Billions in charges on UK current accounts held by banks
The banking sector is expecting big changes following the publication of a report by price comparison company uSwitch that has revealed £2.12 billion in unfair charges waiting to be reclaimed.
Almost 19 million people with UK current accounts have been hit with bank charges totalling £4 billion and 52% of these account holders have not been able to reclaim their money.
The research also revealed that while 65% of these people have disputed the charges at some time, only 48% have successfully won a refund. Almost one in 10 have written to a regulatory body, such as the Financial Ombudsman, and threatened their bank with legal action.
Of the few account holders who have taken their bank to court, 14% claim that their UK accounts were shut down as a result.
On the subject of free banking, the banks’ arguments for ending it for UK current account holders focus on the fact that customers who go overdrawn currently pay for those who do not and that they face costs in running current accounts for everyone.
Nick White, director of financial services at uSwitch, said: “While the majority of banks are bending over backwards to refund charges to those consumers who have taken the initiative to fight back, this is not because they have gone soft in the last few months.
“They would simply rather settle now than have to appear in court and face a damaging test case with one of their UK current account holders, which would set a dangerous legal precedent.”