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major feature in the Indie today - well worth buying the original.
Some other links from the webpage too!
http://news.independent.co.uk/busine...cle2914378.ece
£2.6bn bank charges payback for 3.8m customers
Six months after The Independent began its campaign against unfair bank charges, the cost of the resulting repayments is revealed
By Martin Hickman, Consumer Affairs Correspondent
Published: 31 August 2007
Consumers challenging charges for overdrafts and bounced cheques have claimed back £2.6bn from Britain's financial institutions, according to figures that suggest the rebellion against the banks is taking place on a greater scale than imagined.
In a dramatic victory for The Independent's six-month assault on the charges, an estimated three million people have obtained a full or partial refund from their bank or building society.
The figures come from a YouGov poll which found that more than one third of customers had been charged fees since 2001. Refunds averaged £685. One in 20 bank customers had been billed more than £2,500. Applying the figures to the general population, the price comparison website uSwitch said its research showed that 3.8 million current account customers would have received refunds with a total of £2.6bn.
The British Bankers' Association disputed the figure but declined to give its own estimate of the cost of the revolt against its members.
Campaigners, the consumer group Which? and the Office of Fair Trade believe unauthorised borrowing fees of up to £38 a time are illegal because they exceed costs. But in a deal that has infuriated campaigners, the OFT is allowing banks to continue levying them while freezing compensation claims until a High Court test case in January.
From its polling of 4,000 customers, uSwitch said Lloyds was the most aggressive big high street bank, billing £800 over the six years, with a £30 fee for an overdraft. But it said Abbey was the most prolific, charging £1,376, or £230 a year.
As the campaign against charges has gathered pace, millions of forms challenging the banks and threatening them with legal action have been downloaded from the internet. Martin Lewis, whose moneysavingexpert.com has received more than three million downloads believes a further £500m to £1bn in refunds is currently frozen pending the OFT case.
If uSwitch is right, the banks have been paying out far more money to aggrieved customers than estimated by City analysts, who have hitherto underestimated the scale of the revolt.
The investment bank Credit Suisse suggested earlier this year that the revolt would knock £200m off the banks' interim profits. In fact, the five biggest groups HSBC, Barclays, RBS Group, HBOS and Lloyds paid out a total of £400m in the first six months of 2007. Given that those five have 65 per cent of the current accounts in the UK, the total level of refunds so far this year may be £550m.
Campaigners have hailed the amount being back paid as an example of people power. "There is a massive sense of empowerment. We get letters and emails saying: 'This is the first time I have stood up to an organisation'," said Marc Gander, of the Consumer Action Group.
"The strength of feeling is enormous. We are talking about people who have had their entire lives compromised; their families compromised and their businesses compromised, simply for fees that will turn out to be illegal."
Angela Knight, chief executive of the British Bankers' Association, said uSwitch's figures were "misleading, and to portray the industry in this way is totally wrong ... We are working with the statutory consumer protection authorities to bring about a legal and fair resolution of the debate over the fees we levy for unauthorised overdrafts."
The campaign against the fees began in earnest last year after a Plymouth law student, Stephen Hone, objected to two £32 charges levied by Abbey and looked up the law books. There, he found the 1999 Unfair Terms in Consumer Contracts Act, which allowed him to reclaim his charges and he sued the bank. Abbey paid £840 before the case reached court, sending shock waves through the financial system.
Opposition snowballed in February this year when The Independent put its campaign on the front page three times in a week. National television bulletins and other national newspapers took up the story and hundreds of thousands of claims flooded into the banks and the Financial Ombudsman Office, which at one stage was receiving 3,000 complaints a day.
Customers have successfully claimed fees running into tens of thousands of pounds. In many instances, the banks have settled straight away, but in others they have engaged in delaying tactics, obfuscation and retaliation by closing accounts. Two hundred people complained to the Information Commissioner that the banks were not detailing past charges in accordance with data protection rules.
Tracy North, of uSwitch, said the campaign against penalty fees had hit a peak, but warned that there were £731m of charges frozen pending the OFT case, saving financial providers £20m in interest alone.
