Bank Charges

Like a rerun of the poll tax era, ordinary people are resisting a common injustice, leading Small Claims judges to complain of being swamped by claims against unfair bank charges. (1)

Administering an unauthorised overdraft, or stopping a cheque are variously estimated to cost less than £2.50 or generously assuming senior management involvement, at most £4.50. Yet most automated banks levy unlawful “penalty fees” from £20 to £39.

Contract law states that such charges should merely recover costs and not penalise. Therefore most claims are settled before reaching court. In court, with few exceptions, judges invariably find against the banks, including 8% statutory interest, principally due to their secretive unwillingness to provide evidence of actual costs. (2),(3).

Assisting a number of local households in preparing their claims it becomes apparent that, like a poll tax, charges hurt those least able to afford it - working mother’s on low income.

For example, in six years, the maximum reclaiming period, three households were mugged for an approximate total of £9,900, leading to council tax, rent arrears and further stress from unsympathetic institutions wielding very big sticks.

These losses restricted their ability to provide, undermining their childrens’ general welfare and morale. I wonder what percentage of Working Tax Credit, Child Allowance and minimum wages, purported to lift 3.8 million British children out of poverty, is subsidising the dubious economies of banking tax havens ? (4),(5).

Despite this anti-social behavior, government and employers encourage benefit recipients and employees to use accounts with FTSE listed banks, which made massive £45 billion profits last year.

Which? Consumer group estimates that £4.75 billion, approximately 10-12%, came from illegitimate penalties. By coincidence, a similar amount of annual investment is suggested as necessary to fight child poverty by an “outraged” Save the Children. (4),(6).

With some 60 million people living in Britain, and 580,000 in North Yorkshire, a rough average suggests that banks’ penalty profits are £79 per man, woman and child. Approximately £46 million may be illegitimately skimmed from the local economy annually - over a quarter billion pounds in six years, not including statutory interest.

For the benefit of the local economy and families, particularly those without internet access, I wonder why public bodies tasked with economic development and family welfare, do not provide advice and resources for reclaiming charges en masse ?

In absence of public help those with internet access can find guidance and resources at www.moneysavingexpert.com, www.consumeractiongroup.co.uk and www.bankchargeshell.co.uk.