UK banks ripping consumers off - Cable

UK banks are continuing to rip consumers off - particularly on overdraft rates. A new Panorama program to be broadcast tonight will show how some banks are charging up to 365% interest rates for unauthorised overdrafts.

Worst offenders include big names like Barclays and Bank of Scotland (part of the Lloyds group and part-owned by the taxpayer). Vince Cable has criticised the banks for ripping off customers and says he's determined to see a more competitive UK banking sector.



Clearly set out?

However a spokesman from the British Banking Association told the Telegraph that British banking customers were not being ripped off. "Banks have no desire to hide the cost of borrowing from their customers. Information is clearly set out on bank websites, displayed in branches and sent to customers with their statements."

This sort of response though is disingenuous. Sure, banks generally ensure customers do know what charges they will be billed for if they over-step their overdraft limit. But often they tell them via the small print. Or in jargon. Or they simply don't make the information easily accessible.

Ask a question

Here's an example with Barclays. I logged onto their personal banking website. Under their Ask us a question section on overdraft charges it brought up 10 different headings. Click on What is the situation regarding overdraft charges (fifth down) and you get a long explanation about The Supreme Court ruling in favour of bank overdraft charges in late 2009.

At the bottom under another Related questions link it threw up more information about charges. Except that it didn't talk about figures. That was for yet another link. Except that it wasn't. Blimey Barclays, you don't make it easy, do you?

But Cable's wish for a more competitive banking sector is coming. Virgin hopes to take up some of the slack from the assets of RBS and Lloyds. Metro Bank has already arrived, although it is not UK-wide yet. City heavyweights Lord Levene and Lord McFall are also getting in on the act with a new banking operation.

Reasons to be cheerful

Plus we have a Treasury select committee about to investigating competition with existing retail banks and new entrants. And the Office of Fair Trading is also looking at competition issues in the UK banking sector. Multiple reasons to be hopeful, then.

Oh, and we did find detail about Barclays' overdraft charges. Eventually. Here it is.

Links (opens in new window)

Cable accuses banks of 'ripping off' consumers - Telegraph
Overdraft rates of up to 360% - Daily Mail
British Banking Association
Read Full Story

FROM OUR PARTNERS