retailworld
27-02-2007, 10:34
Ten times as many people as last year are contacting the Financial Ombudsman to complain about penalty charges imposed by their banks. Each day, as many as 1,000 people are contacting the organisation to complain and seek advice.
Since the Office of Fair Trading (OFT) said credit card and overdraft default charges should only reflect company costs, banks have been defending their rights to charge for this service, noting that, in some European countries, it is actually illegal to overspend without the bank’s consent.
With consumer groups claiming that penalty charges are unlawful and should be refunded, the number of consumers seeking a refund of their penalty charges continues to gather pace.
In most cases, banks have agreed to settle the disputes themselves, by waiving all the fees and charges over the relevant period, as a goodwill gesture. In some cases, refunds have been backdated by up to six years. This is largely due to the fact banks are keen to avoid the time and costs associated with a full ombudsman investigation, according to the Financial Ombudsman.
Despite the widespread success of claiming back such charges, it is important to remember that banks are under no obligation to settle disputes with customers as goodwill gestures.
To read Business Links top tips on business banking, click here (http://blsy.creativemessage.com/Assets/Files/26%20Feb%2007/Toptipsonbusinessbanking.pdf) (PDF File).
[Source: Business Link 27th February 2007]
Since the Office of Fair Trading (OFT) said credit card and overdraft default charges should only reflect company costs, banks have been defending their rights to charge for this service, noting that, in some European countries, it is actually illegal to overspend without the bank’s consent.
With consumer groups claiming that penalty charges are unlawful and should be refunded, the number of consumers seeking a refund of their penalty charges continues to gather pace.
In most cases, banks have agreed to settle the disputes themselves, by waiving all the fees and charges over the relevant period, as a goodwill gesture. In some cases, refunds have been backdated by up to six years. This is largely due to the fact banks are keen to avoid the time and costs associated with a full ombudsman investigation, according to the Financial Ombudsman.
Despite the widespread success of claiming back such charges, it is important to remember that banks are under no obligation to settle disputes with customers as goodwill gestures.
To read Business Links top tips on business banking, click here (http://blsy.creativemessage.com/Assets/Files/26%20Feb%2007/Toptipsonbusinessbanking.pdf) (PDF File).
[Source: Business Link 27th February 2007]