Bank charges complaints rise massively
The Financial Ombudsman is receiving about 1,000 calls a day from people complaining about the charges levied on their UK current accounts.
Only 12 months ago the Ombudsman was receiving about 100 calls a week on this issue, but the volume of demands for banks to make refunds to customers they have charged has increased significantly in recent months.
Consumer groups have argued that the penalty charges imposed by the banks are illegal and do not reflect the true cost of the administration needed to service them. They have encouraged aggrieved customers to sue their banks in consequence.
The Ombudsman has said that in all penalty charge cases it had investigated, the bank or building society had settled out of court before a judgement could be given and a legal precedent set for holders of UK current accounts.
The issue is now the predominant one for callers to the Ombudsman. “Previously the largest number of complaints we received related to endowments,” a spokesperson explained.
“However, we are getting at least three penalty charge calls for each one about endowments at the moment.”
Last May, the Office of Fair Trading (OFT) said credit card default charges should only reflect the company’s costs in levying them, and added that the same should apply to overdrafts and default charges on UK current accounts.