Nick Clegg speaks out against bank charges

The saga of bank charges continues… This week in a letter to MSE (moneysavingexpert.com) the Liberal Democrat leader Nick Clegg and his shadow chancellor Vince Cable committed their party to proposing a motion to have bank charge of £35 removed and made illegal. MSE have been campaigning against bank charges for over 3.5 years and over 8.5m bank charge reclaim forms have been downloaded from the site since the campaign started. At the moment banks are allowed to charge in the region of £35 every time someone goes over their overdraft limit, the banks claim that this fee is for administration costs. In his letter to MSE, Nick Clegg described the bank charges as scandalous and disgraceful, the Lib Dem leader pledged to table a motion in parliament this autumn which will see bank charges refunded automatically as soon as the landmark case has finished its procession through the House of Lords. The banks have already lost appeals in the High Court and the Court of Appeals, and the Lords are due to announce a judgement in the autumn regarding the case.

The Liberal leader appears to have once again jumped into the vanguard when it comes to matters of civil liberties. The original post by MSE was addressed to David Cameron, in their letter to the Tory leader Martin Lewis criticised the party for not taking action sooner and for jumping on the bandwagon. Martin Lewis finished his letter to Mr Cameron with an impassioned plea he writes “So surely once it’s finally legally decide they’re unfair the only right decision is for everyone who’s had bank charges to automatically be paid back the money without needing to ask for it? Yes, it will cost. Perhaps £3 billion to £5 billion, but this is about justice, and with the nation’s finances in such a dire state, what better way to immediately stimulate the economy than putting this money back into real people’s hands.”

Even if the Lib Dem motion is dismissed in parliament, it’s most likely that Lords will rule in favour of consumers and allows account holders to reclaim unlawful charges. The first step in this process is to acquire 7 years worth of statements from your savings and current accounts, once you have obtained these you need to check through them and mark all the charges you have received by going over your overdraft limit. The next step is to find a new bank and switch current account, as banks in the past have frozen accounts during legal proceedings. Once you’ve set yourself up with a new current and savings account you will be free to contact the bank and ask for a refund of these charges, these requests are often turned down which forces consumers to threaten legal action in the small claims court. Of course this whole process will probably become null in void after the Lords finish their deliberation, but it’s worth taking the first two steps anyway just in case.