| If you've been keeping an eye on the media over the | | | | simply by asking for them back. As these repayments |
| last few months, especially the parts of it covering | | | | have sometimes run into four figures or more, and the |
| personal finance, you can't fail to have noticed the | | | | banks concerned agreed to the refunds without |
| huge row over bank charges. Stories abound of | | | | recourse to legal action, the implication could well be |
| customers reclaiming thousands in backdated fees | | | | that even the banks are unsure what the true legality |
| from their banks, and with consumer groups, activists, | | | | of the situation is. |
| and government regulators squaring up towards | | | | Thankfully, the matter should soon be clarified with the |
| seemingly intransigent banks, the stage is set for a | | | | instigation of a test case to decide whether the |
| battle that could affect the financial future of everyone | | | | charges are fair, or punitive and illegal. There is now an |
| who makes use of financial services. But what is the | | | | embargo imposed by most banks on refunding |
| hoo-haa all about? | | | | disputed charges, pending the outcome of the case. If |
| The basic accusation laid against the banking industry | | | | the banks lose, the floodgates could open, and the |
| is that the various charges levied on customers who | | | | costs could run into millions. |
| go overdrawn, miss repayments, or commit other | | | | Would this be a good thing for customers? |
| misdemeanours are excessive. Under the financial | | | | Well, should the banks be faced with multi-million pound |
| services industry regulations laid down by government, | | | | refunds because the decision goes against them, the |
| any such charges must only be of sufficient size to | | | | money will have to be found from somewhere. And |
| cover the administrative costs the banks incur by | | | | that's without considering the further millions of pounds |
| dealing with miscreant customers. Many outside the | | | | of income the banks will lose if charges are drastically |
| banking industry think that this isn't what's happening, | | | | reduced. Already, there are monthly or annual fees |
| and that banks are inflating their charges to punitive | | | | being introduced for current accounts, credit cards, and |
| levels, and using them as profit makers - both of which | | | | other financial services - irrespective of whether the |
| are illegal under current laws. | | | | customer goes overdrawn or otherwise breaks the |
| Naturally, the banks dispute such accusations, although | | | | terms of their agreement. |
| when the row first blew up in the arena of credit card | | | | Make no mistake: the banking industry won't allow |
| late payment charges, and the regulators insisted that | | | | defeat to erode their profits, and the lost revenue will |
| these charges be slashed, all banks promptly agreed | | | | be reclaimed from somewhere else. It may well be |
| to do so. | | | | that mainstream banking customers will have to pay a |
| Further, in many cases, bank customers have been | | | | fee to subsidise lower charges for those who bank |
| able to reclaim past charges for going overdrawn, | | | | less responsibly. |