Myvesta UK Articles

On 5 April 2006, the Office of Fair Trading announced that any penalty charge over £12 in a standard credit card contract was likely to be unfair. This led to large numbers of people being advised to ask their credit card providers for information, held as part of their old credit card statements, to find out how many times they have been charged more than £12 so that they can reclaim the difference.

A recent admission from a claimed Northern Rock debt management department employee raises new evidence and concerns about the banking policies of Northern Rock and their flagrant and abusive disregard for consumers with repayment problems.

So I just finished reading the 39 page Office of Fair Trading  response to the bank charge court case going on against Abbey National, Barclays Bank, Clydesdale Bank, HBOS, HSBC, Lloyds TSB Bank, Nationwide Building Society, and the Royal Bank of Scotland Group. I would not suggest reading the document if you are in need of a nap.

Banks were this week accused of seizing on a recent Lloyds TSB court victory to try to frighten people into not claiming back "illegal" penalty charges. Abbey and the Yorkshire and Clydesdale banks have been writing to customers who have demanded the return of charges in an apparent bid to get them to drop their claims.

The letters have quoted details of this month's case at Birmingham county court, where a judge dismissed a claim for £2,545 from Lloyds TSB customer Kevin Berwick. The judge decided that the bank's charges were legitimate fees for servicing an overdrawn account. Now customers of other banks have reported getting letters, and in some cases phone calls, that they say appear to be designed to put pressure on them to throw in the towel.

In the end it took three days, and struggled to get away from the issues at the heart of the controversy surrounding charges that many borrowers are calling unfair and illegal.

Rather than a dry legal hearing, it became a dress rehearsal for a trial - as both sides argued over whether it was fair that banks charged customers for running up unauthorised overdrafts.

"We effectively had a mini-trial," Mr Brennan said after the hearing.

"You are not supposed to have a mini-trial, but that is exactly what we did. At least it shows there are arguable issues."

The key issue is that a full trial would force the bank to justify why it charges quite so much when people go overdrawn without permission - something the bank has refused to do so far.

At the heart of the argument were charges of £28 per month for being in the red without permission, and a further charge of £38 that the bank imposed for every bounced cheque or standing order.

"The charges are unfair because they do not reflect the actual loss to the defendant," said Mr Brennan.

He added that the trial should go to court because it "would have significant impact beyond the claimant and the defendant".

A two-year investigation focussed on the four NI banks which control 75% of the current account market.

It said charges were not clear and current account customers faced an unduly complex charging structure.

The commission concluded that Northern Ireland customers incurred higher charges and received lower levels of interest than elsewhere in the UK, and that they were reluctant to switch banks.

 

An article describing how one person successfully claimed back £485 in unfair bank charges from Abbey.

Bank charges are claimed to be illegal, a court has yet to make that ruling but there certainly is a good argument that banks are charging unfair bank charges, and the UK Office of Fair Trading strongly agrees.

Listen to BBC Moneybox interview using RealPlayer where Lloyds TSB representative refuses to answer the question about the actual cost of bank charges and walks out of the studio.

Banks are charging consumers unfair charges for bank and credit card fees. It is possible to recover those charges. This article explores why the charges are unfair and how you can recover them.