Banks performing 'biggest robbery in Britain'

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Post by IVA News » Tue Jan 16, 2007 6:28 pm
Banks are "mugging" their own customers by levying illegal penalty charges, a senior Liberal Democrat MP has said.

Speaking in a debate in parliament's Westminster Hall, Matthew Taylor said it was time for action to reduce the level of penalties that can be applied by banks.

Responding to the comments, Treasury minister Ed Balls said an ongoing review if the issue by the Office of Fair Trading was being taken seriously.

But he stopped short of promising government action, saying that the OFT review should go ahead as planned.

Taylor, the Lib Dem social exclusion spokesman, highlighted the cases of constituents who have been hit by "not just one charge but numerous charges".

This could leave people struggling to pay hundreds and "even thousands of pounds of bank penalty charges".

He said that low income families such as single parents and those on benefits are most at risk.

Taylor said it was: "Profit at the expense of these hard-up customers".

"It is the biggest bank robbery in Britain and it involves the banks robbing their own customers, especially their poorest customers."

He said that such punitive charges are illegal under common law.

And the banks would lose a test case and "forfeit this multi-billion pound source of illegal profit forever" if they were challenged in the courts.

Taylor said the banks decline to fight any such cases, preventing a definitive ruling on whether the charges are illegal.

"Every time court action is threatened, the banks refuse to defend themselves. The only possible reason has been that they know they will lose," he added.

Banks are "mugging their customers and the OFT and the government are letting them get away with it".

Concluding his speech, Taylor added: "These penalty charges are crippling people on very low income.

"I believe they are clearly illegal and if there was any doubt about it the banks would have the courage to fight a single case in the courts - which they do not.

"Meanwhile, frankly the OFT has been limp, the banks are dodging the courts and the government is turning a blind eye."

For the government, Balls said it was important to highlight and discuss the issue in order to raise awareness.

The economic secretary cautioned that people could also be "ripped off" outside the mainstream banking sector by loan sharks.

And people without accounts would lose out on discounts for utility bills paid by direct debit, he noted.

On the OFT inquiry, Balls said it was not for ministers to "set the pace".

But he said it was "very serious and certainly being taken seriously by the banks".

Balls said he would not "second guess" the OFT, but he backed the need for "transparency and fairness" as a general principle.

And he said the government refunds any penalty charges imposed as a result of late payments of benefits where the Department for Work and Pensions is at fault.

Source: ePolitix

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