Unfair bank charges to be banned under new government proposals
New policies to give consumers "stronger protection"
By Elliot Wright, 20th May 2010
The coalition government is set to put an end to 'unfair' bank charges as part of a promise to strengthen consumer protection.
In what would be a massive boost for consumers still ruing the Office of Fair Trading's defeat in the bank charges test case to the major High Street banks, the government has proposed to "end unfair bank and financial transaction charges".
For years, banks have been levying charges, which have widely been described as disproportional and unfair, on customers who exceed their authorised overdrafts.
It is thought that financial institutions have taken over £2bn in bank charges from consumers, as well as millions more in over-the-limit and late payment charges on credit cards.
Brad Askew, managing director of claims management firm Claims Financial said: "It is fantastic news that the government has recognised the need for stronger consumer protection from unscrupulous and greedy banks.
"However, millions of people have already been charged billions of pounds over the last few years and there is no word on whether they will ever be refunded or not. If the government thinks bank charges are indeed "unfair", I hope they see sense and order the banks to offer some kind of redress to customers already affected."
The government's programme also includes proposals to increase transparency with credit cards, store cards and energy bills.
A free national financial advice service will also be established, as well as measures to protect homeowners against "aggressive bailiffs".
Ann Robinson of comparison site Uswitch.com said: "the government is finally giving consumers the level playing field they have so desperately needed.
"The outline they've given today signals a serious determination to give consumers the tools and the information they will need to be able to act like consumers and to get the best deals, products and prices for themselves."