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Bank charges 'border on the scandalous'

21 August 2009 / by Rebecca Sargent

Bank charges imposed by banks for unauthorised overdrafts "border on the scandalous", Liberal Democrat leader Nick Clegg has claimed.

In a letter to MoneySavingExpert.com's Martin Lewis, Mr Clegg said: "The treatment of charges by the banks borders on the scandalous. It is a continuation of a protected industry seeking to maximise profits by exploiting the weakness of individual consumers who lack information and sophisticated knowledge of products or legal advice.

"The principle should be established that bank charges must be transparent and cost based."

Martin Lewis has been campaigning against unfair bank charges since before the test case between the Office of Fair Trading (OFT) and the UK's leading banks began.

The case has been ongoing since 2007, and has reached the House of Lords, where the banks are appealing the decision that bank charges can be judged using fairness rules.

A decision is expected in the Autumn, but in the mean time, Nick Clegg has pledged his party's support for Martin Lewis's campaign. Responding to Lewis's call for the banks to repay all 'unfair' bank charges, if they lose, he said:

"This struck me as an extremely good idea that we should do all we can to put in place. Vince Cable, my shadow Chancellor, and I would be delighted to support your campaign.

"We will put a motion before Parliament setting out our support for your idea as soon as the recess is over, which will hopefully put pressure on the government and the banks to act to return the money they so unfairly took from customers," he added.

Find out more about reclaiming bank charges »

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