Banks face day of reckoning for unfair charges
Britain’s High Street banks will have to set aside huge amounts of money to repay customers unfairly charged on their current accounts, according to many City analysts.
The banks face a potentially massive bill for charges on UK current accounts going back as far as six years, as many customers have complained about the fees levied on their UK current accounts.
The consumer campaign to recover bank charges has gained momentum in the past few months, with the Financial Ombudsman Service handling 5,000 complaints a day last week alone.
One bank chief executive said: “This is even more extreme than the endowment mortgage campaign.” However, no bank has as yet announced a specific figure for the amount it will set aside for the refunds.
A report is due from the Office of Fair Trading (OFT) which is expected to lead to demands for a review of bank charges applied to UK current accounts similar to the one recently imposed on credit card companies, which have had their charges capped at £12 for people in default of a payment.
Independent research has estimated that the High Street banks charged customers £4.7bn for unauthorised overdrafts in 2005, and if customers reclaimed just half of their charges for the past six years the total amount payable could be in excess of £10bn.