Many bank charges illegal - Taylor
January 16, 2007 12:56 PM
Mr Many high street banks are making large profits on the back of illegal charges on customers, a leading Liberal Democrat will say today (Tuesday).
Liberal Democrat Shadow Social Exclusion Secretary, Matthew Taylor MP will use Parliamentary Privilege to attack this practice during an Adjournment Debate.
Banks are only supposed to charge customers for the real cost of a transaction, rather than to make a profit. However, millions of the poorest people in Britain are thrust further into debt each year, by being charged up to £30 every time for having insufficient funds to cover payments out of their accounts. In many cases this is beyond the control of the customer, whose benefit payment has arrived late or not at all.
Commenting, Mr Taylor said:
"Each year millions of customers receive penalty charges from their banks.
"Every time someone is charged the bank makes a profit of up to £30. However, under common law and the 1999 Unfair Terms in Consumer Contracts Regulations, this is illegal.
"The banks should only charge for their real costs, not make a profit out of poverty.
"I have helped many people go to court to reclaim hundreds and sometimes thousands of pounds in unjustified bank charges. The banks are never prepared to defend themselves in court because they know that if they do they'll lose, and once they've lost once, they'll forfeit these profits forever.
"They rely on customers believing them when say that these charges are legitimate.
"Millions of people are being ripped off by their own banks, plunging the poorest deeper into debt. The Office of Fair Trading has failed to act, and the banks are dodging the courts.
"I call on everyone who has received one of these charges to phone their bank and demand the money back - it's your money. "
Applicability: this item refers to England and Wales. Due to devolution, detailed policy may be different in other areas of the UK.
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