Reclaim Unfair Bank Charges

Bank customers are demanding that the court case against the eight major high street banks goes ahead after reports indicated that the OFT may consider dropping it.

The Office of Fair Trading (OFT) has indicated that it would call a halt to proceedings if the banks drop their charges voluntarily. However, according to research conducted by MoneySavingExpert.com, 83 per cent of bank customers back the case in the hope that it will bring an end to the battle over bank charges.

Following the announcement of the test case, which is scheduled to start on 14 January 2008, before Lord Justice Smith, some banks have made changes to their charging system including adding monthly fees for overdrafts and cutting interest rates.

Sean Gardner, chief executive of MoneyExpert.com, explains: “The banks are starting to pre-empt the OFT by softening their terms and conditions, but the OFT mustn’t view this as an early victory.

“The only way customers can achieve a satisfactory, long term conclusion is by the OFT going to court. An out of court agreement between the OFT and the banks will only leave the waters muddy for the millions of customers reclaiming bank charges.”

Already, several banks have made changes including the Alliance and Leicester which has dropped overdraft interest charges and replaced them with fees meaning customers with an authorised overdraft must now pay a maximum £5 a month and if they go into the red without permission, they will have to pay £5 a day for exceeding their limit.

In another ploy to reclaim customers’ trust, Lloyds TSB has brought unauthorised overdraft fees in line with its authorised overdraft rates as well as introducing a sliding scale to make charges proportional to the actual overdraft excess.

In addition, it is also offering a paid for text messaging service to notify customers when they are near their overdraft limit for a monthly charge of £2.50.

Likewise, Abbey has implemented a similar tiered overdraft system as well as introducing a flat £25 per month overdraft excess charge.

First Direct however, has cut interest on credit accounts and is offering higher savings rates instead and is also offering the free overdraft text messaging service. While HBOS has also pledged to end multiple charges stacking.