Banks stalling on reclaimed bank charges

| October 31, 2007 | 0 Comments

To date, High Street banks have paid approximately £1 billion in reclaimed bank charges, however, evidence is suggesting that they are using delaying tactics to avoid paying out funds, even when they have been ordered by the courts to do so.

Consequently, thousands of customers who think they have won their court case may never actually see their money. Apparently, banks are stalling on payments worth thousands of pounds.

According to the Consumer Action Group, banks are delaying the payment of compensation for weeks or even months and are also asking district judges to suspend cases, where they have been found in default and the customer believes they have won, to await the result of the High Court case brought by the Office of Fair Trading against eight High Street banks in early 2008.

The Financial Services Authority (FSA) has allowed banks to postpone payments to customers that have requested compensation directly from their bank until the results of the OFT case are known. However, this does not extend to county court judgements as these are assessed on an individual basis.

According to Karl Williams, head of the Debt Recovery Unit at Manchester law firm Pannone and Partners, banks are within their right to request this deferral.

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