"For the past six years, banks have been able to carry out this practice ... it's good so much money is now being refunded today. But there's a lot more to be refunded." A Which? spokeswoman, Helen Ainsworth, said: "The reason this campaign has struck such a chord with people is because they feel these charges are disproportionate and unfair considering the cost to the bank."
Banks are estimated to make between £1.2bn and £4.7bn a year from charges when their costs are put at no more than £2 to £4 a time, taking into factors such as offices and staff. In all but a few cases, financial institutions have paid out before they have reached court in what campaigners believe is an attempt to prevent the charges being ruled illegal. If they were declared illegal, banks might have to stop charging the fees, which are a useful source of revenue.
The Consumer Action Group and Moneysavingexpert.com have set up a £120,000 fund to establish a legal precedent.
People can claim back unauthorised borrowing fees on current accounts, credit card charges for late payment and mortgage exit fees. Only current account fees have been frozen, though some courts may still accept new cases.
Student pressure forces HSBC climbdown
A very modern revolution forced one of the country's most powerful institutions into a dramatic U-turn yesterday, when HSBC announced it was reversing plans to cancel interest-free accounts for graduates after a mass protest on the social networking site, Facebook.
The bank, Britain's fifth-largest, announced it was "not too big to listen to the needs of customers" and would be reinstating interest-free accounts as well as reimbursing any charges already taken.
The "Stop the Great HSBC Graduate Rip-Off" campaign began just over a month ago when the bank announced it would no longer be offering interest-free overdrafts to new graduates. It insisted it was a commercial decision in response to bad debts, misuse of the accounts and graduates who had no intention of building a long-term relationship with the bank.
Students across the nation aired their outrage on the phenomenally popular website, calling for a boycott of the bank. In the past couple of days, 1,000 people a day were signing up to the National Union of Students (NUS) protest.
Yesterday the bank said its primary concern had always been the burden of debt on students, a worry shared by the NUS, and it looked forward to working with the union to see how its accounts could benefit graduates. Andy Ripley, head of HSBC's product development, said: "Like any service- orientated business we are not too big to listen to the needs of our customers."
Yesterday the NUS welcomed the decision "following enormous pressure from thousands of students and graduates across the country".
Wes Streeting, NUS vice-president (education), said: "There can be no doubt that using Facebook made the world of difference to our campaign. By setting up a group on a site that is incredibly popular with students, it enabled us to contact our members during the summer vacation far more easily than would otherwise have been possible. It also meant that we could involve our former members the graduates who were going to be most affected by this policy.
"HSBC's decision to reverse this policy is a victory for this NUS campaign. The fact that this U-turn has been forced is a testament to the role of unity and communication in empowering students and encouraging fair deals."
People power: customers who got their own back
Nick Kinsella, 33, from Liverpool
Total reclaimed: £5,000
Banks reclaimed from: Halifax
"I was setting up my own company, supplying mineral feed to the horse and cattle industry. It takes a long time to build up a business, and with bank charges of up to £60 a time sometimes when I had only gone overdrawn by 1p it was even more difficult. I felt really angry they were taking money when I was already struggling so much. I'd recently divorced, and I couldn't afford the £80 journey to Swindon to visit my sons. Within a month of lodging the claim I had my money back, and was so relieved. It's daylight robbery what they did; they stole £5,000 of my hard-earned money."
Warren Chadwick, 44, from Halifax, west Yorkshire
Total reclaimed: £2,700
Banks reclaimed from: Halifax
"I'm disabled, and the bank were taking money from my income support because my direct debits were bouncing. Even if I was just a penny short on my bills the bank would charge me £38 to go into overdraft. If I had two charges in a week, that would be almost all my money for that week gone. When I finally got a loan to pay off my debts, Halifax took away all my cards. I was so angry with them they made everything so much harder."
