1
00:00:02,360 --> 00:00:06,760
'We put the word out, asking you
to tell us about the rip-offs
that make you rage.

2
00:00:06,760 --> 00:00:09,240
'And you didn't let us down!'

3
00:00:09,240 --> 00:00:10,760
It's sharp practice,
that's what it is.

4
00:00:10,760 --> 00:00:12,920
'There isn't a story too small

5
00:00:12,920 --> 00:00:16,600
'or an issue that we feel
we can't take up on your behalf.'

6
00:00:16,600 --> 00:00:17,760
Who can you rely on?

7
00:00:17,760 --> 00:00:21,040
People out there believe
they are being ripped off

8
00:00:21,040 --> 00:00:23,560
and indeed we are.
We are rip-off Britain.

9
00:00:23,560 --> 00:00:26,880
You've contacted us
in your thousands.

10
00:00:26,880 --> 00:00:30,760
You've written, emailed and even
stopped us in the street!

11
00:00:30,760 --> 00:00:32,280
It's a blatant rip-off.

12
00:00:32,280 --> 00:00:34,200
I feel aggrieved by it.

13
00:00:34,200 --> 00:00:36,840
Somebody's making a very lot
of money on this.

14
00:00:36,840 --> 00:00:38,520
Somebody should take that up.

15
00:00:38,520 --> 00:00:42,320
We've travelled the length
and breadth of the UK to hear
your stories.

16
00:00:43,240 --> 00:00:46,480
Now it's time for us to investigate
on your behalf.

17
00:00:46,480 --> 00:00:49,080
This is Rip-Off Britain.

18
00:00:53,280 --> 00:00:55,960
Hello and welcome to
Rip-Off Britain,

19
00:00:55,960 --> 00:00:59,720
the programme that investigates
your consumer complaints.

20
00:00:59,720 --> 00:01:03,720
These are tough financial times
but after being pushed to the brink,

21
00:01:03,720 --> 00:01:07,040
it seems that our banks
are bouncing back.

22
00:01:07,040 --> 00:01:09,400
Yes, profits, on the whole, are up.

23
00:01:09,400 --> 00:01:12,240
But judging by the letters
you've been sending us,

24
00:01:12,240 --> 00:01:15,080
your levels of customer satisfaction
are not.

25
00:01:15,080 --> 00:01:20,600
Absolutely. The credit crunch
has forced many of us to become
much more financially aware.

26
00:01:20,600 --> 00:01:24,160
Value for money has never, ever
been more important.

27
00:01:24,160 --> 00:01:27,600
But the big question is,
are you getting that value?

28
00:01:29,440 --> 00:01:33,800
Also on today's show, the consumers
making their own lives
more difficult

29
00:01:33,800 --> 00:01:36,440
by not reading the small print.

30
00:01:37,440 --> 00:01:40,520
Plus paying the price
for being overdrawn.

31
00:01:41,960 --> 00:01:44,040
And waste not, want not.

32
00:01:44,040 --> 00:01:47,160
The utility bills
that just don't add up.

33
00:01:48,040 --> 00:01:51,240
As a nation, we work hard
for our money

34
00:01:51,240 --> 00:01:56,160
and at Rip-Off Britain, we believe
every penny that goes out
should be a penny well spent.

35
00:01:56,160 --> 00:02:00,800
But you've been letting us know
that that is not always the case.

36
00:02:01,880 --> 00:02:04,240
The Business Secretary, Vince Cable,

37
00:02:04,240 --> 00:02:09,240
recently said that he believes that
British banks are ripping off
their customers.

38
00:02:09,240 --> 00:02:12,440
He's blamed it on a lack
of competition in the sector,

39
00:02:12,440 --> 00:02:19,280
pointing out that banking
is dominated by just a handful
of very big players.

40
00:02:19,280 --> 00:02:21,920
One of his biggest concerns

41
00:02:21,920 --> 00:02:25,280
is something that you've contacted
us about in your droves -

42
00:02:25,280 --> 00:02:28,120
charges for unauthorised overdrafts.

43
00:02:29,040 --> 00:02:30,840
You come and score, Ollie.

44
00:02:30,840 --> 00:02:35,560
If you were a bank manager, Terence
King-Smith is the kind of man

45
00:02:35,560 --> 00:02:37,640
you'd want on your team.

46
00:02:37,640 --> 00:02:41,400
He's paid off his mortgage and he
keeps a close eye on his finances.

47
00:02:41,400 --> 00:02:46,600
I think I'm a pretty good customer.
I always keep funds
in the domestic account,

48
00:02:46,600 --> 00:02:51,480
I've only been overdrawn once
in many, many years.

49
00:02:51,480 --> 00:02:55,880
I use the bank's services
for direct debits.

50
00:02:55,880 --> 00:02:59,480
In fact, the fewer cheques
I have to write, the better.

51
00:02:59,480 --> 00:03:03,040
The cheques Terence tries
to tackle first

52
00:03:03,040 --> 00:03:06,840
are the ones he sends to help with
his grandchildren's school fees.

53
00:03:06,840 --> 00:03:11,440
I've got ample funds
to support a lifestyle

54
00:03:11,440 --> 00:03:16,240
and, in fact, help my children
and grandchildren enjoy their lives
as well.

55
00:03:16,240 --> 00:03:20,560
I was very lucky when I was younger.
I had a grandmother

56
00:03:20,560 --> 00:03:24,520
who ensured that I got
a good education

57
00:03:24,520 --> 00:03:27,520
and I feel I should do the same
for my family.

58
00:03:27,520 --> 00:03:31,520
Terence has a separate bank account
for his grandchildren's schooling

59
00:03:31,520 --> 00:03:34,200
and as a system
it's always worked well.

60
00:03:35,160 --> 00:03:37,640
Until, that is, earlier this year.

61
00:03:37,640 --> 00:03:41,800
We went on holiday
for quite a long trip

62
00:03:41,800 --> 00:03:44,200
that included Christmas.

63
00:03:44,200 --> 00:03:47,160
We were due back
towards the end of January.

64
00:03:47,160 --> 00:03:50,120
I had already made arrangements

65
00:03:50,120 --> 00:03:55,000
for these cheques to be in the hands
of my children to pay the fees,

66
00:03:55,000 --> 00:04:00,160
and arrangements for the bank
to transfer the funds
into the second account.

67
00:04:01,640 --> 00:04:04,720
But while Terence was cultivating
his sun tan,

68
00:04:04,720 --> 00:04:09,080
he was blissfully unaware that
the transfer had fallen short,

69
00:04:09,080 --> 00:04:12,480
sending him £24 into the red.

70
00:04:12,480 --> 00:04:16,640
He was also in the dark about the
cost of this unauthorised overdraft,

71
00:04:16,640 --> 00:04:20,800
which was going up by five pounds
every day.

72
00:04:21,880 --> 00:04:25,240
By the time he returned home,
his original bill of £24

73
00:04:25,240 --> 00:04:27,840
had risen to 65.

74
00:04:27,840 --> 00:04:32,840
I was annoyed with the bank
that there had been a delay

75
00:04:32,840 --> 00:04:36,280
in being notified about it
because I'd been away.

76
00:04:36,280 --> 00:04:41,760
I felt that if they needed
to tell me about something
as serious as this,

77
00:04:41,760 --> 00:04:45,040
they could perhaps engage
other forms of communication.

78
00:04:45,040 --> 00:04:49,160
They could have used email, they
could have used my mobile phone

79
00:04:49,160 --> 00:04:54,240
and then I could have picked up
the information immediately
and done something about it.

80
00:04:54,240 --> 00:04:58,680
Convinced the bank would see reason,
Terence acted immediately.

81
00:04:58,680 --> 00:05:03,720
I wrote to the bank and said
I thought this was entirely
disproportional

82
00:05:03,720 --> 00:05:06,840
to the £24 or so
that I'd gone overdrawn

83
00:05:06,840 --> 00:05:09,160
and it wasn't going to become
a bad debt,

84
00:05:09,160 --> 00:05:12,240
would they please reconsider.

