Bank charges investigation to be widened by Office of Fair Trading

The investigation into illegal and unlawful charges imposed by banks has been going on for some time, with regulatory bodies in the UK looking into the amounts that banks have been charging customers that exceed their overdraft limit or in cases where cheques bounce or direct debits are returned.

As a result of this many consumers have been able to claim back their bank charges going back up to six years, with some claiming thousand back from banks that are unable to justify the charges and do not want to end up being taken to court.

In a recent announcement the Office of Fair Trading has announced that it will be extending its ongoing investigation into the charges that are being imposed by banks. Even though customers from all around the UK are claiming back their charges from the various banks, these banks are still continuing to impose the charges. And it is now thought that if the Office of Fair Trading does impose a ceiling limit on charges, which is was due to do later this year, banks could look at other ways of recouping the lost revenue, such as putting an end to free banking and charging consumers a monthly fee to hold an account.

Last year regulatory bodies in the UK did the same thing with credit cards, where a ceiling limit was placed on the amount that credit card companies could charge for penalty fees, and this saw a number of credit card companies employ tactics to try and increase revenue in other areas, such as higher interest rates, increased foreign fees, etc. Banks incur a fee of around £2-£5 for administration when dealing with customers that go over their overdraft limit or where cheques or direct debits are returned, but in some cases customers are being hit with fees of around £40, which means that the bank is making illegal profits.

Tom Smith
9th May 2007

Tags: bank charges, office of fair trading, bank charges going, overdraft, consumers