OFT savage banks over charges. Hang on, no it doesn't.

uk-money.jpg When the Office of Fair Trading geared up to present a report on banks and their approach to customers who exceed their overdraft limits, no one expected a daring, robust piece of literature, damning the banks and threatening to take the strongest possible action.

Just as well, because that wasn’t what they got. Instead, the OFT fluffed on about nothing in particular, apart for some stuff about the banks giving customers the option not to be able to exceed their overdraft limit at all, and therefore incur no charges.

Sounds interesting, until you realise that the banks were mournfully warning that anyone who DID exceed the limit that couldn’t be exceeded could find that it impacts on their credit rating. Oh, so that’s not really an improvement at all.

HSBC have already announced a new account that operates along these lines – the HSBC Bank Account Pay Monthly “features a strict overdraft limit that cannot be exceeded unless the bank has formally agreed a higher limit beforehand.” Yours for a monthly fee of only £15.

The OFT parped on about the fact that the banks had been doing their bit in bringing down the level of charges from obscene to just deeply unpleasant, with charges for a bounced cheque or other payment dropping from £34 to an average of £17.

Marc Gander of the Consumer Action Group said the OFT had "nothing to cheer about or to congratulate itself about,” adding, “Despite its powers and its influence, the OFT has achieved very little.”

"It has been defeated on the test case charges issue because it allowed itself to be corralled into dealing with a very narrow point of law and despite a very clear signal from the Supreme Court that there were another more realistic routes to make a challenge on behalf of bank customers, it has declined to do so."

But if you still think that the OFT are just a toothless, meandering bunch of old duffers, wait until you read this. They’ll be keeping a careful eye on the banks over the next two years and if customers are still getting a raw deal by THEN, they’ll definitely consider doing something about it.

Keep on believing!

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