85
00:05:12,240 --> 00:05:14,400
The answer is, "No, that's it."

86
00:05:15,440 --> 00:05:20,320
Undeterred, Terence unloaded his
problems to the financial ombudsman.

87
00:05:20,320 --> 00:05:24,520
He was surprised to hear that
these charges were perfectly legal.

88
00:05:24,520 --> 00:05:30,480
He was left with no choice
but to pay up before his costs rose
even further.

89
00:05:31,560 --> 00:05:34,840
I was fortunate in being able
to settle this quite quickly.

90
00:05:34,840 --> 00:05:38,640
I can quite understand that someone
on a much tighter budget

91
00:05:38,640 --> 00:05:43,160
would find it very difficult
to keep finding the extra funds

92
00:05:43,160 --> 00:05:46,360
while this sum of money
was piling up.

93
00:05:48,960 --> 00:05:53,920
For many families, £65 could easily
represent their weekly shopping.

94
00:05:53,920 --> 00:05:57,760
If they have a family,
then it's obviously vital

95
00:05:57,760 --> 00:06:01,680
that they don't waste
that kind of money.

96
00:06:01,680 --> 00:06:04,000
Fruit? Yes, please. Yes, please.

97
00:06:04,000 --> 00:06:09,280
For Terence, the whole incident
has left a bad taste in his mouth.

98
00:06:09,280 --> 00:06:14,720
The amount they charged on this
occasion and could have charged
even more

99
00:06:14,720 --> 00:06:17,320
if I hadn't come home
on the 19th of January,

100
00:06:17,320 --> 00:06:23,040
is out of all proportion
to what I had done wrong.

101
00:06:23,040 --> 00:06:28,080
I don't agree that people
should be allowed to get away
with such exorbitant charges.

102
00:06:28,080 --> 00:06:32,880
And this isn't the only type of bank
charge that you think is exorbitant.

103
00:06:32,880 --> 00:06:38,800
Later in the show, we'll reveal more
of the banking bills that are
making you see red.

104
00:06:41,440 --> 00:06:47,320
When the cost of our most basic
amenities, such as electricity,
gas and water,

105
00:06:47,320 --> 00:06:49,120
creep up year on year,

106
00:06:49,120 --> 00:06:53,520
it doesn't come as a huge surprise
because we know the cost of living
is on the up.

107
00:06:53,520 --> 00:06:56,120
But how would you feel
if one of your bills

108
00:06:56,120 --> 00:07:00,800
increased by 7,500%
in just two years?

109
00:07:00,800 --> 00:07:03,040
It almost beggars belief.

110
00:07:03,040 --> 00:07:05,880
But for some villagers near Romsey
in Hampshire,

111
00:07:05,880 --> 00:07:08,160
it is all too real.

112
00:07:10,000 --> 00:07:11,560
Come on, then!

113
00:07:12,960 --> 00:07:16,840
Michael Walder lives
on a small estate in Awbridge.

114
00:07:20,960 --> 00:07:24,040
We've lived here since 1970

115
00:07:24,040 --> 00:07:28,840
and the area is perfect.
We don't want to move.

116
00:07:28,840 --> 00:07:31,200
There's no vandalism on the estate.

117
00:07:31,200 --> 00:07:34,640
It's a quiet estate
and we're quite happy.

118
00:07:37,760 --> 00:07:42,360
But there's a fly in the ointment.
The sewage collection on this estate

119
00:07:42,360 --> 00:07:47,240
isn't dealt with by a water company
as it is in most urban areas.

120
00:07:47,240 --> 00:07:52,280
Instead, it's removed by
a private housing association,

121
00:07:52,280 --> 00:07:53,800
Testway Housing.

122
00:07:53,800 --> 00:07:57,240
The residents aren't happy
with what they're being charged.

123
00:07:59,640 --> 00:08:04,240
The treatment plant is situated down
the bottom of the circle

124
00:08:04,240 --> 00:08:07,320
round by the back of the garages.

125
00:08:07,320 --> 00:08:11,480
As you can see,
it's 40 years old now.

126
00:08:12,840 --> 00:08:15,480
The bills started rising

127
00:08:15,480 --> 00:08:17,760
about two years ago.

128
00:08:17,760 --> 00:08:24,800
We suddenly had a jump of 200-plus
from the year before.

129
00:08:25,920 --> 00:08:29,400
Then this year,
it done another jump of 200.

130
00:08:29,400 --> 00:08:35,680
We got a bit concerned that we were
paying for something that we
didn't know anything about.

131
00:08:36,840 --> 00:08:40,680
The residents of Awbridge pay
around £700 a year

132
00:08:40,680 --> 00:08:45,280
to have their sewage dealt with,
almost twice the national average

133
00:08:45,280 --> 00:08:47,880
for both sewage removal
and water rates.

134
00:08:47,880 --> 00:08:51,680
It means that every time
the Walders flush their toilet,

135
00:08:51,680 --> 00:08:53,960
ten pence is going down the drain.

136
00:08:53,960 --> 00:08:56,160
And Michael's had enough.

137
00:08:56,160 --> 00:08:59,680
He's decided to get
the whole community involved

138
00:08:59,680 --> 00:09:02,080
to try to challenge the charges.

139
00:09:02,080 --> 00:09:04,000
It just goes up and up and up.

140
00:09:04,000 --> 00:09:07,320
What scares me is not so much
what it is now

141
00:09:07,320 --> 00:09:11,000
but if you took that for ten years,
a 40% increase year on year,

142
00:09:11,000 --> 00:09:13,960
it's about £14,000,
your annual sewage bill.

143
00:09:15,240 --> 00:09:21,440
I'm an old age pensioner
and I'm living on my pension
and also my savings.

144
00:09:21,440 --> 00:09:25,120
Eventually, if they keep putting
the sewerage up,

145
00:09:25,120 --> 00:09:28,280
then I won't be able to afford it.

146
00:09:28,280 --> 00:09:31,880
I don't know how long we'll be able
to stay where we are.

147
00:09:32,960 --> 00:09:36,840
The villagers have even got
local MP Caroline Noakes on board.

148
00:09:36,840 --> 00:09:40,000
But because Testway
is a private company,

149
00:09:40,000 --> 00:09:44,720
it doesn't fall under the remit of
the national water regulator, Ofwat.

150
00:09:45,960 --> 00:09:52,120
There seems to be an enormous
discrepancy between the amount paid
by some householders.

151
00:09:52,120 --> 00:09:55,640
Some residents pay nothing
to have waste water taken away.

152
00:09:55,640 --> 00:09:58,720
Others are paying £700 a year

153
00:09:58,720 --> 00:10:03,800
and in the case of Awbridge, the
school is paying roughly the same
as a private house would.

154
00:10:03,800 --> 00:10:08,680
I think we can all appreciate that
there are about 100 pupils
at Awbridge primary school

155
00:10:08,680 --> 00:10:12,680
all flushing that loo a lot more
than a private household would.

156
00:10:12,680 --> 00:10:17,480
So how do Testway justify
the price discrepancies?

157
00:10:18,280 --> 00:10:21,240
Providing sewage treatment
within a rural area

158
00:10:21,240 --> 00:10:25,360
is a very expensive thing to do,
especially when you're not connected

159
00:10:25,360 --> 00:10:26,880
to the mains.

160
00:10:26,880 --> 00:10:32,480
The charges that we pass on
to the local community
for their sewage treatment

161
00:10:32,480 --> 00:10:36,080
just reflect the costs that we face.

162
00:10:36,080 --> 00:10:41,560
We pass on what it costs us and not
a penny more. Now, over time,

163
00:10:41,560 --> 00:10:43,640
the costs have gone up.

164
00:10:43,640 --> 00:10:47,600
But, as I say, they reflect
what it costs us. Every year,

165
00:10:47,600 --> 00:10:51,600
we work out what we think
it's going to cost us

166
00:10:51,600 --> 00:10:53,680
and actually, the majority of years,

167
00:10:53,680 --> 00:10:57,560
it's actually ended up costing
residents less than what we thought.

