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Daily Mail - Banks 'play dirty' in row over unfair penalty fees
Banks are using "underhand" tactics to deter customers who challenge them on overdraft charges, a report has claimed.
The consumer group Which? says it has uncovered evidence of a host of dirty tricks employed to stop account-holders pursuing their case.
These include banks threatening to close accounts, passing details on to debt collectors and delaying and charging for statements needed to make a claim.
The Office of Fair Trading is preparing to outlaw excessive fees.
Daily Mail - Banks face mass revolt as customers sue over 'illegal' charges
Tens of thousands of bank customers are preparing to sue the high street giants for the return of millions of pounds in "illegal" penalty charges.
The customers claim that penalty charges of up to £35 for slipping a few pence over an overdraft limit and £39 for a bounced cheque are in flagrant breach of the law.
Under consumer legislation passed seven years ago they are not allowed to charge "disproportionately" high sums and can only cover their costs.
This is Money - Bank charge complaints soar
Complaints about 'rip-off' bank overdraft charges have hit record levels, figures show.
The number of people complaining to the Financial Ombudsman Service soared from 60 a week in May to more than 150 a week in October.
In some cases, customers have run up hundreds of pounds in charges after going just a few pence overdrawn.
With complaints expected to hit 10,000 this year, the chief ombudsman has warned banks to start acting fairly when handling claims for compensation.
He accuses banks of giving customers the run-around by paying back the charges only to those who are prepared to go to court or make a complaint to the ombudsman. And he threatened to make a legal ruling that will force banks to pay back all charges.
Instead, he wants banks to accept that their charges are unfair and refund them when customers complain, rather than resorting to delaying tactics and bargaining over how much they should refund.
Banks will charge customers as much as £39 for going beyond their overdraft without permission, and slap on a further charge of around £25 for every direct debit or transaction that is then bounced or allowed to go through.
On top of this, the banks will charge an interest rate of close to 30pc on unauthorised overdrafts. The charges can often send the customer overdrawn again, plunging them into a spiral of debt.
These charges are feeding record profits of a combined £34bn at the big five banks - Barclays, HSBC, Lloyds TSB, RBS-NatWest and HBOS.
Many, including the Office of Fair Trading which has launched an investigation, believe that these charges are illegal because they amount to an unfair penalty rather than being a true reflection of the cost to a bank when a customer overspends.
The OFT is expected to make an initial decision early next year. In October it demanded that banks impose a £12 cap on charges for customers who go over their credit card limit or make a late payment.
Daily Mail - Crackdown on banks overdraft charges
A crackdown on punishing big bank overdraft charges, which cost the public a staggering £4.6 billion a year, has been signalled.
The Office of Fair Trading (OFT) has launched an inquiry into rip-off charges of up to £39 a time for busting an overdraft limit or bouncing cheques and direct debits.
Currently, someone can be hit with charges of more than £100 for going just £5 overdrawn and bouncing two payments.
The OFT move is likely to lead to a dramatic cut in the charges - slashing them by as much as half - saving consumers billions of pounds a year.
