Unfair bank charges, the latest bully tactic

[Grumpmeister]

Let me get this straight, you are telling your customers that they can either accept youa re going to charge them and that they cannot raclaim any unfair charges you make or you will close down their accounts? Surely this is a really stupid idea, even if the FSA doesnt hammer you over this I can see your customer base vanishing.

LONDON (Reuters) - A building society is threatening to close down customers' accounts in the latest move designed to stop people reclaiming bank charges.

Norwich and Peterborough Building Society is giving customers trying to reclaim what they regard as unfair bank charges two options -- agree to be hit with future fees or have their account shut.

It is the 14th largest building society in the UK, with 400,000 customers.


Claims management firm Conkers.co.uk -- which has so far dealt with tens of thousands of bank charge claims -- said it was the most "outrageous" way to date of "a financial institution abusing its customers' rights".

Corporate relations director Ian Allison said that while there had been threats of account closure in the past, this was the first time it had seen a bank or building society "bold enough" to put it in writing -- and make it part of the terms and conditions of accepting the compensation offer.

In one such letter obtained by Reuters, Norwich and Peterborough's banking and investment support manager Elaine Linnell said: "If (the customer) is unable to accept all account conditions, including the charging structure, it is likely that continuation of the relationship would be fraught with further arguments and complications.

"In these circumstances, it would be best for both parties to accept that the relationship has broken down and to change (the customer's) banking arrangements to another provider."

Andrew Clare, head of banking at Norwich and Peterborough, told Reuters that other customers had received similar letters, but defended the firm's charges as "clear, lawful and fair".

"We have a right to choose who we do business with and we only wish to do so where there is a good faith relationship," he said.

"It is not in the interests of either party, or indeed of the society's members -- the great majority of whom accept and abide by the terms and conditions of the accounts they hold -- for us to have a relationship fraught with arguments and complications."

It is the latest development in the financial services industry's battle against customers reclaiming charges, which the Office of Fair Trading is investigating.


The Royal Bank of Scotland has been writing to customers who have already reclaimed charges saying they will downgrade their banking services if they make similar claims in future.

And the Co-operative Bank has said that in a "very small number" of cases, further refunds will only be given in the event of a bank error.

Allison said such moves were a "deliberate attempt by the banks to railroad customers down the route of accepting future charges -- no matter how unreasonable or excessive they may be".

Thousands of banking customers have been able to reclaim up to six years' worth of bank charges and interest after Abbey customer Stephen Hone successfully reclaimed charges in an out-of-court settlement

Around 10 million people have yet to reclaim around 2.12 billion pounds, according to YouGov research.

Around 30 specialist claim management firms have been set up amidst the bank charges row.

These firms cream off up to 40 percent of the amount recovered. Conkers.co.uk takes a 25 percent-plus-VAT cut of any successful claim.

Consumers can make a claim by themselves. Which? advises people to first complain to their bank, then take their case to the Financial Ombudsman Service if they do not receive a satisfactory response.

[Snoopy]

I have banked with N&P for years ..... No problems, efficient, quick and helpful. They also pay interest on credit balances on my current account. What charges they levy (not if you are in credit) are fully explained and are fair and reasonable. They are a mutual building society (one of the few left) and any decision such as this has the support of the majority of their members or they could not do it.

The problem is give some people a stick and they start beating everyone with it. The only reason this company is bleating is that N&P have told them to p*ss off and thus stopped them from earning huge fees for "reclaiming" charges levied on those too thick to read the Ts & Cs they agreed to when they opened their accounts.

If you don't like your bank then move your account. 

[Grumpmeister]

Fair enough but it just seems like a ridiculous business tactic given all the negative press lately concerning bank charges. Accept our charges or bugger off strikes me as business suicide.

[Snoopy]

Fair enough but it just seems like a ridiculous business tactic given all the negative press lately concerning bank charges. Accept our charges or bugger off strikes me as business suicide.

All the more shares for me when they demutualise.