168
00:11:00,960 --> 00:11:02,880
Less than expected, maybe,

169
00:11:02,880 --> 00:11:05,240
but still over the odds.

170
00:11:05,240 --> 00:11:08,320
And what frustrates the residents
even more

171
00:11:08,320 --> 00:11:12,760
is the fact that Testway isn't even
supposed to run the sewage works.

172
00:11:12,760 --> 00:11:16,200
Under the Flood
and Water Management Act,

173
00:11:16,200 --> 00:11:20,760
the regulated company Southern Water
is supposed to take the service on.

174
00:11:20,760 --> 00:11:24,280
But that hasn't happened yet.

175
00:11:25,280 --> 00:11:29,080
We've been waiting now for
nearly 12 - it will be - 12 years,

176
00:11:29,080 --> 00:11:33,240
since 2000 when they said it was
going to be taken over.

177
00:11:33,240 --> 00:11:37,840
It's the uncertainty. We don't know
what's going to happen next week
or next year.

178
00:11:37,840 --> 00:11:40,320
They can do anything they like.

179
00:11:40,320 --> 00:11:42,920
And we can't do anything.
We're stuck.

180
00:11:42,920 --> 00:11:44,600
So, what's the hold-up?

181
00:11:44,600 --> 00:11:47,360
Time to ask Southern Water
for answers.

182
00:11:47,360 --> 00:11:50,400
We were quite happy to take it over
as soon as possible,

183
00:11:50,400 --> 00:11:54,240
but it depends on whether the plant
has its environmental consents

184
00:11:54,240 --> 00:11:56,080
and that isn't the case.

185
00:11:56,080 --> 00:11:59,280
If a plant doesn't have
its environmental permits,

186
00:11:59,280 --> 00:12:02,440
we risk prosecution, so we have
to protect our interests

187
00:12:02,440 --> 00:12:06,960
and the interests of our customers
who would have to pay for repairs
or upgrades.

188
00:12:06,960 --> 00:12:12,680
The latest news we heard via Testway
and the agency is that
it might be 2012.

189
00:12:12,680 --> 00:12:16,600
But if these things can be speeded
up, if the plant gets its permits,

190
00:12:16,600 --> 00:12:20,400
if it operates correctly with
the right environmental standards,

191
00:12:20,400 --> 00:12:23,560
then fine, Southern Water are happy
to take it over.

192
00:12:23,560 --> 00:12:29,520
So there may soon be light at the
end of the tunnel for Michael and
the rest of the Awbridge residents.

193
00:12:30,960 --> 00:12:34,160
But Caroline Noakes has warned that
their experience

194
00:12:34,160 --> 00:12:35,880
could be repeated elsewhere.

195
00:12:35,880 --> 00:12:39,760
There are a number of smaller
schemes in more remote locations

196
00:12:39,760 --> 00:12:44,640
that will never be able to be
brought up to the standard to be
adopted by Southern Water.

197
00:12:44,640 --> 00:12:47,320
For those people,
this problem will prevail.

198
00:12:52,520 --> 00:12:56,640
Water and sewerage services are
something every household needs.

199
00:12:56,640 --> 00:13:00,840
But bills can vary hugely
depending on where you live.

200
00:13:00,840 --> 00:13:05,120
And it isn't always clear exactly
what you're paying for.

201
00:13:05,120 --> 00:13:08,320
Clare Francis from Moneysupermarket
has more.

202
00:13:08,320 --> 00:13:11,280
The thing is, not all
properties in the country

203
00:13:11,280 --> 00:13:13,880
are connected to the mains
drainage system.

204
00:13:13,880 --> 00:13:18,360
So some households have to have
their own private sewerage disposal

205
00:13:18,360 --> 00:13:21,560
in the garden, often a septic tank.

206
00:13:21,560 --> 00:13:26,200
As a property owner,
you're responsible for
the removal of that waste.

207
00:13:26,200 --> 00:13:29,680
There are a number of companies
that offer this service

208
00:13:29,680 --> 00:13:31,400
and will get rid of it for you.

209
00:13:31,400 --> 00:13:35,240
Make sure they're registered with
the Environment Agency first.

210
00:13:35,240 --> 00:13:37,400
As with all services,
charges do vary,

211
00:13:37,400 --> 00:13:41,680
so it's worth calling a number of
firms before you decide which one
to go with.

212
00:13:41,680 --> 00:13:43,720
Some will charge a flat fee,

213
00:13:43,720 --> 00:13:47,280
others will do a quotation based
on individual circumstances,

214
00:13:47,280 --> 00:13:50,880
the size of the tank, where they
can park in relation to it.

215
00:13:50,880 --> 00:13:54,680
It's important you know exactly
what's included in the quotation.

216
00:13:55,360 --> 00:14:00,960
Don't assume a septic tank in
the garden is a more expensive way
of getting rid of waste

217
00:14:00,960 --> 00:14:03,320
than if you were connected to
the mains.

218
00:14:04,000 --> 00:14:08,440
The recommendation is you have
a septic tank emptied
at least once a year

219
00:14:08,440 --> 00:14:10,280
if you're a family of four.

220
00:14:11,160 --> 00:14:16,520
You're looking probably to expect
to pay around 120 to 150 quid
to have it emptied.

221
00:14:16,520 --> 00:14:20,120
Counter that to the cost of being
connected to the main drainage

222
00:14:20,120 --> 00:14:23,840
where you'd probably pay about
£300 a year for waste disposal,

223
00:14:23,840 --> 00:14:27,160
actually septic tanks aren't
necessarily that expensive.

224
00:14:28,960 --> 00:14:30,880
Still to come on Rip-Off Britain:

225
00:14:30,880 --> 00:14:33,760
the plastic that isn't fantastic!

226
00:14:34,560 --> 00:14:37,040
How to know if you've been
rate-jacked.

227
00:14:38,200 --> 00:14:40,400
And planning your financial future.

228
00:14:40,400 --> 00:14:44,400
What you need to know to ensure
you are not ripped off.

229
00:14:45,960 --> 00:14:49,800
Earlier, we heard from Angela
just how quickly costs can mount

230
00:14:49,800 --> 00:14:52,160
if we get overdrawn
without permission.

231
00:14:52,160 --> 00:14:59,240
In fact, penalty charges are thought
to cost us around - wait for it -
three billions pounds every year!

232
00:15:01,480 --> 00:15:03,880
It's a staggeringly high figure,

233
00:15:03,880 --> 00:15:07,720
but it doesn't surprise
one of our viewers, Sean Murray.

234
00:15:07,720 --> 00:15:09,240
Lift it over the net!

235
00:15:09,240 --> 00:15:13,800
Sean Murray is a father of one.
He keeps himself busy running
two businesses

236
00:15:13,800 --> 00:15:16,400
including a tennis coaching school.

237
00:15:16,400 --> 00:15:18,800
Get back there, Katie,
you can do it! Good!

238
00:15:18,800 --> 00:15:24,440
Like any business owner,
Sean understands the importance
and value of money.

239
00:15:24,440 --> 00:15:26,840
Move, balance, hit. Great!

240
00:15:26,840 --> 00:15:30,120
He doesn't like to feel
he's getting a raw deal.

241
00:15:30,120 --> 00:15:31,840
Don't forget, boys and girls,

242
00:15:31,840 --> 00:15:35,760
when you're older and you open a
bank account, do not go overdrawn!

243
00:15:35,760 --> 00:15:39,600
Cos you'll get ripped off by
the banks in the British system.

244
00:15:39,600 --> 00:15:42,000
Having joined his bank
over 20 years ago,

245
00:15:42,000 --> 00:15:47,080
Sean could be forgiven for thinking
it would aim high when it came to
returning his loyalty.

