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Bank Charges: The story so far....

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  • Bank Charges: The story so far....

    The story needs to have a context on the Bank Policy on bank charges and refunding them. The ethos since 2005 has been that the bank will refund on Bank Error or mistake being made but that people do not necessarily want a refund but an explanation of why they have gone overdrawn and incurred the charge and how to avoid them in future. That is part of the context of this story.
    The second element is Stephen Hone, who took Abbey to court and won £5000.00 in a story that gained a lot of media attention at the time. Stephen was a second year Law Student at the University of Plymouth. He set up Penalty Charges website and template letters were just starting to make a difference in early 2006.

    The impact of both was such that guidance was given to the branches as to how to deal with complaints that mentioned legal case law. The initial guidance was to record a complaint on the system and then call an internal number for a branch helpdesk. A templated letter would be sent in response, either offering a refund or declining one. If the customer later wrote again declining it and stating legal action then the complaint was transferred to Central Unit who would take forward the complaint. The branch would not know the outcome of the matter.

    There was various scenarios which covered if the account was closed. To begin with it was no refund whatsoever and then it was to refund only the previous year. The criteria seemed to change.
    If the account was open then first of all it was 12 months charges, and then it was redefined so that only card misuse and if the charge had caused the account to go overdrawn, or that the charge itself had been higher than the cost itself ie DD was £5 and the charge was £38 then that part of it would be refunded without interest. These solutions though did not stop the tide of letters coming to the branches and made the responses and the time on hold to speak to the branch helpdesk, unworkable.

    In December 2006, fresh guidance was given to the branches. You no longer deal with complaints, Customer Relations Unit deal with them. Any letter that mentioned unfair charges, OFT or case law was to be sent to Customer Relations Unit who seemed to simply refund all amounts minus interest once they had a copy of the statements or after having looked into the cases where there were charges. At one point the backlog caused in Customer Relations was 5 weeks. The process, at that department, was that the case was logged first of all onto a spreadsheet and a reference number given, then a letter was sent out with an offer. That process could take 6 weeks, and by that time some people had already filed at court. When the agreement from those who had waited came back it was logged and then processed.

    Internally, though, staff were unhappy that their job to a degree was being made worse by a dual refunds policy. The branch declined it and then the person wrote to Customer Relations and they refunded it. At internal meetings the question of Bank Charges came up time and time again and to such an extent that existing refunds policy changed. The initial £50 manager's limit was raised to £100 because one charge usually resulted in a second one which took it over the £50 limit and therefore required regional sanctioning. They were swamped to be honest.

    The news of the OFT test case could not have come at a better time for the bank. Internal disillusionment, which could be seen through staff opinion surveys at the end of 2006 which seemed to indicate a loss of faith in the way management was communicating. Working in a place where there is a dual refunds policy which would make anyone working for a bank frustrated.

    There would be one final policy that takes us up to now. There was a change of place as to where to send correspondence, from Customer Relations Unit to a Customer Response Unit. The refunds policy was made more robust, with refunds only being agreed under exceptional circumstances and bank error, otherwise the charges needed to be explained to the customer but a refund declined.
    Some view technology as a great evil that slowly diminishes our humanity, while others view it as a way to bring the world closer together and to help solve some of our greatest challenges.

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