Foulkes steps up the campaign against Overdraft Fees
Wed 4th Nov 2009
George Foulkes MSP has today stepped up the campaign against Halifax Bank of Scotland's new overdraft fee structure which is expected to hit the pockets of thousands of Scots hard.
From the 6th of December, HBOS will charge their customers for every day they are in their overdraft replacing their previous interest rate based fee.
This new scheme is bad news for customers who are consistently overdrawn, regardless of the amount of money involved. For one customer being overdrawn by £20 for 20 days in a month will cost £20. For another consistently being £400 overdrawn over the space of the year will cost hundreds of pounds to service.
What's more, HBOS customers caught in this trap have very few alternatives as low or moderate credit ratings prevent them from consolidating their debts with a low interest loan or moving banks for a better deal on their current account.
A number of George's constituents have also expressed a fear that by complaining to their banks about this unfair increase in charges, they may be threatened with their entire overdraft facility being removed forcing them into ever greater hardship.
George Foulkes MSP has taken four steps to step up the campaign against these unfair charges. He has:
- written to Consumer Affairs Minister Kevin Brennan seeking assurance the government will do everything it can to challenge these new fee structures in light of the Government's 43% share in the bank
- written to the Financial Services Authority asking them to investigate the new fee structure. Since the 1st of November 2009, the FSA has taken on the responsibility of regulating the relationship banks have with their customers
- written to the Office of Fair Trading asking them whether HBOS has broken aspects of the Unfair Trading Regulations Act 2008 and the Unfair Terms in Consumer Contract Regulations 1999
- written to the Head of Investor Relations at the Lloyds Banking Group seeking assurance that no customer will be penalised for challenging what they perceive to be an unfair material change in terms and conditions.
Commenting on his campaign George Foulkes said: "This new fee structure is outrageous and likely to cause great hardship to thousands of people already in financial dire straits."
"For many of my constituents who live in their overdraft for the best part of their financial month this is a real blow. Their overdraft gives them the leeway to concentrate on clearing some of their more serious debts to credit card companies."
"Everyone appreciates how difficult it is for people to obtain credit at the moment so these customers simply don't have the option to move bank or consolidate their debts with a loan. It really is very unfair and I will be doing all that I can to challenge it."
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