246
00:15:47,080 --> 00:15:52,120
You would think, as a customer
of any sort of business,
bank or otherwise,

247
00:15:52,120 --> 00:15:56,400
that if you've been a customer since
you were like seven-years-old,

248
00:15:56,400 --> 00:15:58,160
and I'm now 37,

249
00:15:58,160 --> 00:16:04,800
it's been about that length of time,
you would gain a lot of loyalty, not
just a bit, but a lot of loyalty.

250
00:16:04,800 --> 00:16:08,040
But recently he was left in no doubt

251
00:16:08,040 --> 00:16:11,360
that the ball was well and truly
in his bank's court.

252
00:16:11,360 --> 00:16:15,520
I thought I still had £10 left
in there. It turned out
I had nine pounds left.

253
00:16:15,520 --> 00:16:20,120
I went and got a meal from McDonalds
as I was rushing between clients,

254
00:16:20,120 --> 00:16:24,920
and I spent £9.08, so that put me
eight pence overdrawn.

255
00:16:24,920 --> 00:16:31,240
Little did Sean know just how much
that fast-food meal would end up
costing him

256
00:16:31,240 --> 00:16:32,760
in the long run.

257
00:16:32,760 --> 00:16:37,760
I received a letter through the post
saying I'm being charged £28
for being overdrawn.

258
00:16:37,760 --> 00:16:42,440
I looked at my statement and saw
that I was eight pence overdrawn.

259
00:16:42,440 --> 00:16:47,480
I could not believe that anybody can
charge somebody £28 for being eight
pence overdrawn.

260
00:16:47,480 --> 00:16:49,120
That's what 8p looks like.

261
00:16:49,120 --> 00:16:52,120
I mean, come on! 8p?! 8p!

262
00:16:52,120 --> 00:16:57,040
It's thought that 12 million of us
get overdrawn without permission
every year.

263
00:16:57,040 --> 00:16:59,640
The fees charged
for unauthorised borrowing

264
00:16:59,640 --> 00:17:01,320
can vary from bank to bank.

265
00:17:01,320 --> 00:17:05,600
And they can keep rising until
you get your account out of the red.

266
00:17:06,800 --> 00:17:10,520
'£28 doesn't sound a lot of money
to a lot of people, I know that.

267
00:17:10,520 --> 00:17:15,400
'At the time, though, I'd just
set up a mobile valeting business'

268
00:17:15,400 --> 00:17:18,800
and I've run a tennis coaching
business for eight years.

269
00:17:18,800 --> 00:17:21,120
Are you going to be
a great tennis player?

270
00:17:21,120 --> 00:17:26,120
'All the money I had coming in was
going out in the running costs
of the business.'

271
00:17:26,120 --> 00:17:29,920
Every penny I had coming in
was going out.

272
00:17:29,920 --> 00:17:32,800
Sean asked the bank if there was
anything he could do

273
00:17:32,800 --> 00:17:35,040
to stop his charges from spiralling.

274
00:17:35,040 --> 00:17:38,520
'They wouldn't let me close the
account. I asked to freeze it.

275
00:17:38,520 --> 00:17:40,840
Keep the account open,
but freeze it.

276
00:17:40,840 --> 00:17:43,960
I'll pay the £28 if you're going
to charge me £28 for 8p,

277
00:17:43,960 --> 00:17:47,920
which is ridiculous,
but don't charge upon that
cos we can't afford it.

278
00:17:47,920 --> 00:17:49,880
I can get that money
in a week or two.

279
00:17:49,880 --> 00:17:56,520
They said, "We can't freeze it.
Pay the charge or you'll be charged
again. You're overdrawn by £28.08."

280
00:17:56,520 --> 00:18:00,680
'That was the attitude.
I put the phone down.'

281
00:18:00,680 --> 00:18:04,880
And I'm fuming. And we can't pay it.

282
00:18:04,880 --> 00:18:08,880
So, obviously, the next four or five
months, it accumulates to £215.

283
00:18:08,880 --> 00:18:12,800
What had started out
as an eight pence overdraft

284
00:18:12,800 --> 00:18:16,240
was now a bill for more than £200.

285
00:18:16,240 --> 00:18:18,440
We decided we had to end this
somehow.

286
00:18:18,440 --> 00:18:23,520
We lent the money off a family
friend who we paid back
within about a week.

287
00:18:23,520 --> 00:18:28,960
The bank specifically have lost out
now because I've closed my account
down.

288
00:18:28,960 --> 00:18:32,480
We have a healthy profit coming in
from the valeting business

289
00:18:32,480 --> 00:18:35,920
and my tennis business now, and
we'll be saving a lot of money.

290
00:18:35,920 --> 00:18:40,720
Sean has vowed never to let his
accounts fall into the red again.

291
00:18:40,720 --> 00:18:44,800
And with some banks applying daily
charges that can add up to

292
00:18:44,800 --> 00:18:48,560
the equivalent of
3,000% APR,

293
00:18:48,560 --> 00:18:52,480
he's determined that it won't be
a case of game, set and match

294
00:18:52,480 --> 00:18:54,480
for his bank ever again.

295
00:18:54,480 --> 00:18:56,680
Come on, work it up.

296
00:18:56,680 --> 00:18:59,640
That's a professional shot.
Come on, work it up!

297
00:18:59,640 --> 00:19:04,200
It's thought that around 30 million
of us own a credit or charge card.

298
00:19:04,200 --> 00:19:06,280
And, if that figure includes you,

299
00:19:06,280 --> 00:19:10,480
you'll already know that
they're rarely the cheapest way
to borrow money.

300
00:19:12,320 --> 00:19:14,960
What you might not be so familiar
with, though,

301
00:19:14,960 --> 00:19:17,120
is something called "rate-jacking".

302
00:19:17,120 --> 00:19:19,240
It's a relatively new phenomenon,

303
00:19:19,240 --> 00:19:23,600
but it's fast becoming
the latest enemy in our battle
against the banks.

304
00:19:28,040 --> 00:19:30,600
Pinning down the best
credit card rate

305
00:19:30,600 --> 00:19:34,920
can be almost as tough as spotting
an exotic species on the Thames,

306
00:19:34,920 --> 00:19:39,200
as bird-watching enthusiast
Rick Morris knows all too well.

307
00:19:39,200 --> 00:19:42,000
I took it out several years ago
with my bank

308
00:19:42,000 --> 00:19:47,040
and it seemed a relatively good rate
of interest at the time.
I don't remember what it was.

309
00:19:47,040 --> 00:19:49,480
But it has, I think,
gone up over the years.

310
00:19:49,480 --> 00:19:54,520
Earlier this year,
Rick reached his credit limit
of just over £6,000.

311
00:19:54,520 --> 00:19:56,480
Like all too many of us,

312
00:19:56,480 --> 00:19:59,880
he'd been paying off just
the minimum amount every month.

313
00:19:59,880 --> 00:20:03,320
I had a letter
from the credit card provider

314
00:20:03,320 --> 00:20:07,280
to say that my credit limit
was being raised.

315
00:20:07,280 --> 00:20:13,760
Not by a lot, it has to be said,
I think by £650 to 6,800.

316
00:20:13,760 --> 00:20:17,240
And I would assume it means
they think I'm a good risk.

317
00:20:17,240 --> 00:20:21,160
A good risk maybe.
But the good news stopped there.

318
00:20:21,160 --> 00:20:24,560
I had a letter to tell me
the rate was going up

319
00:20:24,560 --> 00:20:29,680
and I had no idea about this
and there was no reason given
for it, really.

320
00:20:29,680 --> 00:20:34,600
It went suddenly from around 16%
up to in excess of 20%.

321
00:20:34,600 --> 00:20:36,680
A sort of 25% hike.

322
00:20:36,680 --> 00:20:42,320
Rick was less than impressed
with the explanation his credit card
company gave him for the price hike.

323
00:20:42,320 --> 00:20:48,520
They jack the rates up and customers
have to like it or lump it.
That's what it comes down to.

324
00:20:50,320 --> 00:20:54,440
The official cost of borrowing
has reached a record low this year.

