'We put the word out, asking you to tell us about the rip-offs that make you rage.
'And you didn't let us down!'
It's sharp practice, that's what it is.
'There isn't a story too small
'or an issue that we feel we can't take up on your behalf.'
Who can you rely on?
People out there believe they are being ripped off
and indeed we are. We are rip-off Britain.
You've contacted us in your thousands.
You've written, emailed and even stopped us in the street!
It's a blatant rip-off.
I feel aggrieved by it.
Somebody's making a very lot of money on this.
Somebody should take that up.
We've travelled the length and breadth of the UK to hear your stories.
Now it's time for us to investigate on your behalf.
This is Rip-Off Britain.
Hello and welcome to Rip-Off Britain,
the programme that investigates your consumer complaints.
These are tough financial times but after being pushed to the brink,
it seems that our banks are bouncing back.
Yes, profits, on the whole, are up.
But judging by the letters you've been sending us,
your levels of customer satisfaction are not.
Absolutely. The credit crunch has forced many of us to become much more financially aware.
Value for money has never, ever been more important.
But the big question is, are you getting that value?
Also on today's show, the consumers making their own lives more difficult
by not reading the small print.
Plus paying the price for being overdrawn.
And waste not, want not.
The utility bills that just don't add up.
As a nation, we work hard for our money
and at Rip-Off Britain, we believe every penny that goes out should be a penny well spent.
But you've been letting us know that that is not always the case.
The Business Secretary, Vince Cable,
recently said that he believes that British banks are ripping off their customers.
He's blamed it on a lack of competition in the sector,
pointing out that banking is dominated by just a handful of very big players.
One of his biggest concerns
is something that you've contacted us about in your droves -
charges for unauthorised overdrafts.
You come and score, Ollie.
If you were a bank manager, Terence King-Smith is the kind of man
you'd want on your team.
He's paid off his mortgage and he keeps a close eye on his finances.
I think I'm a pretty good customer. I always keep funds in the domestic account,
I've only been overdrawn once in many, many years.
I use the bank's services for direct debits.
In fact, the fewer cheques I have to write, the better.
The cheques Terence tries to tackle first
are the ones he sends to help with his grandchildren's school fees.
I've got ample funds to support a lifestyle
and, in fact, help my children and grandchildren enjoy their lives as well.
I was very lucky when I was younger. I had a grandmother
who ensured that I got a good education
and I feel I should do the same for my family.
Terence has a separate bank account for his grandchildren's schooling
and as a system it's always worked well.
Until, that is, earlier this year.
We went on holiday for quite a long trip
that included Christmas.
We were due back towards the end of January.
I had already made arrangements
for these cheques to be in the hands of my children to pay the fees,
and arrangements for the bank to transfer the funds into the second account.
But while Terence was cultivating his sun tan,
he was blissfully unaware that the transfer had fallen short,
sending him £24 into the red.
He was also in the dark about the cost of this unauthorised overdraft,
which was going up by five pounds every day.
By the time he returned home, his original bill of £24
had risen to 65.
I was annoyed with the bank that there had been a delay
in being notified about it because I'd been away.
I felt that if they needed to tell me about something as serious as this,
they could perhaps engage other forms of communication.
They could have used email, they could have used my mobile phone
and then I could have picked up the information immediately and done something about it.
Convinced the bank would see reason, Terence acted immediately.
I wrote to the bank and said I thought this was entirely disproportional
to the £24 or so that I'd gone overdrawn
and it wasn't going to become a bad debt,
would they please reconsider.
The answer is, "No, that's it."
Undeterred, Terence unloaded his problems to the financial ombudsman.
He was surprised to hear that these charges were perfectly legal.
He was left with no choice but to pay up before his costs rose even further.
I was fortunate in being able to settle this quite quickly.
I can quite understand that someone on a much tighter budget
would find it very difficult to keep finding the extra funds
while this sum of money was piling up.
For many families, £65 could easily represent their weekly shopping.
If they have a family, then it's obviously vital
that they don't waste that kind of money.
Fruit? Yes, please. Yes, please.
For Terence, the whole incident has left a bad taste in his mouth.
The amount they charged on this occasion and could have charged even more
if I hadn't come home on the 19th of January,
is out of all proportion to what I had done wrong.
I don't agree that people should be allowed to get away with such exorbitant charges.
And this isn't the only type of bank charge that you think is exorbitant.
Later in the show, we'll reveal more of the banking bills that are making you see red.
When the cost of our most basic amenities, such as electricity, gas and water,
creep up year on year,
it doesn't come as a huge surprise because we know the cost of living is on the up.
But how would you feel if one of your bills
increased by 7,500% in just two years?
It almost beggars belief.
But for some villagers near Romsey in Hampshire,
it is all too real.
Come on, then!
