- MoneyExpert.com urges customers to compare accounts and understand charges
Bank customers are demanding the Office of Fair Trading to press ahead with its court case on ‘unfair’ charges, new research* from MoneyExpert.com finds. The findings follow the recent indication from the OFT that it would call a halt to proceedings if the banks reduced their charges voluntarily.
Research from the independent financial comparison website found that 83% per cent of bank customers back the case in the hope it will draw a definitive conclusion to the battle over bank charges.
MoneyExpert.com’s research also shows that 52% of bank customers agree with the principle of paying bank charges. But only 17% of them say they understood how charges work when they opened the account and 71% described bank charges as unclear and demanded greater transparency.
Since the announcement of the test case a number of banks have revamped accounts by making various changes to their charging structures including cutting interest rates and charges.
Banks who have made changes include Alliance & Leicester, First Direct, Lloyds TSB, HBoS and Abbey with others predicted to follow.
Sean Gardner, chief executive of MoneyExpert.com, said: "The banks are starting to pre-empt the OFT by softening their terms and conditions, but the OFT mustn’t view this as an early victory.
"The only way customers can achieve a satisfactory, long term conclusion is by the OFT going to court. An out of court agreement between the OFT and the banks will only leave the waters muddy for the millions of customers reclaiming bank charges.
"Changes that have been announced have made charges clearer and customers who are unhappy with their bank should switch while making sure they know exactly what they are signing up to at their new bank."
Alliance & Leicester has dropped overdraft interest charges and replaced them with fees – customers with an authorised overdraft will pay a maximum £5 a month while those who go into the red without permission will pay £5 a day for exceeding their limit.
Lloyds TSB has brought unauthorised overdraft fees in line with its authorised overdraft rates as well as introducing a sliding scale to make charges proportional to the actual overdraft excess. It is also offering a paid for text messaging service to notify customers when they are near their overdraft limit, costing £2.50 per month.
Abbey has implemented a similar tiered overdraft system to Lloyds, plus a flat £25 per month overdraft excess charge. First Direct has taken the radical move to ditch interest on credit accounts and offer higher savings rates instead. It is also offering a free overdraft text messaging service. HBoS has also pledged to end multiple charges stacking.
How do I claim back my charges?
If you’ve got all your bank statements from the past six years, you’re not only incredibly organised but also incredible fortunate. All that diligence will now pay off because all you have to do is highlight all the charges you’ve incurred, total it up and then fill in a compensation form, available from the BBC –
If you don’t have all your statements you can request them. The banks are legally obliged to send you your statements upon request though they are able to charge up to a maximum of £10 for this. If you enclose a cheque for £10 you won’t delay the process. If you have a large amount to claim back the £10 spent now is worth it!
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* ICM Research interviewed a random sample of 1016 adults aged 18+ online 17th – 19th August 2007. Interviews were conducted across the country and the results have been weighted to the profile of all adults. ICM is a member of the British Polling Council and abides by its rules.