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28 June 2007
The recent controversy over bank charges for exceeding overdraft limits and for returned cheques and direct debits have been making headline news in the financial world.
Following a ruling by UK regulators last year that these charges - often amounting to nearly forty pounds per charge – were unlawful and unfair many consumers in the UK have claimed back charges going back up to six years.
For some consumers this has amounted to refunds of thousands of pounds, and although the banks have been paying up in the vast majority of cases they have also been using a range of tactics to try and stop consumers from making these claims.
The latest strategy that is being used by a number of banks relates to customers that have already claimed back charges, and aims to stop them from making further claims for refunds on future charges.
Some experts feel that the action that these banks are now taking could be illegal - including sending out letters to customers that have claimed back charges stating that if they take action to claim back future charges their current accounts may be closed altogether. This type of letter has already been sent out by the Royal Bank of Scotland amongst others.
The RBS letter reads: "Any charges that properly accrue in the future will be applied to your account in line with our published tariff and in accordance with your agreement with the bank. Should you be unwilling to accept any such charges, then we may need to consider if we are prepared to continue to provide you with your existing banking facilities. Instead, we may offer you a simple account that does not offer borrowing facilities or other services that can result in charges."
When questioned about the letter and its viability a spokesman for the bank stated: "If a customer is unwilling or unable to pay the charges for the services we provide or is considered a particular credit risk, then it is wholly appropriate for us to consider whether their existing account is best suited to their needs. As a responsible lender it may be appropriate to provide them with a more suitable account."
Many consumers that have not received immediate refunds from banks have taken their claim to court, and in all but two cases the judge has ruled in the customer's favour, as bank officials have not even turned up to put forward their case. However, recently Lloyds TSB won two cases, where the judge ruled in the bank's favour.
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