Michael Walder lives on a small estate in Awbridge.
We've lived here since 1970
and the area is perfect. We don't want to move.
There's no vandalism on the estate.
It's a quiet estate and we're quite happy.
But there's a fly in the ointment. The sewage collection on this estate
isn't dealt with by a water company as it is in most urban areas.
Instead, it's removed by a private housing association,
Testway Housing.
The residents aren't happy with what they're being charged.
The treatment plant is situated down the bottom of the circle
round by the back of the garages.
As you can see, it's 40 years old now.
The bills started rising
about two years ago.
We suddenly had a jump of 200-plus from the year before.
Then this year, it done another jump of 200.
We got a bit concerned that we were paying for something that we didn't know anything about.
The residents of Awbridge pay around £700 a year
to have their sewage dealt with, almost twice the national average
for both sewage removal and water rates.
It means that every time the Walders flush their toilet,
ten pence is going down the drain.
And Michael's had enough.
He's decided to get the whole community involved
to try to challenge the charges.
It just goes up and up and up.
What scares me is not so much what it is now
but if you took that for ten years, a 40% increase year on year,
it's about £14,000, your annual sewage bill.
I'm an old age pensioner and I'm living on my pension and also my savings.
Eventually, if they keep putting the sewerage up,
then I won't be able to afford it.
I don't know how long we'll be able to stay where we are.
The villagers have even got local MP Caroline Noakes on board.
But because Testway is a private company,
it doesn't fall under the remit of the national water regulator, Ofwat.
There seems to be an enormous discrepancy between the amount paid by some householders.
Some residents pay nothing to have waste water taken away.
Others are paying £700 a year
and in the case of Awbridge, the school is paying roughly the same as a private house would.
I think we can all appreciate that there are about 100 pupils at Awbridge primary school
all flushing that loo a lot more than a private household would.
So how do Testway justify the price discrepancies?
Providing sewage treatment within a rural area
is a very expensive thing to do, especially when you're not connected
to the mains.
The charges that we pass on to the local community for their sewage treatment
just reflect the costs that we face.
We pass on what it costs us and not a penny more. Now, over time,
the costs have gone up.
But, as I say, they reflect what it costs us. Every year,
we work out what we think it's going to cost us
and actually, the majority of years,
it's actually ended up costing residents less than what we thought.
Less than expected, maybe,
but still over the odds.
And what frustrates the residents even more
is the fact that Testway isn't even supposed to run the sewage works.
Under the Flood and Water Management Act,
the regulated company Southern Water is supposed to take the service on.
But that hasn't happened yet.
We've been waiting now for nearly 12 - it will be - 12 years,
since 2000 when they said it was going to be taken over.
It's the uncertainty. We don't know what's going to happen next week or next year.
They can do anything they like.
And we can't do anything. We're stuck.
So, what's the hold-up?
Time to ask Southern Water for answers.
We were quite happy to take it over as soon as possible,
but it depends on whether the plant has its environmental consents
and that isn't the case.
If a plant doesn't have its environmental permits,
we risk prosecution, so we have to protect our interests
and the interests of our customers who would have to pay for repairs or upgrades.
The latest news we heard via Testway and the agency is that it might be 2012.
But if these things can be speeded up, if the plant gets its permits,
if it operates correctly with the right environmental standards,
then fine, Southern Water are happy to take it over.
So there may soon be light at the end of the tunnel for Michael and the rest of the Awbridge residents.
But Caroline Noakes has warned that their experience
could be repeated elsewhere.
There are a number of smaller schemes in more remote locations
that will never be able to be brought up to the standard to be adopted by Southern Water.
For those people, this problem will prevail.
Water and sewerage services are something every household needs.
But bills can vary hugely depending on where you live.
And it isn't always clear exactly what you're paying for.
Clare Francis from Moneysupermarket has more.
The thing is, not all properties in the country
are connected to the mains drainage system.
So some households have to have their own private sewerage disposal
in the garden, often a septic tank.
As a property owner, you're responsible for the removal of that waste.
There are a number of companies that offer this service
and will get rid of it for you.
Make sure they're registered with the Environment Agency first.
As with all services, charges do vary,
so it's worth calling a number of firms before you decide which one to go with.
Some will charge a flat fee,
others will do a quotation based on individual circumstances,
the size of the tank, where they can park in relation to it.
It's important you know exactly what's included in the quotation.
Don't assume a septic tank in the garden is a more expensive way of getting rid of waste
than if you were connected to the mains.
The recommendation is you have a septic tank emptied at least once a year
if you're a family of four.
You're looking probably to expect to pay around 120 to 150 quid to have it emptied.
Counter that to the cost of being connected to the main drainage
where you'd probably pay about £300 a year for waste disposal,
actually septic tanks aren't necessarily that expensive.