Jolene Ferres, 28, from Cardiff
Total reclaimed: £500
Bank reclaimed from: NatWest
"I gave up my job as a duty manager at the airport at the same time as my husband slipped a disc and could no longer work as a taxi driver. I set up a sandwich shop and my account plummeted, and suddenly the charges started pouring in. I felt sickened, because I had no money, and every time the bank charged me £30 it made it worse. The mortgage was bouncing, as well as all the bills. I went into the bank but they couldn't do anything because the overdraft was maxed out. We were facing the loss of the house it was awful. When the money came through, it was amazing. I honestly thought I'd never get anything that easily."
Alan Rayward, 34, from Telford, Shropshire
Total reclaimed: £2,100
Banks reclaimed from: Barclays, Capital One, Alliance & Leicester, Halifax
"I was unemployed for about five months, and trying to set up my own company. Things were tight, but the first time Alliance & Leicester charged me I was only over my overdraft limit by three or four pounds. It just seemed to escalate; the next month I was £6 short, and it became a bigger and bigger problem. When it started, I was single, but now I have two young kids and I'm getting married next week, so it became more and more worrying. Last August I decided to make my own claim, after hearing on the news about a free website that gave out template letters. When we first claimed the charges back from Alliance& Leicester they shut down our bank account, and that really knocked us back, but they have since had to pay us £200 compensation."
Yvonne Hargreaves, 46, from South Yorkshire
Total reclaimed: £2,400 (with a further £7,500 pending)
Banks reclaimed from: Abbey National, MBNA
"My husband and I were both self-employed, and sometimes the money simply wasn't in the right place at the right time. It just got worse and worse over three years, so when I saw the media coverage I thought, 'what have I got to lose'? I had my first cheque from Abbey National in the post yesterday, and there's a further £7,500 they owe which is awaiting the end of the court case. I'm just so relieved."
Alistair McKay, 33, from Stirling, Scotland
Total reclaimed: £5,200
Banks reclaimed from: The Clydesdale Bank
"We got ourselves into greater and greater debt over six years, with the bank charges just mounting up. Often it was just silly things, like a direct debit coming out two days early. I was working as a head chef, but we just couldn't keep up with the charges. In the end we had to sell our house. When the money came through from the bank earlier this year, we were able to go on our first holiday in six years."
Some other links from the webpage too!
http://news.independent.co.uk/busine...cle2914378.ece
£2.6bn bank charges payback for 3.8m customers
Six months after The Independent began its campaign against unfair bank charges, the cost of the resulting repayments is revealed
By Martin Hickman, Consumer Affairs Correspondent
Published: 31 August 2007
Consumers challenging charges for overdrafts and bounced cheques have claimed back £2.6bn from Britain's financial institutions, according to figures that suggest the rebellion against the banks is taking place on a greater scale than imagined.
In a dramatic victory for The Independent's six-month assault on the charges, an estimated three million people have obtained a full or partial refund from their bank or building society.
The figures come from a YouGov poll which found that more than one third of customers had been charged fees since 2001. Refunds averaged £685. One in 20 bank customers had been billed more than £2,500. Applying the figures to the general population, the price comparison website uSwitch said its research showed that 3.8 million current account customers would have received refunds with a total of £2.6bn.
The British Bankers' Association disputed the figure but declined to give its own estimate of the cost of the revolt against its members.
Campaigners, the consumer group Which? and the Office of Fair Trade believe unauthorised borrowing fees of up to £38 a time are illegal because they exceed costs. But in a deal that has infuriated campaigners, the OFT is allowing banks to continue levying them while freezing compensation claims until a High Court test case in January.
From its polling of 4,000 customers, uSwitch said Lloyds was the most aggressive big high street bank, billing £800 over the six years, with a £30 fee for an overdraft. But it said Abbey was the most prolific, charging £1,376, or £230 a year.
As the campaign against charges has gathered pace, millions of forms challenging the banks and threatening them with legal action have been downloaded from the internet. Martin Lewis, whose moneysavingexpert.com has received more than three million downloads believes a further £500m to £1bn in refunds is currently frozen pending the OFT case.
If uSwitch is right, the banks have been paying out far more money to aggrieved customers than estimated by City analysts, who have hitherto underestimated the scale of the revolt.
