Lloyds TSB overcharging by £300 million

| July 31, 2007 | 0 Comments

Lloyds TSB has allegedly been overcharging customers £300 million a year and is reported to be instructing staff to reject first-time claims, even if they are genuine.

The bank has been portrayed as cynical in press reports about some of the techniques it has used to avoid refunding unfair bank charges to its customers.

Details that have been revealed to the press also include instructions to offer a maximum settlement of £750, not to refund interest and to offer no immediate settlement to customers who are terminally ill and dying.

Lloyds TSB, like many leading banks, has been swamped with claims for fees made for unauthorised overdrafts. It has set up a Recovery Centre to handle the problems and brought in additional customer care staff.

UK banks and building societies make approximately £1.7 billion a year from levying charges of nearly £40 for unauthorised overdrafts and bounced cheques.

A bounced cheque costs the bank around £2.50 and the test case now being brought in the High Court by the Office of Fair Trading will establish whether the banks can add a penalty element to their charges, over and above the actual administrative cost.

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