Banks paying £200m in repaid charges
Account holders have been triumphant in recovering thousands of pounds in penalty charges that have been believed unfair under consumer contract law because they do not reflect the costs incurred by the account provider. A study by Credit Suisse has estimated that UK banks repaid £200 million during the first 6 months of 2007.
Many banks were charging approximately £35 without permission when a customer went into the red, the actual cost to the bank would be between £2 and £5.
As yet, banks have not revealed how much they have repaid but figures expected in July should divulge the amount.
In early 2007, approximately 500 claims per day were arriving at some banks and to deal with the situation, extra staff had to be employed.
HBOS, which incorporates Halifax and Bank of Scotland, have already admitted that the repayments will have an impact on profit. HBOS is dealing with the matter by separating the costs incurred from its earnings and according to Credit Suisse, reclaimed charges could cost the group £50m.