325
00:20:54,440 --> 00:20:59,160
But despite this, the interest rates
charged on credit card debts

326
00:20:59,160 --> 00:21:00,960
have continued to rise.

327
00:21:04,360 --> 00:21:08,840
Quentin Barker, from Norwich,
is another unhappy
credit card customer.

328
00:21:08,840 --> 00:21:12,840
I work for the highways department
of Norfolk County Council.

329
00:21:12,840 --> 00:21:18,640
My job involves going up and down
the highways, inspecting for various
problems, meeting people.

330
00:21:18,640 --> 00:21:24,640
I can spend anything up to £150
a month just on fuel

331
00:21:24,640 --> 00:21:28,360
and obviously I need to put this
on my credit card.

332
00:21:28,360 --> 00:21:33,800
I can, unfortunately, spend more in
a month than I pay back sometimes.

333
00:21:33,800 --> 00:21:36,640
That is the nature of credit cards,
I'm afraid.

334
00:21:36,640 --> 00:21:41,280
Quentin had been paying
an interest rate of 24.9%,

335
00:21:41,280 --> 00:21:43,480
which he thought was
more than enough.

336
00:21:43,480 --> 00:21:47,800
But then, out of the blue,
they put it up to 28.9,

337
00:21:47,800 --> 00:21:49,880
which is ridiculous!

338
00:21:49,880 --> 00:21:52,440
When the bank rate
is at an all-time low,

339
00:21:52,440 --> 00:21:55,320
credit cards are putting
their rates up!

340
00:21:55,320 --> 00:21:59,000
I thought, "This is loan shark
territory. This is ridiculous!"

341
00:21:59,000 --> 00:22:03,440
Store cards don't charge this much
and they're well known
for being expensive.

342
00:22:03,440 --> 00:22:06,720
I couldn't believe it, in all
honesty. I really couldn't.

343
00:22:06,720 --> 00:22:10,600
He contacted his bank to try
and find out what was going on.

344
00:22:10,600 --> 00:22:15,360
They told me I had been notified,
although I hadn't noticed it because
it was on the back of the statement.

345
00:22:15,360 --> 00:22:18,800
You don't read the whole statement,
you just look at the financial bits.

346
00:22:18,800 --> 00:22:20,840
Maybe you should, but you don't.

347
00:22:20,840 --> 00:22:23,320
I stopped using the card
and I've since paid it off.

348
00:22:23,320 --> 00:22:26,960
I won't deal with a company
that does that to me,
so I no longer use it.

349
00:22:26,960 --> 00:22:32,440
Sandra Quinn of the
UK Cards Association represents
the credit card industry.

350
00:22:32,440 --> 00:22:37,360
She says the rate rises
are justified, even though bank base
rates are at an all-time low.

351
00:22:37,360 --> 00:22:41,240
There's no relation between
interest rates and base rates.

352
00:22:41,240 --> 00:22:44,200
An interest rate does include the
base rate, but it also includes

353
00:22:45,000 --> 00:22:48,480
other fees and charges that are
the cost for a credit card company

354
00:22:48,480 --> 00:22:51,920
of running a credit card. You've got
the cost of providing fraud cover,

355
00:22:51,920 --> 00:22:57,680
of providing a service. For most
customers this is a free service.

356
00:22:57,680 --> 00:23:03,120
61% of us pay off our credit card
bills in full every month so we're
getting this service free of charge.

357
00:23:03,120 --> 00:23:08,480
So absolutely interest rates are part
of that deal, but there's no relation
to base rates and never has been.

358
00:23:10,000 --> 00:23:12,800
For Rick, there was
more bad news to come.

359
00:23:12,800 --> 00:23:16,760
His second credit card was also
being hit with an interest increase,

360
00:23:16,760 --> 00:23:20,960
which meant his monthly repayments
were about to rise sharply.

361
00:23:20,960 --> 00:23:26,320
It seems to work out at
something like £480 a year,

362
00:23:26,320 --> 00:23:32,360
the increase in interest per card,
so around about £1,000 extra.

363
00:23:32,360 --> 00:23:36,600
It's all money in my pocket and
that comes out of an earned income

364
00:23:36,600 --> 00:23:43,640
after tax so effectively that means
I need to earn another £1,500 a year
just to keep paying the credit card.

365
00:23:43,640 --> 00:23:46,560
Consumer experts advise people
to take advantage of

366
00:23:46,560 --> 00:23:51,520
interest free balance transfers, as
long as we pay off the money we owe

367
00:23:51,520 --> 00:23:53,800
before the deal comes to an end.

368
00:23:53,800 --> 00:23:59,960
But, if like Rick, you have
a poor credit history, shopping
around isn't always an option.

369
00:23:59,960 --> 00:24:02,400
I'm stuck with those interest rates.

370
00:24:02,400 --> 00:24:09,360
I suppose, because I've had three
cards and the total on those comes
to about 26,000 on the credit cards,

371
00:24:09,360 --> 00:24:14,800
and maybe they think that's
more than enough.

372
00:24:14,800 --> 00:24:20,000
We've invited debt specialist Refat
Naz Dhar from the Money Advice Trust

373
00:24:20,000 --> 00:24:24,160
to see what options there are
for Rick and others like him.

374
00:24:24,160 --> 00:24:27,200
Hello there. Hello, I'm Refat.
Nice to meet you.

375
00:24:27,200 --> 00:24:34,240
The first step for you that I would
advise you to do is to work out
an income and expenditure form.

376
00:24:34,240 --> 00:24:39,040
You won't know until that stage
whether you have enough money to
cover your credit cards and loans

377
00:24:39,040 --> 00:24:43,080
without using an overdraft,
and without juggling other
payments month to month.

378
00:24:43,080 --> 00:24:47,680
Refat thinks that,
if Rick's outgoings
exceed what he has coming in,

379
00:24:47,680 --> 00:24:51,760
he may need to consider using
a special debt management service,

380
00:24:51,760 --> 00:24:53,800
as long as it's a reputable one.

381
00:24:53,800 --> 00:24:57,040
That's where you make a payment
to a company

382
00:24:57,040 --> 00:25:01,640
and they will distribute your
payments to all of your creditors

383
00:25:01,640 --> 00:25:04,640
for you, and deal with all
of the negotiating for you.

384
00:25:04,640 --> 00:25:09,000
We'd advise you to go to
a free service like Consumer
Credit Counselling Service

385
00:25:09,000 --> 00:25:13,400
and Payplan, who wouldn't charge
you anything for that service.

386
00:25:13,400 --> 00:25:19,680
It's interesting to know that
there are these companies
that provide advice for free.

387
00:25:19,680 --> 00:25:23,720
I didn't know they existed
so that was totally new.

388
00:25:23,720 --> 00:25:25,440
And...

389
00:25:25,440 --> 00:25:29,120
Yes, very, very helpful to
get that kind of advice.

390
00:25:31,960 --> 00:25:34,760
And there may soon be
even more help at hand.

391
00:25:34,760 --> 00:25:39,600
The government recently announced
a wide-reaching review
of consumer borrowing,

392
00:25:39,600 --> 00:25:44,400
and it's thought this could lead
to a limit being placed on
credit card interest rates.

393
00:25:44,400 --> 00:25:48,080
We'll know for sure if it's
on the cards some time next year.

394
00:25:48,080 --> 00:25:53,200
In the meantime,
Rick and the rest of us
will just have to keep coughing up.

395
00:25:55,960 --> 00:25:59,840
It's thought there are more
credit cards in Britain
than there are people.

396
00:25:59,840 --> 00:26:01,600
These aren't all mine by the way!

397
00:26:01,600 --> 00:26:04,320
So the chances are
most of you will own one.

398
00:26:04,320 --> 00:26:07,480
What do you need to know
to avoid being rate-jacked?

399
00:26:07,480 --> 00:26:11,600
Donna Ferguson from Love Money
has been on the case.

400
00:26:11,600 --> 00:26:14,640
If you get a letter from your
credit card company telling you

401
00:26:14,640 --> 00:26:18,800
you're rate is going up, you're
entitled to demand an explanation.

