Article in Daily mail today 01/04/2006

[maestro451]

Not sure if this has been bought up but theres an article concerning charges in the daily mail on page 2, it says that the OFT will anounce there sinding and recomendations on wednesday

[Spiceskull]

There was mention of it in another post yesterday - a board member saw an article, I emailed the journalist, and he told me to look at todays paper (very kind of him...)

http://www.consumeractiongroup.co.uk/forum/showthread.php?t=3173

[Dave Johnson]

It was also mentioned on BBC news this morning 0718 HRS, with one of the editors of Which magazine and some wally from a bank. Which are encouraging people to follow the step by step guide in their online mag to take banks to court to recover charges. Not very informative compared with this site, but they are interested in people who have taken court action to get in touch. Hopefully this will generate more publicity.

Cheers

Dave.

[trundlecat]

here's the article in todays mail:

 

http://www.dailymail.co.uk/pages/dmstandard/frame.html?in_bottom=http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=407971&in_page_id=7&ct=5

[JamesBooker]

here's the article in todays mail:

 

http://www.dailymail.co.uk/pages/dmstandard/frame.html?in_bottom=http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=407971&in_page_id=7&ct=5

 

That's a different article, this is the one being refered to:-

 

 

 

Daily Mail Saturday April 1st 2006

 

BANKS MUST STOP £750m CREDIT AND OVERDRAFT RIP-OFF

By Sean Poulter

Consumer Affairs Correspondent

 

The big banks are to be ordered to slash charges on credit cards and overdrafts in a move that will end a rip-off totalling more than £750 million a year.

 

The Office of Fair Trading has decided the charges, which run from £20 to £39 at a time, amount to an unfair penalty on millions of Britons.

 

The watchdog is expected to introduce a cap whcih could bring them down to £15 or even £10.

 

The OFT has concluded that the charges are unfair under the Consumer Contract Regulations 1999, coupled with case law dating back to 1914.

 

These state that charges must be proportionate rather than used as a penalty to punish delinquent customers or a ruse to boost profits.

 

The OFT has been spurred into action by complaints from angry consumers and the fact that finance giants have imposed dramatic increases in these charges.

 

Over the last two years, credit card late payment fees and those covering overdrafts and bounced cheques have gone up by 40%. However, it appears the tide of rising charges is finally about to be turned.

 

City analysts estimate the cap on fees would cost RBS-Natwest, Barclays, Lloyds-TSB, HSBC and Halifax-Bank of Scotland a total of £750million if it is set at £15, £1.2billion at £10 and £1.65billion at £5. Clare Whyley, of the National Consumer Council, described the current charges as 'completely unreasonable'.

 

She said: 'They are a penalty and a punishment, rather than a true reflection of the bank's costs. That is not acceptable.

 

'These charges should have come down because of the increased automation in the banking system, but in fact they have gone the other way. We would be really pleased to see a system where charges are a true reflection of costs.'

 

Miss Whyley said the big five banks, which delivered record profits of more than £31billion last year, are not in a position to plead poverty. She added: 'The charges hit people when they are at their most vulnerable. Someone might only go £1 overdrawn, but they are then hit with a fee of more than £30.'

 

Consumer group Which? said: 'The reality is that these bank charges are illegal and unenforceable.'

 

It is to name and shame high-charging banks by slapping 'Asbos' - Anti-Social Banking Orders - on the worst offenders and claimed the banks are 'scared to death' at the prospect of having to cut charges.

 

The move by the OFT comes as individuals are using the same law to win refunds totalling thousands of pounds at time.

 

The big banks are on the back foot. Over the last few months they have been offering refunds to angry customers rather than attempting to defend the punishing charges in the courts.

 

The OFT has been investigating the rip-off charges for 18 months. It will announce a final verdict on Wednesday with a view to forcing the banks to slash fees, either through the courts or the Competition Commission. The process could take anything from a few months to a year.

 

The banks have rejected claims that charges are 'excessive'. They say they reflect costs and can be easily avoided if customers manage their accounts properly. They have threatened to challenge any cap in the courts.

 

Insiders suggest they will attempt to introduce other charges, such as an annual fee on credit cards or higher interest rates, to cover any reduction in penalty fees.

[Spiceskull]

James - you pipped me to the post! The URL points to the article that prompted me to contact the journalist, who then gave me advance warning of Saturday's article (referred to in my previous posting...)

[BankFodder]

Read the thread on the radio 5 interview with Which? and Which?'s new campaign

[maestro451]

This topic was closed on 03/07/19.

If you have a problem which is similar to the issues raised in this topic, then please start a new thread and you will get help and support there.

If you would like to post up some information which is relevant to this particular topic then please flag the issue up to the site team and the thread will be reopened.

- Consumer Action Group