FOS cracks down on retaliation from banks
In the latest moves against consumers that are attempting to claim back unfair and unlawful overdraft charges, banks have resorted to a range of measures, such as delaying sending out documentation, and worse still, informing consumers that do take action that their accounts will be closed down as a result of their actions. The latter course of action, which has been threatened and in some cases followed through, by some banks has caused outrage amongst consumers in the UK and concern amongst financial regulators, as it means that consumers are not being given the chance to make a perfectly legitimate complaint without being penalized by some banks.
The Alliance and Leicester has been involved in one of the recent crackdowns on this type of behaviour, and has been reprimanded by the Financial Ombudsman Service for the closure of an account belonging to a customer that made a complaint and tried to reclaim unfair banks charges that had been applied to her account in the past. The charges were applied because the customer accidentally went over the overdraft limit, and like other banks the Alliance and Leicester applied hefty fees to the account despite the fact that the cost to the bank is actually very low.
The Alliance and Leicester is one in a long line of banks that have threatened customers that dare to complain and try to reclaim bank charges. The banks have been stating that the account closures are carried down due to the action resulting in a breakdown in relationship between the consumer and the bank. However, most consumers see this action as petty retaliation from banks that are angry about consumers exercising their rights to reclaim fees and cannot justify why such high fees are charged.
One spokesperson from the FOS stated: 'What we are seeing with complaints like this is a breakdown in the bank's relationship with the customer over a long period. Often the reclaiming of bank charges will be the final straw. However, where an account closure is seen as a retaliation for a customer recovering their bank charges as a one-off, then we will rule in favour of the customer.'
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