The investment bank Credit Suisse suggested earlier this year that the revolt would knock £200m off the banks' interim profits. In fact, the five biggest groups HSBC, Barclays, RBS Group, HBOS and Lloyds paid out a total of £400m in the first six months of 2007. Given that those five have 65 per cent of the current accounts in the UK, the total level of refunds so far this year may be £550m.
Campaigners have hailed the amount being back paid as an example of people power. "There is a massive sense of empowerment. We get letters and emails saying: 'This is the first time I have stood up to an organisation'," said Marc Gander, of the Consumer Action Group.
"The strength of feeling is enormous. We are talking about people who have had their entire lives compromised; their families compromised and their businesses compromised, simply for fees that will turn out to be illegal."
Angela Knight, chief executive of the British Bankers' Association, said uSwitch's figures were "misleading, and to portray the industry in this way is totally wrong ... We are working with the statutory consumer protection authorities to bring about a legal and fair resolution of the debate over the fees we levy for unauthorised overdrafts."
The campaign against the fees began in earnest last year after a Plymouth law student, Stephen Hone, objected to two £32 charges levied by Abbey and looked up the law books. There, he found the 1999 Unfair Terms in Consumer Contracts Act, which allowed him to reclaim his charges and he sued the bank. Abbey paid £840 before the case reached court, sending shock waves through the financial system.
Opposition snowballed in February this year when The Independent put its campaign on the front page three times in a week. National television bulletins and other national newspapers took up the story and hundreds of thousands of claims flooded into the banks and the Financial Ombudsman Office, which at one stage was receiving 3,000 complaints a day.
Customers have successfully claimed fees running into tens of thousands of pounds. In many instances, the banks have settled straight away, but in others they have engaged in delaying tactics, obfuscation and retaliation by closing accounts. Two hundred people complained to the Information Commissioner that the banks were not detailing past charges in accordance with data protection rules.
Tracy North, of uSwitch, said the campaign against penalty fees had hit a peak, but warned that there were £731m of charges frozen pending the OFT case, saving financial providers £20m in interest alone.
"For the past six years, banks have been able to carry out this practice ... it's good so much money is now being refunded today. But there's a lot more to be refunded." A Which? spokeswoman, Helen Ainsworth, said: "The reason this campaign has struck such a chord with people is because they feel these charges are disproportionate and unfair considering the cost to the bank."
Banks are estimated to make between £1.2bn and £4.7bn a year from charges when their costs are put at no more than £2 to £4 a time, taking into factors such as offices and staff. In all but a few cases, financial institutions have paid out before they have reached court in what campaigners believe is an attempt to prevent the charges being ruled illegal. If they were declared illegal, banks might have to stop charging the fees, which are a useful source of revenue.
The Consumer Action Group and Moneysavingexpert.com have set up a £120,000 fund to establish a legal precedent.
People can claim back unauthorised borrowing fees on current accounts, credit card charges for late payment and mortgage exit fees. Only current account fees have been frozen, though some courts may still accept new cases.
Student pressure forces HSBC climbdown
A very modern revolution forced one of the country's most powerful institutions into a dramatic U-turn yesterday, when HSBC announced it was reversing plans to cancel interest-free accounts for graduates after a mass protest on the social networking site, Facebook.
The bank, Britain's fifth-largest, announced it was "not too big to listen to the needs of customers" and would be reinstating interest-free accounts as well as reimbursing any charges already taken.
The "Stop the Great HSBC Graduate Rip-Off" campaign began just over a month ago when the bank announced it would no longer be offering interest-free overdrafts to new graduates. It insisted it was a commercial decision in response to bad debts, misuse of the accounts and graduates who had no intention of building a long-term relationship with the bank.
Students across the nation aired their outrage on the phenomenally popular website, calling for a boycott of the bank. In the past couple of days, 1,000 people a day were signing up to the National Union of Students (NUS) protest.
Yesterday the bank said its primary concern had always been the burden of debt on students, a worry shared by the NUS, and it looked forward to working with the union to see how its accounts could benefit graduates. Andy Ripley, head of HSBC's product development, said: "Like any service- orientated business we are not too big to listen to the needs of our customers."