402
00:26:18,800 --> 00:26:23,880
What's more, they can't put a rate
up more than once every six months.

403
00:26:23,880 --> 00:26:28,720
If you took out a card less than 12
months ago, and they didn't tell you

404
00:26:28,720 --> 00:26:34,520
about the rate hike at the time,
they can't put your rate up at all.

405
00:26:34,520 --> 00:26:40,040
The good news is it's easy to
stop your credit card company
from putting your rate up at all.

406
00:26:40,040 --> 00:26:45,680
All you have to do is tell them
you're closing the account within
60 days of receiving the letter.

407
00:26:45,680 --> 00:26:49,360
That way, the credit card company
won't be able to put your rate up

408
00:26:49,360 --> 00:26:52,880
and you can continue to pay off
your debt at the existing rate.

409
00:26:52,880 --> 00:26:56,960
Just be aware, you won't be able
to spend on the card any longer.

410
00:26:56,960 --> 00:27:02,680
You don't just have to put up with
a rate rise, you can move your
credit card balance to a 0% card,

411
00:27:02,680 --> 00:27:05,520
which means you won't pay
any interest for a year or more.

412
00:27:05,520 --> 00:27:09,040
Just be aware that these cards
can be quite difficult to get

413
00:27:09,040 --> 00:27:12,280
so it's worth checking your
credit record before you apply.

414
00:27:12,280 --> 00:27:14,640
If you're struggling with debt
and you don't think

415
00:27:14,640 --> 00:27:17,600
you'll be able to pay off
the card or stop spending on it,

416
00:27:17,600 --> 00:27:20,920
then the first thing to do
is to consult a free debt charity

417
00:27:20,920 --> 00:27:23,360
like Citizen's Advice or the CCCS.

418
00:27:23,360 --> 00:27:29,960
These charities will intercede on
your behalf and stop the credit card
company from jacking up your rate.

419
00:27:31,840 --> 00:27:36,560
The battle for your hard-earned
cash is well and truly on.

420
00:27:36,560 --> 00:27:38,080
With every penny counting,

421
00:27:38,080 --> 00:27:40,960
we're here to make sure
you're not being ripped off.

422
00:27:40,960 --> 00:27:43,920
And you've certainly
been keeping us busy!

423
00:27:50,000 --> 00:27:55,000
We've had literally thousands of
letters from you since the last
series of Rip-Off Britain,

424
00:27:55,000 --> 00:27:58,640
and I want you to know how much we
appreciate you taking the trouble,

425
00:27:58,640 --> 00:28:03,200
but an increasing number of those
have been about planning
for your financial future.

426
00:28:03,200 --> 00:28:08,960
Knowing how to invest your money
to ensure a comfortable retirement
is far from easy.

427
00:28:08,960 --> 00:28:12,880
It's still a good idea to pay
money into a pension because you'll

428
00:28:12,880 --> 00:28:15,400
need a nest-egg,
you'll need money to live off

429
00:28:15,400 --> 00:28:18,560
when you either can't
or don't want to carry on working.

430
00:28:18,560 --> 00:28:22,440
For most people, a pension will
be the most efficient way to do this,

431
00:28:22,440 --> 00:28:25,960
mainly because of the tax breaks
the government gives you.

432
00:28:25,960 --> 00:28:30,920
The government tops up the money
you put into it and the money
in the pension grows tax-free.

433
00:28:30,920 --> 00:28:34,520
There are two main types of pension.
You've got final-salary schemes,

434
00:28:34,520 --> 00:28:37,320
set up by companies on behalf
of their employees.

435
00:28:37,320 --> 00:28:40,440
It's up to your employer to make
sure there's enough money

436
00:28:40,440 --> 00:28:43,760
in the pension scheme to deliver
the pension they promised to you.

437
00:28:43,760 --> 00:28:47,240
If you're in a final-salary scheme,
you're doing well.

438
00:28:47,240 --> 00:28:53,880
The other kind is a money-purchase
pension like a personal pension
or a stakeholder plan.

439
00:28:53,880 --> 00:28:58,720
With these, you control how
much money gets paid in,
but how much income you get out

440
00:28:58,720 --> 00:29:06,000
of the other end depends on the level
of charges being deducted and the
investment performance of the funds.

441
00:29:06,000 --> 00:29:10,160
It's important to take control
of your retirement savings.

442
00:29:10,160 --> 00:29:13,040
In some cases it might make
sense to move your pension.

443
00:29:13,040 --> 00:29:16,160
If you're in a final-salary scheme,
you almost certainly shouldn't

444
00:29:16,160 --> 00:29:19,000
because these schemes
come with strong guarantees.

445
00:29:19,000 --> 00:29:22,120
With a money-purchase pension,
it might make sense to move it

446
00:29:22,120 --> 00:29:25,360
to get lower charges or
to get better investment performance,

447
00:29:25,360 --> 00:29:26,680
but there are pitfalls.

448
00:29:26,680 --> 00:29:31,200
You need to watch out for penalties
for moving money out of a pension,

449
00:29:31,200 --> 00:29:34,800
you need to watch out for charges
moving money into a new pension.

450
00:29:34,800 --> 00:29:39,280
When you get to retirement, if you've
got a money-purchase pension plan,

451
00:29:39,280 --> 00:29:43,280
you'll need to convert that money
into a retirement income.

452
00:29:43,280 --> 00:29:47,600
Research the market, make sure you're
getting the best income you possibly

453
00:29:47,600 --> 00:29:51,680
can from those savings because
the difference between one company

454
00:29:51,680 --> 00:29:55,880
and another could add thousands
of pounds on to your retirement
income for the rest of your life.

455
00:29:58,880 --> 00:30:03,760
For much of today, we've been
putting bank overdraft charges
in the spotlight and we've seen

456
00:30:03,760 --> 00:30:09,360
just how much they can add up to
if you allow your account to go
into the red without permission.

457
00:30:09,360 --> 00:30:11,800
Fees for using an
overdraft for direct debit

458
00:30:11,800 --> 00:30:16,840
which are honoured by the bank,
and for any payments that bounce,
are of course to be expected.

459
00:30:16,840 --> 00:30:22,680
As a result, even
the smallest of financial mishaps
can have devastating consequences.

460
00:30:28,720 --> 00:30:30,400
You need to brush your teeth.

461
00:30:30,400 --> 00:30:36,320
Part-time nurse Donna MacLeod
lives with her husband and three
children just outside Glasgow.

462
00:30:36,320 --> 00:30:40,840
Donna says they're
careful with their money
and try to make every penny count.

463
00:30:40,840 --> 00:30:46,880
Is your money in your bag? We're just
a kind of normal everyday family.

464
00:30:46,880 --> 00:30:50,200
We don't have
frivolous holidays away,

465
00:30:50,200 --> 00:30:55,120
we don't dress in designer clothes,
we don't have a lot
of disposable income,

466
00:30:55,120 --> 00:30:59,720
but we managed our money carefully,
we watched what we were doing
with our money.

467
00:30:59,720 --> 00:31:02,920
It wasn't that we were just
spending it on a lot of rubbish.

468
00:31:02,920 --> 00:31:06,880
When Donna had her youngest child,
she reduced her working hours,

469
00:31:06,880 --> 00:31:11,600
but with a smaller income
and a young family to look after,
things began to slip.

470
00:31:13,680 --> 00:31:19,200
Life was quite hectic so we
weren't paying as much attention
perhaps as you should be.

471
00:31:19,200 --> 00:31:24,720
Maybe one month you'd find
you had maybe overspent by £30, £40.

472
00:31:24,720 --> 00:31:31,320
Then the bank would come
in a month later and tell you you
were being charged for them.

473
00:31:31,320 --> 00:31:35,320
The charges did represent far more
than the amount of money that

474
00:31:35,320 --> 00:31:41,640
we had gone over, so we found these
charges started to snowball on us.

