The banks are out to take unfair advantage where ever they can. They already make money on our money that we bank with them. It is time we stand up to unfair extra bank charges.

4. Refund Bank Charges Says:
   April 11th, 2008 at 1:12 pm

   Lets hope the banks dont win the court case and i can actually reclaim my bank charges (something i should had done a long time ago)

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