Yesterday the NUS welcomed the decision "following enormous pressure from thousands of students and graduates across the country".
Wes Streeting, NUS vice-president (education), said: "There can be no doubt that using Facebook made the world of difference to our campaign. By setting up a group on a site that is incredibly popular with students, it enabled us to contact our members during the summer vacation far more easily than would otherwise have been possible. It also meant that we could involve our former members the graduates who were going to be most affected by this policy.
"HSBC's decision to reverse this policy is a victory for this NUS campaign. The fact that this U-turn has been forced is a testament to the role of unity and communication in empowering students and encouraging fair deals."
People power: customers who got their own back
Nick Kinsella, 33, from Liverpool
Total reclaimed: £5,000
Banks reclaimed from: Halifax
"I was setting up my own company, supplying mineral feed to the horse and cattle industry. It takes a long time to build up a business, and with bank charges of up to £60 a time sometimes when I had only gone overdrawn by 1p it was even more difficult. I felt really angry they were taking money when I was already struggling so much. I'd recently divorced, and I couldn't afford the £80 journey to Swindon to visit my sons. Within a month of lodging the claim I had my money back, and was so relieved. It's daylight robbery what they did; they stole £5,000 of my hard-earned money."
Warren Chadwick, 44, from Halifax, west Yorkshire
Total reclaimed: £2,700
Banks reclaimed from: Halifax
"I'm disabled, and the bank were taking money from my income support because my direct debits were bouncing. Even if I was just a penny short on my bills the bank would charge me £38 to go into overdraft. If I had two charges in a week, that would be almost all my money for that week gone. When I finally got a loan to pay off my debts, Halifax took away all my cards. I was so angry with them they made everything so much harder."
Jolene Ferres, 28, from Cardiff
Total reclaimed: £500
Bank reclaimed from: NatWest
"I gave up my job as a duty manager at the airport at the same time as my husband slipped a disc and could no longer work as a taxi driver. I set up a sandwich shop and my account plummeted, and suddenly the charges started pouring in. I felt sickened, because I had no money, and every time the bank charged me £30 it made it worse. The mortgage was bouncing, as well as all the bills. I went into the bank but they couldn't do anything because the overdraft was maxed out. We were facing the loss of the house it was awful. When the money came through, it was amazing. I honestly thought I'd never get anything that easily."
Alan Rayward, 34, from Telford, Shropshire
Total reclaimed: £2,100
Banks reclaimed from: Barclays, Capital One, Alliance & Leicester, Halifax
"I was unemployed for about five months, and trying to set up my own company. Things were tight, but the first time Alliance & Leicester charged me I was only over my overdraft limit by three or four pounds. It just seemed to escalate; the next month I was £6 short, and it became a bigger and bigger problem. When it started, I was single, but now I have two young kids and I'm getting married next week, so it became more and more worrying. Last August I decided to make my own claim, after hearing on the news about a free website that gave out template letters. When we first claimed the charges back from Alliance& Leicester they shut down our bank account, and that really knocked us back, but they have since had to pay us £200 compensation."
Yvonne Hargreaves, 46, from South Yorkshire
Total reclaimed: £2,400 (with a further £7,500 pending)
Banks reclaimed from: Abbey National, MBNA
"My husband and I were both self-employed, and sometimes the money simply wasn't in the right place at the right time. It just got worse and worse over three years, so when I saw the media coverage I thought, 'what have I got to lose'? I had my first cheque from Abbey National in the post yesterday, and there's a further £7,500 they owe which is awaiting the end of the court case. I'm just so relieved."
Alistair McKay, 33, from Stirling, Scotland
Total reclaimed: £5,200
Banks reclaimed from: The Clydesdale Bank
"We got ourselves into greater and greater debt over six years, with the bank charges just mounting up. Often it was just silly things, like a direct debit coming out two days early. I was working as a head chef, but we just couldn't keep up with the charges. In the end we had to sell our house. When the money came through from the bank earlier this year, we were able to go on our first holiday in six years."
