Lloyds TSB in spotlight on overcharging
by Gill Montia
Story link: Lloyds TSB in spotlight on overcharging
Lloyds TSB has been described as cynical in press reports about some of the methods it has used to avoid refunding unreasonable bank charges to its customers.
The bank, which is alleged to be overcharging customers £300m a year, is reported to have told staff to reject first-time claims, even if they are legitimate.
Details of the guidelines that have been leaked to the press also include instructions to offer a maximum settlement of £750, not to refund interest and to offer no immediate settlement to customers who are terminally ill and dying.
Like many leading banks, Lloyds TSB has been inundated with claims for fees made for unauthorised overdrafts. It has set up a Recovery Centre to deal with the problem and employed additional customer care staff.
The bank is alleged to have instructed new staff to fob off the most persistent complainants with a settlement offer of £750, when in fact an overcharged customer could take that offer and still pursue the bank for a higher amount.
It is estimated that UK banks and building societies make £1.7bn a year from levying charges of up to £39 for unauthorised overdrafts and bounced cheques.
The cost to a bank of a bounced cheque is around £2.50 and the test case now being brought in the High Court by the Office of Fair Trading will establish whether the banks can add a penalty element to their charges, over and above the actual administrative cost.
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