History of Bank Charges

• Home
• Mortgages
• Credit Cards
• Banking
• Pensions
• Investments
• Loans
• Insurance

History of Bank Charges

Banks have long been accused of ripping off customers, or in effect fining their customers, with the high and unlawful charges they impose for minor account problems.

The Unfair Terms in Consumer Contract Regulations state that any charges enforced by banks should be in direct proportion to the true cost they incur as a result of unauthorised overdrafts, failed direct debits or bounced cheques, and should not exceed the cost to the provider.

However, some banks continue to impose penalty charges of around £30 without permission for simply sending an automated letter notifying customers that they have exceeded their overdraft, even if by a single pound.

The actual administrative cost for this has been calculated as between £2.50 and £4.00, which highlights just how much banks profit from these charges.

As a result, complaints against banks have soared in recent years, according to the Banking Code Standards Board, and more people have decided to take action by claiming back money which is rightfully theirs.