Banks Take Hit Over Charges
JANUARY 12TH, 2007
| Credit Cards (introductory rate & period) |
Typical APR | Options |
| Virgin Credit Card 0% balance transfers, 13 months ( 2.9% balance transfer fee ) 0% purchases, 3 months |
15.9% (variable) |
 |
| Post Office Credit Card 0% balance transfers, 8 months ( 2.5% balance transfer fee ) 0% purchases, 3 months |
14.9% (variable) |
|
| Personal Loans | Typical APR | Options |
| Moneyback Bank Personal Loan | 5.7% | |
| Northern Rock Personal Loan | 5.8% | |
Over 150 people a week are succeeding in getting their bank charges refunded by complaining to the Financial Ombudsman Service.
In most cases the Ombudsman has ruled a charge of more than £12 is unfair.
Typically around £30, fees can sometimes mount up to thousands of pounds when levied repeatedly.
Penalties imposed for paying a debit from an account with insufficent funds can often lead to a second charge for breaching an overdraft limit.
Deluged
A series of cases where viewers have threatened their banks with court action and have had charges refunded have previously been highlighted by Working Lunch.
Increased publicity surrounding the possibility of winning money back has lead to banks being deluged with court claims.
However, many customers are now choosing instead to contact the independent Financial Ombudsman Service.
Complaining to the Ombudsman involves filling in a four page form explaining your case - much less daunting than the prospect of a court case.
We just need to get the message across that they don't need to go to court
Trevor Whitton, Chiltern Claims
The process is free and if the complaint is filed correctly the bank gets charged £360.
Unhappy
However, this route is only open to those who have already complained direct to their bank and are unhappy with the response.
The Ombudsman service deals with thousands of complaints on financial matters, but bank charges now account for over half the initial enquiries they receive.
From only 10 a week last year, cases are now flooding in at a weekly rate of around 150.
The Ombudsman's findings are binding on banks, but customers can still go to court if they're unhappy with the outcome.
Trevor Whitton, a financial advisor with Chiltern Claims is worried more people are not claiming because they are fearful of the legal process.
"We just need to get the message across that they don't need to go to court," he told Working Lunch.
Fair charge
So far the banks have failed to contest any of these claims, although in many cases complainants haven't received as much as they had hoped for.
Typically, the Ombudsman has made an assumption that around £12 is a fair charge for a bank to make for a breach of account rules.
So in cases where fees are around £35, banks have been ordered to repay the difference, of about £23.
For those who have suffered repeated charges over several years, this could amount to a very welcome payback.
