Banks accused of scare tactics over charges

24-05-2007

Banks accused of scare tactics over charges
The UK's banks have been accused of trying to 'frighten' their customers into abandoning attempts to reclaim money they paid in unauthorised overdraft charges.

Consumer group Which? is urging people to continue reclaiming their bank charges despite a county court ruling earlier this month which rejected the attempt of a Lloyds TSB customer to recoup £2,545 he had paid the bank for exceeding his overdraft limit.

Which? insisted earlier this month that the Birmingham county court verdict had not set a precedent and that consumers should not be "scared or worried" about trying to secure such refunds from their banks.

The campaign group claims that UK banks are raking in around £4.7 billion each year from penalty fees charged to their customers who exceed their overdrafts.

But despite Which? claiming that consumers are right to continue seeking redress from their banks over the charges, the BBC News website claims it has been contacted by a number of banking customers who are trying to use the Birmingham judgement to get them to drop their claims.

"This tactic may put the fear of God into people," said Which? lawyer Ingrid Gubbay commenting on the reports.

"It is treating them unfairly, and is a very aggressive attitude," she added.

However a spokesman for Abbey, one of the banks complained about, insisted that the group had not and would not advise its customers who sought to reclaim bank charges about the significance of the Birmingham ruling.

"We leave them to draw their own conclusions," he told the BBC.

Meanwhile the ongoing legal dispute over bank charges for unauthorised borrowing rumbles on, with barrister Tom Brennan telling a London court earlier this week that "disproportionate and unfair" fees levied against him by NatWest had left him in financial dire straits.

Following a three-day hearing a judge for the City of London county court is now considering whether to allow newly qualified lawyer Mr Brennan to sue the bank over the charges.

Consumers are apparently becoming increasingly disgruntled over bank charges.

The Financial Ombudsman Service reported earlier this week that the number of banking-related disputes reported to the industry watchdog increased by almost 50 per cent in 2006.

Chief ombudsman Walter Merricks said the service had seen a "sharp increase" in complaints about bank charges in particular.

"A year ago we were receiving just ten cases a week about banking charges - by the end of March 2007 this had risen to 500 a week, and we're now handling 1,000 of these cases weekly," he revealed.



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