You can’t keep a “good” bank down….

I’m always amazed by the ingenuity of criminals to find ways to scam money. I’m even more amazed that possibly the biggest criminals of all are generally not regarded as such. I refer here to the BANKS .. but you’ll probably have twigged that already! Bankers, politicians and estate agents – true gangsters with “professional” titles!

banks2.jpgIn April 2006 the Office of Fair Trading (OFT) ruled that the banking practice of imposing a penalty on customers who failed to make a minimum payment was unreasonable. The OFT restricted the default charges to £12. “Yipeeeeee!” I hear you say.

But hold…… bankers are a wily bunch of coyotes. The September issue of WHICH? Money has found that the banks have found some interesting other ways to supplement their charges. Among these are:-

  • annual fees;
  • charging low usage fees;
  • hiking balance transfer costs.

According to this research, detailed in this Reuters report – “Credit cards charging “ingenious” new fees”, most of the major banks and building societies have been scrambling around being “ingenious”:

“Northern Rock was one of the first firms to introduce an annual fee. It now charges 2 pounds per month for its base rate tracker credit card. The Co-op Bank also charges 2 pounds per month for its Platinum Visa credit card.

Lloyds TSB and MBNA have introduced penalty fees for “inactive” customers.

Lloyds imposed a 35 pound penalty on a number of its customers who had not used their card for some time, while MBNA has contacted customers with a credit balance who have not used their card for more than a year to warn them of a 10 pound penalty.

Barclaycard — the most popular card — is the latest to threaten fees. It is expected to hit its 1 million inactive customers with fees of 10 to 20 pounds.

At the same time, the cost of switching a balance from one card to another is rising — from a typical 2 percent to 2.5 or 3 percent.”

So basically all the big guys have decided to replace one outlawed fee with a basically dodgy deal – one that very few people would accept if they were signing on as a new customer but which will be imposed on existing customers. And the vast majority of people will probably just grin and bear it which is what the banks are counting on. Well…. the banks attitudes are more likely to be that customers can either like it or lump it.

So… here’s a call I’d like you to support. I’m calling on the Office of Fair Trading (OFT) to examine these bank practices and see if they can convince the bankers to be reasonable. And when the banks refuse then the OFT could just use the powers we’ve given it to force them to be reasonable.

Anybody with me here?

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3 Responses to You can’t keep a “good” bank down….

  1. June

    For the most part I agree with you and enjoy reading your posts.

  2. talkni says:

    Why… Thank you June… tell me is your experience of banks very much like mine? Do you happen to regard them as money grabbing, cheating, for the most part sleazy institutions operating without any real concern for society or ordinary people in general….. or would you be easier on them!? 🙂

  3. talkni says:

    So.. being me.. I decided to contact some bankers and ask for a response to this article. That was on the 30.8.07 and I got my first response yesterday – 28.11.07. Now… I think they take charges out of my account faster but…….. want to hear what they say? “Good for a laugh anyway!”says you.

    Well wait…. I’m stringing you along here. They didn’t reply but the OFT (Office of Fair Trading did!

    So here’s what they say:-

    Unfair Terms in Consumer Contracts Regulations 1999(‘the Regulations’)
    with regard to Bank Charges:

    Dear Mr *******,

    Please accept our apologises for the delay in responding to your email.

    Background to the OFT’s work on personal current accounts
    There has been widespread concern as to whether or not the personal current account market in the UK is competitive. There have also been specific concerns about the legality of charges relating to unauthorised overdrafts and returned item fees.
    Following an initial fact finding investigation, the OFT launched, in April, a market study into the personal current account market. This is designed to provide the OFT with an understanding of how well the market as a whole works for consumers. The OFT’s view is that active informed consumers are the best drivers of efficient competitive markets so the study is focused particularly on transparency of costs to consumers, ease of switching and fairness of the pricing structure. The study is due to report in December.

    In parallel with the market study, the OFT is examining the fairness of the level of personal current account unauthorised overdraft charges and returned item fees under the Unfair Terms in Consumer Contracts Regulations (UTCCRs). The market study will help us to fully understand what impact any enforcement action taken by the OFT may have on the personal current account market.

    One aspect of our investigation is considering whether the unfairness test contained in the UTCCRs applies to unauthorised overdraft charges and returned item fees. The OFT considers that the test applies, but the banks disagree. We believe that an early ruling on this point of principle will assist in securing a clear and orderly resolution of the fairness of these charges. We have therefore agreed with the Banks to take a test case and we commenced proceedings in the High Court on 27 July. A hearing has been set for early 2008. We believe that the test case will lead to a resolution of the legal issues necessary to achieve the fair and consistent handling of consumer complaints and are committed to ensuring this process is resolved in as efficient and expeditious a manner as possible.

    for more information please click on this link http://www.oft.gov.uk/advice_and_resources/resource_base/market-studies/personal2

    Consultation with the public/ consumer groups

    We have consulted with consumer representative bodies, like Which?, the NCC and the CAB, in connection with our investigation. And we met with Which? and other consumer bodies just prior to announcing the test case, to inform them about it. When we announced the market study in April, we confirmed that we would be consulting with industry, industry representatives and consumer advice bodies, as well as the Financial Services Authority (“FSA”), Financial Ombudsman Service (“FOS”) and Government. We also welcomed relevant submissions from potentially interested parties.
    Due process of law
    Prior to our test case, the scale of consumer litigation was resulting in conflicting outcomes and significant costs to individual consumers. By bringing this action on behalf of consumers we will gain the legal clarity necessary to achieve the fair and consistent handling of consumer complaints.

    Suspension of consumer claims
    We have been working closely with the FSA and FOS, who hold complaint handling responsibilities for the banking industry, to make sure that the test case process is as well coordinated as possible and that consumers will not be disadvantaged.

    The test case does not mean that consumers are too late to complain. But until the outcome of this legal action is known, the FSA has allowed banks to suspend their work on complaints about the charges. Because the legal issues have not yet been determined, the FSA has not intervened in the levying of the charges, however it has set strict conditions that banks must follow, designed to ensure consumers’ ability to recoup charges levied prior to or during the test case, will be unaffected.

    Firms with the ‘waiver’ must:

    · Not take the period, during which the waiver is in place, into consideration in any decisions made about limitation periods or time limits for complaints;
    · Not make materially adverse changes to the level of charges during the waiver;
    · Do all they can to help account holders avoid incurring these charges in the first place;
    · Apply the relevant principle(s) established in the test case when dealing with complaints about charges; and
    · Continue to deal with genuine hardship cases during the waiver period

    It is for the courts to decide how to deal with claims put directly before them.

    I hope that this information is helpful to you and that this matter will be resolved to your satisfaction.

    ___
    Now what do you make of this…..

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