ILLEGAL PROFITEERING IN BANKING

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There is substantial evidence that “Illegal Profiteering” exists in the banking industry which could be argued as "Theft". Every time anyone goes into debt or is overdrawn at the bank, the bank will send out letters, often one a day, charging typically £28 per letter supposedly as administration charges. In fact these are “Punitive Charges” or “Fines” illegally levied and could be argued as “Obtaining money under false pretences”. “Section 16 of the 1968 Theft Act, Obtaining a Pecuniary Advantage by Deception”. (Calling a Fine an Admin Charge)

In the past Banks have argued that such charges are part of the agreement between bank and customer, but are they? Very often, the bank will waive this £28 "Fee" if asked. Why? The bank is certainly not being 'Nice' to its customer, being 'Nice' is not part of the bank's policies. They are there purely to make a 'Profit' from their customers. No bank would ever waive any legal "Fees" or 'Interest' to which they were legally entitled. This seems to be a very similar situation to "Legislation for Profit": Charging a small fee in the hope that the majority of people will not contest it.

Under normal circumstances, when you are in credit, if a bank writes you a letter, it will not charge you £28 admin charges. There is no extra administration costs for the bank in writing a letter if you are in credit or in debt. If you are overdrawn or in debt to the bank without permission, they will charge you extortionate fees and charges which you are obliged to pay due to the agreement you have signed with the bank. The bank does not have an agreement to charge you, the customer, extra fees or administration charges under any circumstances outside of this agreement. You are already paying the banks administration charges through the extortionate interest and penalty charges.

In levying “Punitive Charges” or “Fines”, the bank is taking on the role of an “Illegal Court” and finding the customer guilty with no charges or right to redress. This is a blatant disregard for the Stringent Banking Legislation, the Common Law and the Civil and Human Rights of the customer. On top of obtaining money by deception, the banks also add insult to injury and contravene other serious human rights issues. Most people go overdrawn generally due to financial hardship. They may be unemployed or be going through any manner of horrendous social pressures and situations such as death or divorce etc.

The last thing that anyone in such a situation needs is to be aggressively attacked and charged by the banks. This sort of financial aggression could be considered as Usury, which should be a criminal offence. If not, it must be considered very immoral whereby a fantastically wealthy organisation can legally cause hardship and poverty to obtain its “Pound of Flesh”.

The number of cash machines in the UK charging customers to withdraw money has grown almost 13-fold in the last three years. While three years ago there were only 872 cash machines which charged customers to take money out in the UK - that figure has since mushroomed to 11,000. According to research by Sainsbury's Bank, 34 million withdrawals will be carried out using machines which apply surcharges this year - meaning that customers will pay out £42.6 million to have access to their money.

The research also showed that people are confused over how often they have to pay charges. The study found that around 10.5 million people believe that they are charged to withdraw money every month - the real figure is much lower. The bank is calling for operators whose machines impose surcharges to display clear warning signs rather than the more discreet on-screen messages advising them that they will be charged to use the service.

Chief executive Tim Pile said, "All we are saying is that, as with most things in financial services, you should be straightforward with people if they are going to be charged. It seems to me that it is almost hidden." The issue of surcharges for the use of cash machines hit the headlines three years ago amidst consumer anger over the separate issue of so-called disloyalty charges. The charges were imposed by banks on their own customers for using machines operated by rivals.

Alliance & Leicester has changed the rules on its current accounts. The bank is extending its 'shadow overdraft facility' to include cash withdrawals from ATMs. The system, which already applies to payments by debit cards and cheques, is a computer-monitored allowance that usually permits payments to be processed, even if they nudge a customer into the red. The fear is that thousands of customers will now routinely become overdrawn because they will assume that if the machine is dispensing cash, their account must be in credit. A withdrawal of only £10 could incur the £25 charge.

A&L insists the change has been made to bring the bank into line with competitors and said 'The decision has not been driven by a wish to profit.' A&L recently netted an extra £10m in annual profits by increasing the fee applying to borrowers switching mortgages elsewhere. It also caused anger by deciding that cash Isa savers who wanted to transfer their money away from A&L would have to pay £25. Then it slashed the rate it pays on its FirstSaver children's account from 5.25% to 3.65% because it 'no longer wanted to compete in the children's savings market'. (Source: This is Money)

Edna Woolstenhulme, aged 89, was told she could not shut her account and receive her £7,000 savings unless she could prove she was sane. Her account has now been frozen for seven months. The spinster sent her niece to collect the cash but the Royal Bank of Scotland said Edna had to "prove she was of sound mind". The Financial Ombudsman has ruled that the bank had not necessarily acted incorrectly. (Source: Daily Mirror, Sep/06)

The Banking Code Standards Board has refused to name and shame under-performing banks claiming it would breach their human rights. The Board were asked by MPs to say which banks were complying best with a deal to offer basic accounts to two million poor people but the watchdogs said they could not reveal the worst performers. (Source: Sunday People, Mar/06)

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