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Coatbridge MP Clarke wants end to bank charges ‘bonanza’
Jul 8 2009 by Wendy Scott, Airdrie & Coatbridge Advertiser
COATBRIDGE & Chryston MP Tom Clarke has demanded an end to “bonanza” bank charges.
During a debate in the House of Commons Mr Clarke took his ongoing battle with banks over unfair charges to a new level, when he called for Government intervention to end the litigation row that has raged for the past two years.
He said: “The banks have dug themselves into a very deep litigious hole on this issue of bank charges. Now this litigation has reached the Law Lords, I believe it is time the Government stepped in and said enough is enough. After all, when the banks went bust, they were rescued by public money. The Government have ploughed countless billions into saving the banks from collapse and to help protect savers.
“The Government not only has the moral authority but the financial leverage to leave the banks in doubt that litigation ends when the House of Lords announce their decision. There are two other decisions that should follow the Law Lords Judgment: The Financial Services Authority should remove immediately the waiver and the Office of Fair Trading should be allowed to determine: what is a fair charge? “My purpose in this debate is to highlight the scandal of unfair bank charges that punishes consumers, especially the most vulnerable, in a manner that should make us all feel ashamed and it is about time we remedied this unfairness.”
Speaking in the House of Commons, Mr Clarke claimed: “There are a great many of my constituents who will be pleased that I am taking this opportunity to highlight what history will surely judge as a 'financial injustice' perpetrated by the power of banks against individual consumers. I have been very critical of the banks and these criticisms have been reported in the Airdrie & Coatbridge Advertiser.
“This newspaper takes a very keen interest in bank charges because they know how cruel punitive and grossly unfair they are to local people.”
In July 2007, the Office of Fair Trading entered into a written litigation agreement with seven banks, one building society and the Financial Services Authority with a view to bringing a test case to ensure an orderly and efficient process for resolution of the legal issues. At that time the FSA issued what is known as a waiver.
Mr Clarke said: “Before this ‘waiver' was invoked, we had the scandalous position in 2007 where banks paid out a staggering £784m to approximately 378,000 customers. I believe we can take it as read that banks wouldn't pay out a single penny if they didn't need to.”
The MP also claimed that he was against the test case from the outset.
He added: “My concern at that time was that this legal process which was initiated by the Office of Fair Trading could drag on endlessly certainly beyond what is reasonable and end up in the House of Lords. That is what I predicted two years ago and that is exactly what has happened.”
Mr Clarke summarised the dispute when he added: "For the past two years, banks have enjoyed bonanza bank charges and they don't have to deal with complaints. Thus far, the banks are the winners and my constituents are the losers. In my office I have countless examples where banks have imposed unfair charges on customers who may - only for a brief period - have been a few pounds short in their account. There is one example in Coatbridge - a mother with three children who is a single parent and until recently employed but unfortunately recently lost her job.
“Within a matter of weeks, she was hit by the bank with three £35 bank charges. This mother depends on state benefits and, however much she tries for a remedy with the bank, it is like banging her head against a brick wall.”
Mr Clarke proposed a new deal for consumers suffering hardship when he said: "I want to see every bank set up a dedicated hotline so that customers in hardship can be dealt with immediately. I believe banks have a duty to provide a more responsive service particularly while this waiver is in place. I intend to pursue this issue with the Financial Services Authority, with the support of other MPs.
“ But I want Government Ministers to accept that the status quo is unacceptable and that a better system is needed to deal with complaints about unfair bank charges for people suffering hardship.”
Jul 8 2009 by Wendy Scott, Airdrie & Coatbridge Advertiser
COATBRIDGE & Chryston MP Tom Clarke has demanded an end to “bonanza” bank charges.
During a debate in the House of Commons Mr Clarke took his ongoing battle with banks over unfair charges to a new level, when he called for Government intervention to end the litigation row that has raged for the past two years.
He said: “The banks have dug themselves into a very deep litigious hole on this issue of bank charges. Now this litigation has reached the Law Lords, I believe it is time the Government stepped in and said enough is enough. After all, when the banks went bust, they were rescued by public money. The Government have ploughed countless billions into saving the banks from collapse and to help protect savers.
“The Government not only has the moral authority but the financial leverage to leave the banks in doubt that litigation ends when the House of Lords announce their decision. There are two other decisions that should follow the Law Lords Judgment: The Financial Services Authority should remove immediately the waiver and the Office of Fair Trading should be allowed to determine: what is a fair charge? “My purpose in this debate is to highlight the scandal of unfair bank charges that punishes consumers, especially the most vulnerable, in a manner that should make us all feel ashamed and it is about time we remedied this unfairness.”
Speaking in the House of Commons, Mr Clarke claimed: “There are a great many of my constituents who will be pleased that I am taking this opportunity to highlight what history will surely judge as a 'financial injustice' perpetrated by the power of banks against individual consumers. I have been very critical of the banks and these criticisms have been reported in the Airdrie & Coatbridge Advertiser.
“This newspaper takes a very keen interest in bank charges because they know how cruel punitive and grossly unfair they are to local people.”
In July 2007, the Office of Fair Trading entered into a written litigation agreement with seven banks, one building society and the Financial Services Authority with a view to bringing a test case to ensure an orderly and efficient process for resolution of the legal issues. At that time the FSA issued what is known as a waiver.
Mr Clarke said: “Before this ‘waiver' was invoked, we had the scandalous position in 2007 where banks paid out a staggering £784m to approximately 378,000 customers. I believe we can take it as read that banks wouldn't pay out a single penny if they didn't need to.”
The MP also claimed that he was against the test case from the outset.
He added: “My concern at that time was that this legal process which was initiated by the Office of Fair Trading could drag on endlessly certainly beyond what is reasonable and end up in the House of Lords. That is what I predicted two years ago and that is exactly what has happened.”
Mr Clarke summarised the dispute when he added: "For the past two years, banks have enjoyed bonanza bank charges and they don't have to deal with complaints. Thus far, the banks are the winners and my constituents are the losers. In my office I have countless examples where banks have imposed unfair charges on customers who may - only for a brief period - have been a few pounds short in their account. There is one example in Coatbridge - a mother with three children who is a single parent and until recently employed but unfortunately recently lost her job.
“Within a matter of weeks, she was hit by the bank with three £35 bank charges. This mother depends on state benefits and, however much she tries for a remedy with the bank, it is like banging her head against a brick wall.”
Mr Clarke proposed a new deal for consumers suffering hardship when he said: "I want to see every bank set up a dedicated hotline so that customers in hardship can be dealt with immediately. I believe banks have a duty to provide a more responsive service particularly while this waiver is in place. I intend to pursue this issue with the Financial Services Authority, with the support of other MPs.
“ But I want Government Ministers to accept that the status quo is unacceptable and that a better system is needed to deal with complaints about unfair bank charges for people suffering hardship.”
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