Bank Charges Refunded Automatically Under Tories
No Need to Claim Back Unlawful Bank Overdraft Charges
Sep 1, 2009
For a number of years, banks have been charging customers as much as £35 for exceeding their overdraft limit by as little as a penny. The cost of processing these charges is believed to be as little as £2.50. Many consumer groups have been demanding action from the current Labour administration, but no help has been forthcoming.
According to The Independent, more than a million cases have been lodged with various private companies to reclaim bank charges. There are countless companies offering to reclaim unlawful charges for 15-25% of the amount that they recover.
House of Lords Ruling
Political indecision has led to many of the poorest families in the land, the majority struggling with personal debt problems, having to pay these punitive fees. The House of Lords is currently considering whether bank charges are lawful under the Unfair Terms in Contracts regulations Act 1999. This follows decisions by both the High Court and Court of Appeal against the 'unethical' practice of charging customers for being overdrawn.
Tories Tackle Excessive Bank Account Charges
Should the House of Lords decide in favour of the consumer, the leader of the Conservative opposition said that his party would ensure that automatic compensation takes place. This would negate the need for each individual to go through the time consuming and costly process of filing a claim.
David Cameron stated on the 26 August 2009 that “Once the legal issues have been resolved I agree with you that bank customers must be compensated quickly and fairly for any unfair charges that they have had to pay. So I’ve asked my Shadow Treasury Team to look at your suggestion that banks should pay money back automatically if the courts do rule that the charges are unfair.”
Claiming Back Bank Charges
Martin Lewis, of MoneySavingExpert.com, believes that the banks would only ever return £2-3 billion if customers were forced to reclaim bank charges privately. Tens of thousands of customers would avoid taking action; others would not be aware that charges were unlawful.
Mr Cameron's plans would ensure that customers would receive the full £10 billion that they have been unlawfully charged. Martin Lewis plans to write to the Labour Party leader to ask him to support this proposition as he has yet to be forthcoming.
A Conservative victory is likely to mean that there will be no need to pay someone to reclaim bank charges. A decision is expected to be reached by the House of Lords in Autumn 2009.
Readers who found this article useful may also wish to investigate the legality of personal loans and credit cards under the Consumer Credit Act 1974.
Sources
Grice, Andrew. (26 August, 2009). "Tories look at bank charge compensation plan." The Independent.
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