High Bank Charges _ Lords Appeal Starts

High Bank Charges - Lords Appeal Starts

A final appeal at the House of Lords starts today as the UK leading banks begin their fight to stop the Office of Fair Trading having the power to decide whether a Bank’s charges are fair or not.

The Appeal Court ruled last year that the OFT should have this power, therefore putting at risk, billions in revenue for banks.

Many banks make substantially higher charges than others when people exceed their overdraft facility or write a cheque that ‘bounces’ due to insufficient funds.

We appreciate that consumers should have a level of protection.  However, we also respect that banks should charge for people abusing their position.  People writing unauthorised cheques or not paying in enough to cover spending, creates excessive amounts of work for banks when a problem occurs.  Banking staff must to be paid to review ‘bad’ accounts so a reasonable charge should be made to cover their wages.  We suggest though the charges should not be a profit centre and charges should merely match costs.

We suggest in an open and free market economy, a bank should be allowed to charge whatever it feels is relevant for the work created.  Consumers can then make their own commercial decision as to whether to remain with that bank or move to another bank.

We do hope the House of Lords take a pragmatic view here.  It is a fine balance between consumer protection, which is needed to a certain extent, and free market economies.  

If the Lords to rule in favour of the OFT, we also suggest it will backfire on the consumer and we will return to the old ways, and indeed still the traditional ways in Europe, of 'paid for' banking.  Free banking, as we know it will disappear.

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