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Vengeful Banks forced to pay up.


sharmal
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The folllowing was written by Sean Poulter, Consumer Affairs Correspondent to the Daily Mail. I believe last week. I found it when I was throwing papers away at work.

 

Banks which close the accounts of complaining customers are being ordered to pay compensation of at least £200 a time.

The details emerged yesterday as a City watchdog made clear it will not let banks intimidate customers who have legitimate grievences.

 

More than a million people are believed to have claimed refunds after the Office of Fair Trading said the charges were unfair and illegal.

 

The Daily Mail revealed last week that many of the biggest banks - including HSBC, Nationwide, Alliance and Leicester and Nat West are taking revenge by closing accounts at short notice.

 

Now the Financial Ombudsman Service has published a landmark ruling against such revenge moves. It has indicated that customers will be entitled to compensation for the inconvenience of having to open a new account.

A test cse published by the FOS website involves a £200 compensation award to a customer whose acount was closed at 30 days notice after he won a refund £105.

Another 50 such cases are going through the FOS system - they are just the tiop of the ice-burg. The watchdog has received more than 5,000 complaints since the Mail raised the issue. The FOS reported a first wave of complaints from people chasing penalty refunds and there is now a second wave over account closures. An FOS spokesman said "Comsumers should not be penalised for exercising their right to complain. We are stablishing a principle that if a bank close an account as an act of retaliation that is not fair.

 

In a seperate move the FSA is launching a wider investigation into the way banks and building societies deal with customers who complain.

 

The banks insist that they are perfectly entitled to close the accounts when customers claim a refund. They say that the claims are evidence of a breakdown in relations which makes it impossible for them to carry on offering an account.

Penalty charges have been a significant factor in delivering unprecedented profits - totalling more than £40 billion for 2006 for the nine biggest banks.

Halifax - Bank of Scotland yesterday became the latest to unveil record profits - a 14% rise taking the figure to £5.54billion.

 

Apologies if this has already been posted.

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Guest NATTIE

NatWest do not close accounts as retaliation for claiming charges. Daily Mail, nice:D

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