19th
February 2007
How to Beat the Bank Robbers:
As the UK's top banks prepare to report
combined profits of £38bn for the past year, MSP for Greenock and Inverclyde,
Duncan McNeil, is helping his constituents fight back against excessive bank
charges. He says that punitive fees
levied for going overdrawn, exceeding an agreed overdraft limit, or having a
transaction declined are not enforceable in law and that many customers have
already received substantial refunds.
Launching
a handy 3-step guide to help customers get their money back, Mr McNeil said:
“We’ve
all had those letters charging us £30 for the privilege of being told that
we’ve gone a few pounds overdrawn. And
it’s all the more infuriating when you’ve been on the phone to the bank,
trying to explain that, through no fault of your own, your wages were late or a
cheque you paid in bounced. They’re
not interested in listening because it’s a nice little earner and they’ve
been getting away with it for years.
“And
it is, of course, the banks’ poorest customers who are hardest hit.
It doesn’t seem to bother the banks that it’s the £30 letters and
other charges they keep piling on and piling on which are keeping those
customers in the very financial difficulties for which they are being penalised.
“What
does bother them, though, is that fact that such penalty charges contravene an
established principle of Scots law. Charges
should only reflect the true administrative cost of dealing with the default –
and how much does it cost to send a computer-generated standard letter?
It’s pence, not pounds.
“I
am therefore urging my constituents who have been hit by these charges to get
hold of my handy 3 step guide and start to fight back.”
One
successful claimant is Scott Macdonald from Inverkip, who added:
“I’d
heard about claiming back excessive bank charges, but put it off because I
thought it would be too much hassle. All
it took, though, was a few letters and phone calls and I got a refund of over £5000.
“Some
of my friends have also claimed back thousands and I would encourage everyone in
my position to get hold of the handy step-by-step guide which Duncan has
published and demand their money back.”
On 5th April 2006, the Office
of Fair Trading (OFT) announced that default charges which are set at more than
£12 will be presumed to be unfair and unenforceable in terms of the Unfair
Terms in Consumer Contracts Regulations 1999 (SI 1999/2083).
Charges above this sum will be subject to legal action by the OFT (press
release 68/06).
The OFT has also stated that
a charge is not automatically fair simply because it is below this sum.
It is an established
principle of Scots law that a contractual party can only recover damages for
actual or liquidated losses incurred from a breach of contract
(Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd.
(1904) 12 SLT 498). In cases where
actual loss simply is the cost of automatically sending a customer a
computer-generated letter, the charges being levied by banks are clearly not
reflective of actual loss, but are in fact penalty charges.
Copies of the information
pack are available here, or from his
local office: 791820.
ENDS
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