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Closed account customers seek justice from FSA

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Written by:
07/03/2007

Some bank customers with UK current accounts who have had their accounts closed after complaining about bank charges have had their cases referred to the Financial Services Authority (FSA).

The referrals – believed to involve one bank and one building society – were made by the Financial Ombudsman Service, which is concerned that these UK current accounts holders have been treated unfairly by their banks.

Banks and building societies are facing a massive level of popular protest at the charges they impose on their customers, especially UK current account holders.

Many people have successfully applied for refunds for these charges, as the banks prefer to settle out of court to avoid a legal precedent being set that would cost them tens of millions in refunds.

“This is one of the hottest retail banking potatoes in years,” said a former High Street bank executive who declined to be named.

“We are basically running scared of a court judgement that would truly open the floodgates for refunds of bank charges that may be ruled as ‘misapplied’. I really don’t know how it will end now.”

Many websites have been launched that include downloadable ‘pro forma’ letters for UK current accounts holders to send to their banks – and the issue has become a national ‘cause celebre’ in the financial press.

 

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