Wed 25th Apr, 2007
Unfair bank charge refunds going ahead
At last banks and building societies are being forced to admit that their charges are unfair.
For a while now headlines have been full of stories of people fleeced by their banks for going overdrawn by tiny amounts. Banks have made a killing in recent years by charging what they now agree to be excessive amounts for overdraft breaches. Many customers have found charge after charge piled onto their accounts before they even realised leaving them unable to clear the vast sums accruing.
The Alliance & Leicester are one building society who have now agreed to fix a reasonable charge for bouncing cheques. Following a recent BBC report claiming that charges should amount to no more than £4.50, the building society has agreed to refund the difference to their customers between their old rate of £25 per bounced cheque and the new sum.
But whilst some of the poorest and financially careless customers may be cheering that their charges will be refunded, experts are expecting a new wave of charges to take place of the old ones.
“People may be seeing a return of their charges for unauthorised overdrafts or bounced cheques, but this is not the end of the matter,” says Abbi Rouse of loan brokers, Interfinancial Limited.
“Banks have been used to gaining revenue from those customers unfortunate to go overdrawn or careless with their finances. Now all customers will be seeing extra charges on their accounts as banks try to claw back profits.”
Customers across the board can now expect to see higher charges for personal loans, insurance, banking and other financial services warns Rouse.
At the end of the day, the customer may be right, but the banks will always win.