475
00:31:41,640 --> 00:31:49,560
As their debt increased,
the family were charged up to £60
for each transaction by their bank.

476
00:31:49,560 --> 00:31:54,960
Effectively, that equalled
one cheque that you had written
and that cheque could had been

477
00:31:54,960 --> 00:32:02,680
for £13, and yet you were actually
getting charged in some cases between
£50 and £60 for that one cheque.

478
00:32:02,680 --> 00:32:07,120
But the MacLeods aren't the only
ones facing high overdraft charges.

479
00:32:07,120 --> 00:32:11,560
According to the finance
information service, Money Facts,

480
00:32:11,560 --> 00:32:15,440
overdraft rates at their
highest level for a decade.

481
00:32:15,440 --> 00:32:22,320
We did on occasion phone the banks
to say to them, you have actually
charged us four times this month,

482
00:32:22,320 --> 00:32:27,080
and a couple of those charges
could have been for
bank charges themselves.

483
00:32:27,080 --> 00:32:30,920
So although our account is sitting
within its agreed limit,

484
00:32:30,920 --> 00:32:37,080
the bank charges would be applied
and then we'd be charged for the bank
charges taking us into the overdraft.

485
00:32:37,080 --> 00:32:40,840
So that used to get us
absolutely infuriated.

486
00:32:40,840 --> 00:32:44,240
Donna had three accounts
with the bank after it initially

487
00:32:44,240 --> 00:32:48,560
suggested this would be a good way
to manage the family's money.

488
00:32:48,560 --> 00:32:52,720
The charges themselves,
in some months we could have

489
00:32:52,720 --> 00:32:56,760
five or six charges, now that
could sit between three accounts.

490
00:32:56,760 --> 00:33:00,960
We were getting hammered constantly
for charges from month to month

491
00:33:00,960 --> 00:33:03,440
and we felt we could do
nothing about it.

492
00:33:03,440 --> 00:33:09,480
The MacLeods started to try
new ways of raising money
to pay for their bank charges.

493
00:33:09,480 --> 00:33:14,160
It was a case of, OK, well, we'll
have to find these charges because

494
00:33:14,160 --> 00:33:18,520
if we don't have the money for them,
we'll get more charges
so what can we do?

495
00:33:18,520 --> 00:33:23,240
What we did was we just decided
we need to do a car boot sale
or something like that

496
00:33:23,240 --> 00:33:26,080
and see if we could get rid
of some of the kids' stuff.

497
00:33:27,280 --> 00:33:29,560
Excuse me, how much
is it for your CD?

498
00:33:29,560 --> 00:33:33,120
Eventually Donna and George
made a drastic decision.

499
00:33:33,120 --> 00:33:38,560
It was the only way they could
think of to service the debt
and make a fresh start.

500
00:33:38,560 --> 00:33:41,600
That's great. Thank you.

501
00:33:41,600 --> 00:33:48,720
We had suffered the charges
for a solid period of about
three years, four years maybe.

502
00:33:48,720 --> 00:33:51,760
Over the course of that time,
it worked out

503
00:33:51,760 --> 00:33:56,160
at nearly £3,000 worth of charges.
How can the bank expect

504
00:33:56,160 --> 00:34:01,040
any normal family to absorb
£3,000 worth of charges?

505
00:34:01,040 --> 00:34:05,160
We didn't have the income,
the disposable income to do that,

506
00:34:05,160 --> 00:34:08,600
so we felt we had no option
but to remortgage our house

507
00:34:08,600 --> 00:34:11,560
and pay things off once and for all.

508
00:34:11,560 --> 00:34:18,000
Donna took legal advice and even
went to court to try to reclaim
some of the bank's charges.

509
00:34:18,000 --> 00:34:22,760
We managed to get a settlement on
one account's worth of charges

510
00:34:22,760 --> 00:34:26,080
and that was only because
it was a small amount.

511
00:34:26,080 --> 00:34:33,960
The amount that totalled
in that account was £545
so that did get settled,

512
00:34:33,960 --> 00:34:37,720
but the other two larger
amounts were still outstanding.

513
00:34:37,720 --> 00:34:41,120
Despite having moved house
and cleared all the charges,

514
00:34:41,120 --> 00:34:44,840
Donna still feels very angry
at how she was treated.

515
00:34:44,840 --> 00:34:49,400
I want everybody to continue to
keep the fight up against the banks

516
00:34:49,400 --> 00:34:53,040
because, if they get away
with it, it'll continue to happen.

517
00:34:53,040 --> 00:34:55,840
If everybody does their bit
and challenges the bank,

518
00:34:55,840 --> 00:34:59,960
hopefully they'll be forced
to look at it and look at
reducing their charges.

519
00:34:59,960 --> 00:35:05,960
Donna has advice for anyone
who may find themselves
in a similar situation to her.

520
00:35:05,960 --> 00:35:09,920
Anybody that's experiencing
high levels of charges from the bank,

521
00:35:09,920 --> 00:35:14,080
or anybody that has got a case
sitting in court and they've
decided just to leave it

522
00:35:14,080 --> 00:35:18,000
now that they're reading papers and
don't think it's worthwhile pursuing,

523
00:35:18,000 --> 00:35:20,760
I'd strongly recommend
that you do pursue it.

524
00:35:20,760 --> 00:35:26,400
Today I'm here at the headquarters
of the British Bankers Association
in the heart of the City of London,

525
00:35:26,400 --> 00:35:30,120
and I'm joined by Eric Leenders,
the executive director

526
00:35:30,120 --> 00:35:33,040
of retail banking policy.
Good to see you, Eric.

527
00:35:33,040 --> 00:35:37,880
I want to talk today about
unauthorised overdrafts because

528
00:35:37,880 --> 00:35:41,960
we have so many cases in
our briefcase, if you like,

529
00:35:41,960 --> 00:35:46,000
where people are charged
one heck of a lot of money

530
00:35:46,000 --> 00:35:50,920
for a very small overdraft, maybe
as little as 8p. How can that be?

531
00:35:50,920 --> 00:35:53,400
It's difficult for me to talk
about specifics,

532
00:35:53,400 --> 00:35:56,800
but frankly it shouldn't be that
if you're a matter of pennies
overdrawn,

533
00:35:56,800 --> 00:36:00,240
you end up being charged pounds.
The way that different banks

534
00:36:00,240 --> 00:36:05,840
have approached that differs, but
some have buffer zones for example,

535
00:36:05,840 --> 00:36:10,200
some look to establish a formal
overdraft facility with you

536
00:36:10,200 --> 00:36:13,840
at the time you open your account
or start to borrow.

537
00:36:13,840 --> 00:36:18,240
I would say that in those
circumstances, when it's clear that

538
00:36:18,240 --> 00:36:22,560
whatever the fail-safe mechanism the
bank has put in place hasn't worked,

539
00:36:22,560 --> 00:36:25,920
then you're perfectly
within your rights

540
00:36:25,920 --> 00:36:29,800
to pick up the phone to your bank,
explain the circumstances,

541
00:36:29,800 --> 00:36:35,960
and look to them to make sure you're
not charged disproportionately.

542
00:36:35,960 --> 00:36:41,720
It's that word disproportionate
though, that's the key to the whole
subject of unauthorised overdrafts.

543
00:36:41,720 --> 00:36:43,240
I've just picked out a few.

544
00:36:43,240 --> 00:36:50,480
That 8p I spoke about ended up being
a charge of £215.92 - ridiculous.

545
00:36:50,480 --> 00:36:56,040
£65 for an overdraft by accident
of £23.49,

546
00:36:56,040 --> 00:37:00,600
and then we come to this aspect
of charging £5 a day.

547
00:37:00,600 --> 00:37:05,360
Now, supposing somebody
was outside the country
and being charged £5 a day

548
00:37:05,360 --> 00:37:08,520
without notification on
a relatively small overdraft,

549
00:37:08,520 --> 00:37:11,400
that could end up a fortune
by the time they get back.

