The overdraft farce
IT has been nearly 14 years since Money Mail first launched its ‘Fair Play on Charges’ campaign in 2006.
since then, we have exposed time and again how greedy banks rake in billions of pounds from customers who accidentally slip into the red.
so when the Financial Conduct authority revealed plans to clampdown on rip-off overdraft charges last year, we were hopeful an end to the racket was finally in sight.
The watchdog ordered banks to scrap sky-high daily fees in favour of a simple, annual interest rate so customers can more easily compare costs. however, it seems the FCa grossly underestimated the banks’ quiet determination to protect their precious profits.
Instead of just reducing their charges for those who dip into unarranged overdrafts, lenders have passed on the cost by hiking up fees for everyone else.
The unintended consequences are that eight million borrowers, who have prudently agreed an overdraft limit in advance, now face higher charges. In some cases, their borrowing costs could double overnight, leaving them in an even worse financial position than before the crackdown.
surprise, surprise, the FCa is unimpressed. It is now demanding to know why banks have all ended up with charges of around 40 pc (or nearer 50 pc for some Lloyds customers).
a spooky coincidence perhaps. Or have they had a peak at each other’s homework?
Before introducing these new fees — which are almost double the average credit card rate — banks should perhaps remember the stark warning buried in the FCa’s report last year: ‘We will consider introducing a price cap in this market if rates increase significantly above our expectations.’
But will the regulator ever carry out this threat? Don’t hold your breath. In the meantime, it is vital that anyone with a large overdraft acts now to reduce it.
Pension scandal
LasT week we reported how pensioners were receiving letters out of the blue demanding they pay back thousands of pounds they had no idea they owed.
Retirement is supposed to be the start of a relaxing new chapter free from the stresses of work. so it is truly a scandal that those who thought they had put work behind them are now being stung with demands for money they could never have known they weren’t entitled to.
Money Mail has been shocked by the sheer number of you who have written in since last week to share similar stories.
You could understand a pension scheme wanting to recoup money if the mistake was blindingly obvious and the retiree should have known something was wrong. But I challenge anyone who is not embedded in the pension industry to know exactly how much they are entitled to in retirement.
The complexity of all the calculations involved are simply impenetrable to most people.
Yet, years on, innocent pensioners are being dragged back into financial uncertainty, with the stress unsurprisingly impacting their wellbeing.
Today, the scandal has taken a dark turn, with our story on Page 45 about former prison officers suffering from mental health disorders being hit with cavalier bills demanding payments in excess of £100,000. These demands are just not acceptable.
Keyless car tip
FInaLLY, a reader from Greenhithe in Kent has offered another tip for drivers worried about keyless car theft.
he says: ‘Check your handbook. I have a Peugeot 104, 2014, which has keyless ignition, and I must say I was a bit nervous having read stories about this being one of the fastest growing car crimes.
‘But we have to help ourselves. a quick look in the handbook says you can turn off the radio signal transmitter by holding down the closed padlock button and then pressing the open padlock button twice. The red light should then flash twice two times.
‘It is very simple to do and takes less than ten seconds. To turn back on, press either button. after a few times, it comes second nature to do it every time you get out the car.’ Worth a try!