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Million customers claiming bank charges
Wednesday, 08 Apr 2009 09:56
Nearly one million bank customers have had their claims for a refund on their bank charges frozen as the case is dragged out through the courts.
According to figures from the Financial Services Authority (FSA), 973,000 complaints have been put on hold by UK banks, while 27,000 have been stayed in the courts.
The data was obtained under the Freedom of Information Act by consumer group Leagle Beagles.
Julian Siddle, of Legal Beagles, said: "The figures are just the tip of the iceberg. There are 12.6 million accounts that have incurred bank charges. So potentially there are another 11 million who are yet to claim."
Bank customers who found themselves charged high fees for going into their unauthorised overdraft – sometimes for a matter of pennies – have been attempting to claim back the charges through the courts.
But as claims started to stack up, in 2007 the industry and the Office of Fair Trading (OFT) attempted to find a solution.
The OFT is now fighting the banks through the courts for the right to decide whether the charges are unfair.
While the case is ongoing, the FSA has frozen claims, although customers have continue to lodge their complaints, leading to a huge backlog.
If the OFT wins in the House of Lords, which may not happen until next year, banks may be forced to pay back the charges.
According to Legal Beagles, who help customers who are struggling with debt to reclaim their money quickly, some consumers are owed thousands of pounds and are in danger of losing their homes.
But if a customer is in real hardship, they can have their case considered by the bank immediately and could get their money back in around eight weeks.
There are concerns that if the banks are forced to repay the charges, the cost will end free banking in the UK.
"It will run into the billions," Mr Siddle admitted, "but they have had funds set aside for at least a year."
The cost of refunding these charges are a "drop in the ocean" for the banks, Mr Siddle added.
Million customers claiming bank charges
Wednesday, 08 Apr 2009 09:56
Nearly one million bank customers have had their claims for a refund on their bank charges frozen as the case is dragged out through the courts.
According to figures from the Financial Services Authority (FSA), 973,000 complaints have been put on hold by UK banks, while 27,000 have been stayed in the courts.
The data was obtained under the Freedom of Information Act by consumer group Leagle Beagles.
Julian Siddle, of Legal Beagles, said: "The figures are just the tip of the iceberg. There are 12.6 million accounts that have incurred bank charges. So potentially there are another 11 million who are yet to claim."
Bank customers who found themselves charged high fees for going into their unauthorised overdraft – sometimes for a matter of pennies – have been attempting to claim back the charges through the courts.
But as claims started to stack up, in 2007 the industry and the Office of Fair Trading (OFT) attempted to find a solution.
The OFT is now fighting the banks through the courts for the right to decide whether the charges are unfair.
While the case is ongoing, the FSA has frozen claims, although customers have continue to lodge their complaints, leading to a huge backlog.
If the OFT wins in the House of Lords, which may not happen until next year, banks may be forced to pay back the charges.
According to Legal Beagles, who help customers who are struggling with debt to reclaim their money quickly, some consumers are owed thousands of pounds and are in danger of losing their homes.
But if a customer is in real hardship, they can have their case considered by the bank immediately and could get their money back in around eight weeks.
There are concerns that if the banks are forced to repay the charges, the cost will end free banking in the UK.
"It will run into the billions," Mr Siddle admitted, "but they have had funds set aside for at least a year."
The cost of refunding these charges are a "drop in the ocean" for the banks, Mr Siddle added.
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