550
00:37:11,400 --> 00:37:16,760
Again, difficult to talk about
specifics, but clearly
in some of those case studies

551
00:37:16,760 --> 00:37:21,240
the mechanisms in place to make sure
that those sort of charges shouldn't

552
00:37:21,240 --> 00:37:24,480
be taken have not worked,
so for those customers

553
00:37:24,480 --> 00:37:27,520
it's worth having a conversation
with their banks.

554
00:37:27,520 --> 00:37:30,760
There's a range of different
fee structures out there now

555
00:37:30,760 --> 00:37:34,720
so we've worked with the Office
of Fair Trading to ensure there are

556
00:37:34,720 --> 00:37:38,040
half-a-dozen case-studies
on each bank's website

557
00:37:38,040 --> 00:37:42,040
to make it easier for you to compare
the one charging structure

558
00:37:42,040 --> 00:37:46,400
to the other because it might not
be that immediately apparent.

559
00:37:46,400 --> 00:37:48,200
It all ends up though, of course,

560
00:37:48,200 --> 00:37:52,080
if you anticipate that you're
going to need to borrow money,

561
00:37:52,080 --> 00:37:57,000
it always pays
to have that discussion
in advance of borrowing money.

562
00:37:57,000 --> 00:37:59,720
Absolutely it's the case
that some people

563
00:37:59,720 --> 00:38:03,640
don't necessarily anticipate
that they want to go overdrawn

564
00:38:03,640 --> 00:38:07,200
so there's the ability to go
overdrawn without arrangement.

565
00:38:07,200 --> 00:38:12,720
Equally, some would prefer
the discipline of not being able

566
00:38:12,720 --> 00:38:16,080
to go overdrawn without arrangement
and that's something

567
00:38:16,080 --> 00:38:19,800
we've been working on with
the Office of Fair Trading

568
00:38:19,800 --> 00:38:25,200
so that banks will shortly look to
launch a series of current accounts

569
00:38:25,200 --> 00:38:31,400
where it won't be possible
for you to go overdrawn
without arranging that first.

570
00:38:31,400 --> 00:38:35,320
It'll be a little bit more...
It'll have more to offer

571
00:38:35,320 --> 00:38:38,920
by way of functionality
than a basic bank account,

572
00:38:38,920 --> 00:38:42,440
but at the same time it won't
let you go overdrawn,

573
00:38:42,440 --> 00:38:46,320
and it'll help you to stay
in control of your finances.

574
00:38:46,320 --> 00:38:50,120
I'll give you another example, which
I ripped out of our case studies.

575
00:38:50,120 --> 00:38:51,760
A man called Terry,

576
00:38:51,760 --> 00:38:57,000
abroad on holiday for a month,
a man who's not short of money.

577
00:38:57,000 --> 00:38:59,200
He left some cheques
for his children.

578
00:38:59,200 --> 00:39:02,440
£23 overdraft by mistake because of
school fees,

579
00:39:02,760 --> 00:39:06,520
overwrote the cheque, he gets back
after his month's holiday

580
00:39:06,520 --> 00:39:12,520
to find he's being forced to pay
£65 for the £23 that he's
accidentally gone over.

581
00:39:12,520 --> 00:39:14,000
His argument is,

582
00:39:14,000 --> 00:39:17,600
you only use the post to get in
touch with him - he's abroad.

583
00:39:17,600 --> 00:39:21,600
Why not use the e-mail address
that the bank has or the telephone?

584
00:39:21,600 --> 00:39:25,600
Let him know! Give him the
information so he can address it.

585
00:39:25,600 --> 00:39:28,240
I can understand
that that's frustrating.

586
00:39:28,240 --> 00:39:35,160
We typically say that we would
communicate with our customers
on the basis that they prefer.

587
00:39:35,160 --> 00:39:39,400
If they elect to use the internet
and e-mail, we'd use that.

588
00:39:39,400 --> 00:39:43,760
If they prefer to use the post,
that's typically what we'd do.

589
00:39:43,760 --> 00:39:47,800
In those circumstances, clearly
with the individual overseas,

590
00:39:47,800 --> 00:39:51,520
it's unfortunate that the overdraft
hasn't been picked up.

591
00:39:51,520 --> 00:39:53,920
A number of banks
now provide text alerts,

592
00:39:53,920 --> 00:39:59,240
and if that customer was to use
that type of product,

593
00:39:59,240 --> 00:40:01,280
he'd have had that sort of alert,

594
00:40:01,280 --> 00:40:05,480
which would have enabled him to
adjust his finances accordingly.

595
00:40:05,480 --> 00:40:08,240
Again, do shop around.
If those sorts of aspects of

596
00:40:08,240 --> 00:40:10,600
the Personal Current Account
are important,

597
00:40:10,600 --> 00:40:13,080
there's probably a product
out there to help you.

598
00:40:13,080 --> 00:40:16,800
At the end of it all, assessing
the letters we've had,

599
00:40:16,800 --> 00:40:19,920
and we've had many
about banking in general,

600
00:40:19,920 --> 00:40:26,320
the conclusion is that it's the lack
of service, the lack of care really,

601
00:40:26,320 --> 00:40:29,840
the lack of information,
the lack of transparency.

602
00:40:29,840 --> 00:40:32,880
It seems to be that everything is
going in the direction of the banks

603
00:40:32,880 --> 00:40:36,240
and nothing is going to
the way of the customer.

604
00:40:36,240 --> 00:40:39,280
I think I'd say that's
an unfair assertion.

605
00:40:39,280 --> 00:40:43,000
I absolutely respect that
for some people

606
00:40:43,000 --> 00:40:47,320
some things will go wrong,
and that's a regrettable

607
00:40:47,320 --> 00:40:53,000
but inevitable consequence of
serving 90% plus of the population.

608
00:40:53,000 --> 00:40:56,240
At the end of it all, do you know
what I think people really want

609
00:40:56,240 --> 00:40:59,040
these days, in unsure times,
in times of recession?

610
00:40:59,040 --> 00:41:02,560
They want information
and service, they want care.

611
00:41:02,560 --> 00:41:05,480
What we're trying to do is
deliver on both of those.

612
00:41:05,480 --> 00:41:09,240
Hopefully, as we see these
new initiatives taking place,

613
00:41:09,240 --> 00:41:13,640
as we see the transparency, as we
see the work we're doing around

614
00:41:13,640 --> 00:41:17,760
helping people in debt,
people will recognise the banks
are stepping up to the plate,

615
00:41:17,760 --> 00:41:21,600
changing products and services
to reflect what
customers want from them.

616
00:41:21,600 --> 00:41:25,120
Eric, I'll be back to see you
in six months. Thank you.

617
00:41:26,240 --> 00:41:30,680
It certainly seems from the stories
you've shared with us today that

618
00:41:30,680 --> 00:41:36,920
it's very easy for a small
banking error to escalate into
something much bigger.

619
00:41:36,920 --> 00:41:40,280
The Office of Fair Trading
may think bank charges are unfair

620
00:41:40,280 --> 00:41:43,360
and even the Government's
Business Secretary may believe

621
00:41:43,360 --> 00:41:46,760
they're ripping us off, but
it looks as if they're here to stay.

622
00:41:46,760 --> 00:41:50,720
Which is why it's absolutely vital
to scrutinise your bank statements

623
00:41:50,720 --> 00:41:54,720
and be crystal clear on what money
you have in which account.

624
00:41:54,720 --> 00:42:01,680
With so many penalty charges around
these days, you can't afford to get
caught out and lose vital money. 

625
00:42:01,680 --> 00:42:03,720
It's too hard to get
in the first place.

626
00:42:03,720 --> 00:42:06,160
That's where we have
to leave it for today.

627
00:42:06,160 --> 00:42:10,960
I hope you'll join us again
when we'll have many more
of your stories on Rip-Off Britain.

628
00:42:30,360 --> 00:42:34,400
Subtitles by Red Bee Media Ltd

629
00:42:34,400 --> 00:42:37,920
E-mail subtitling@bbc.co.uk