Published on 01-12-2011 06:21 PM
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Outrage at the Coalition’s failed ‘clampdown’ on unfair bank charges.
(Each party has made an offical response to this article see the full story)
On the 21st November, the Department for Business, Innovation and Skills (BIS) and HM Treasury published their response to the consumer credit elements of the Government’s Review of Consumer Credit and Personal Insolvency. They Claim that the Government has driven forward a voluntary agreement which will apply to all full-facility current accounts offered by the major banks, when they state:
“Under the new agreement, over 85 per cent of personal current account customers will benefit from measures to make charges for unarranged overdrafts clearer, fairer and more manageable. This includes annual statements so that customers can see how much their account costs over the year. Consumers will have the option to receive alerts when their balance is low so that they can take action to avoid a charge; and they will no longer be charged for going-over their limit by a small amount”.
They claim that this response builds on a number of Coalition commitments to increase transparency and help consumers make better financial decisions when borrowing money. Whilst this press release is good news on face value, the truth is that this does not build on the Coalition commitments at all. The Coalition gave an undertaking in their program for Government that it would bring in legislation to end unfair bank charges, it said:
“We will introduce stronger consumer protections, including measures to end (my emphasis added) unfair bank and financial transaction charges.” (Sec 5):
The truth is, it has failed to deliver. The Coalition government and the OFT has let down the thousands of consumers(including many on benefits) who have for years been ripped off by banks and are still forced to live below the poverty line because of unlawful bank charges. Whilst we accept that the idea of a text message will help some consumers, the truth is it will not help the thousands on low incomes that cannot simply top up their accounts. All it will do for them is give them notice that they are about too ripped off again, it will not stop the spiral of debt these charges can and do cause.