Banks threaten customers reclaiming charges

by Gill Montia

Story link: Banks threaten customers reclaiming charges

This is Money, the financial news website, has reported that thousands of people who have complained about unfair bank charges have been threatened with having their accounts closed.

In a clear breach of industry guidelines, some of Britain’s largest banks are reported to be involved in bullying customers who are challenging the level of their default charges.

The survey by This is Money found that over one in eight respondents reclaiming excessive bank fees had been threatened with having their account and overdraft facilities closed.

Many of these customers incurred the unreasonable charges because they were in financial difficulties and the alleged threats breach the Banking Code.

They are also an affront to rulings by the Financial Ombudsman, which state that banks must treat customers fairly when they are in financial difficulty.

In the survey, approximately half of the respondents believed that they were owed over £1,000 in default charges and of those who had lodged complaints, roughly 25% had been successful in reclaiming the full amount.

However, only 17% of successful claimants received their money within a month. A further 17% waited over a year.

According to Credit Suisse, the investment bank, fee reclaiming has cost UK banks £200m this year and it is estimated that the backlash against excessive charges could cost major banking groups 1% of profits, in 2007.