The Bank charges decision is simple common sense

It seems that the High Court has ruled that Bank charges for ‘unauthorised’ borrowing are unjustified and excessive.  It’s a no-brainer.  Which is fortunate indeed when you consider the standard of the judiciary in most David against Goliath cases.   A charge of between £25 and £39 is applied for unauthorised lending of just a few pennies for a single day sometimes.  The Banks claim that this is not a punitive measure (punitive measures being illegal) but is to cover their own costs- even though those costs are- according to industry watchdogs- at most a couple of quid.   If it isn’t a punitive measure and it isn’t designed to cover costs, can someone explain to me just what it is?

The ‘covering costs’ defence is almost as laughable as the justification for the charges that has been offered.  Banks claim that if they aren’t allowed to apply these levels of charges, then they will need to introduce monthly charges for all personal accounts.  This threat is a transparent attempt to win the support of the public at large.  It is also- aside from being a ham-fisted acceptance that the charges are not designed to cover costs, which they really should have thought twice about- complete nonsense.  The big five Banks make exorbitant profits through excessive (and sometimes illegal) charges which they are able to apply because they operate as a cartel.  Between them they made almost £40,000,000,000 in profit last year (HSBC £12.2bn, RBS £10.3bn, Barclays £7.1bn, HBOS £5.7bn, Lloyds TSB £4bn) and so I don’t think the argument that offsetting the costs elsewhere is necessary holds water.

The victims of these charges tend to be low-income cutomers scratching around to make ends meet.  For them to be punished in such an excessive manner in order to bolster the bloated profits of these huge multinational corporations is obscene.  By enforcing the laws that the Banking sector has flouted for so long, this ruling provides justice for those members of society who we have a duty to protect- the weak and vulnerable customer.  This ruling will not cost the Banks a penny- the money that they will now be required to refund is not legally theirs, they were not entitled to it.  This ruling is simply repairing damages already done and no amount of obfuscation or double-speak from the big Banks should be allowed to detract from that fact.

~ by theraffishdandy on 24 April, 2008.