Are UK banks ripping customers off?

Major UK bank logosHardly anyone that lives in the UK can be unaware of the battle that is currently being waged by consumers against banks, nor the hard line tactics many banks have resorted to in order to protect their "ill" gotten gains.
 
Last year it came to light that banks had been over charging consumers for a number of years whenever they went into their overdraft. While UK law allows a bank to levy a fine which relates to the amount the bank is owed, many banks abused this by charging fines that were hugely dispoportional. For example, customers who went overdrawn by 26p were fined £30, and then incurred further fines because this made them more overdrawn.
 
After a concerted campaign by consumer groups and media outlets, such as the BBC and The Sun, the number of customers complaining and receiving refunds sky rocketed, with some people getting thousands of pounds back.
 
As one can imagine this didn't sit too well with the suits at the top levels of the banks, and so came the instructions to get tough on these "unruly" customers. A number of customers received letters informing them that they would have their accounts terminated if they pursued this course of action, and indeed a number of customer accounts were forcibly closed.
 
One thing that this case has highlighted is that large insitutions are free to break the law as they please and that the FSA is unable or unwilling to keep them in line, which is not strange when you realise that the vast majority of senior FSA persons used to work for the banks.
 
One thing is for sure, if this continues, UK consumer confidence in the banks will continue to drop, and in a time when the banks are keen to squeeze as much additional business out of existing customer bases, they could be in for a lot of trouble.

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