Customers funding free banking in the UK
According to the owner of an organization that helps consumers to reclaim unfair bank charges, many UK consumers feel that the free banking system in place in the UK is a very unfair one, and that those being charged extortionate fees for going over their overdraft limit or found returned cheques and direct debits are actually funding free banking for other customers through having to make hefty payments. Research was carried out by the organization Reclaim Bank Charges, and showed that over three quarters of UK consumers thought that the banking system was unfair.
Bank charges such as those outlines above have come under intense scrutiny and investigation by financial regulators over recent months, and because banks have been unable to justify why they charge so much for something that costs them just a few pounds in administrative costs many consumers have already been able to claim back charges going back up to six years. Reclaim Bank Charges was set up by Filipe McManus after he managed to reclaim his charges and discovered that many people were in his situation but did not have the time to reclaim their own.
According to the research, most consumers in the UK would be far happier to see a banking system that charged a small monthly fee for a current account and dramatically reduced the amount on charges such as these. Financial regulators are due to make a decision this year with regards to what can be deemed as a fair charge in circumstances like these, and banks will then have to review their charged accordingly.
According to Filipe McManus: "Basically the way the charges work at the moment customers are paying not just for when they go overdrawn but so that other people can have free banking. They have propped up the whole system."
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