Still to come on Rip-Off Britain:
the plastic that isn't fantastic!
How to know if you've been rate-jacked.
And planning your financial future.
What you need to know to ensure you are not ripped off.
Earlier, we heard from Angela just how quickly costs can mount
if we get overdrawn without permission.
In fact, penalty charges are thought to cost us around - wait for it - three billions pounds every year!
It's a staggeringly high figure,
but it doesn't surprise one of our viewers, Sean Murray.
Lift it over the net!
Sean Murray is a father of one. He keeps himself busy running two businesses
including a tennis coaching school.
Get back there, Katie, you can do it! Good!
Like any business owner, Sean understands the importance and value of money.
Move, balance, hit. Great!
He doesn't like to feel he's getting a raw deal.
Don't forget, boys and girls,
when you're older and you open a bank account, do not go overdrawn!
Cos you'll get ripped off by the banks in the British system.
Having joined his bank over 20 years ago,
Sean could be forgiven for thinking it would aim high when it came to returning his loyalty.
You would think, as a customer of any sort of business, bank or otherwise,
that if you've been a customer since you were like seven-years-old,
and I'm now 37,
it's been about that length of time, you would gain a lot of loyalty, not just a bit, but a lot of loyalty.
But recently he was left in no doubt
that the ball was well and truly in his bank's court.
I thought I still had £10 left in there. It turned out I had nine pounds left.
I went and got a meal from McDonalds as I was rushing between clients,
and I spent £9.08, so that put me eight pence overdrawn.
Little did Sean know just how much that fast-food meal would end up costing him
in the long run.
I received a letter through the post saying I'm being charged £28 for being overdrawn.
I looked at my statement and saw that I was eight pence overdrawn.
I could not believe that anybody can charge somebody £28 for being eight pence overdrawn.
That's what 8p looks like.
I mean, come on! 8p?! 8p!
It's thought that 12 million of us get overdrawn without permission every year.
The fees charged for unauthorised borrowing
can vary from bank to bank.
And they can keep rising until you get your account out of the red.
'£28 doesn't sound a lot of money to a lot of people, I know that.
'At the time, though, I'd just set up a mobile valeting business'
and I've run a tennis coaching business for eight years.
Are you going to be a great tennis player?
'All the money I had coming in was going out in the running costs of the business.'
Every penny I had coming in was going out.
Sean asked the bank if there was anything he could do
to stop his charges from spiralling.
'They wouldn't let me close the account. I asked to freeze it.
Keep the account open, but freeze it.
I'll pay the £28 if you're going to charge me £28 for 8p,
which is ridiculous, but don't charge upon that cos we can't afford it.
I can get that money in a week or two.
They said, "We can't freeze it. Pay the charge or you'll be charged again. You're overdrawn by £28.08."
'That was the attitude. I put the phone down.'
And I'm fuming. And we can't pay it.
So, obviously, the next four or five months, it accumulates to £215.
What had started out as an eight pence overdraft
was now a bill for more than £200.
We decided we had to end this somehow.
We lent the money off a family friend who we paid back within about a week.
The bank specifically have lost out now because I've closed my account down.
We have a healthy profit coming in from the valeting business
and my tennis business now, and we'll be saving a lot of money.
Sean has vowed never to let his accounts fall into the red again.
And with some banks applying daily charges that can add up to
the equivalent of 3,000% APR,
he's determined that it won't be a case of game, set and match
for his bank ever again.
Come on, work it up.
That's a professional shot. Come on, work it up!
It's thought that around 30 million of us own a credit or charge card.
And, if that figure includes you,
you'll already know that they're rarely the cheapest way to borrow money.
What you might not be so familiar with, though,
is something called "rate-jacking".
It's a relatively new phenomenon,
but it's fast becoming the latest enemy in our battle against the banks.
Pinning down the best credit card rate
can be almost as tough as spotting an exotic species on the Thames,
as bird-watching enthusiast Rick Morris knows all too well.
I took it out several years ago with my bank
and it seemed a relatively good rate of interest at the time. I don't remember what it was.
But it has, I think, gone up over the years.
Earlier this year, Rick reached his credit limit of just over £6,000.
Like all too many of us,
he'd been paying off just the minimum amount every month.
I had a letter from the credit card provider
to say that my credit limit was being raised.
Not by a lot, it has to be said, I think by £650 to 6,800.
And I would assume it means they think I'm a good risk.
A good risk maybe. But the good news stopped there.
I had a letter to tell me the rate was going up
and I had no idea about this and there was no reason given for it, really.
It went suddenly from around 16% up to in excess of 20%.
A sort of 25% hike.
Rick was less than impressed with the explanation his credit card company gave him for the price hike.
They jack the rates up and customers have to like it or lump it. That's what it comes down to.
The official cost of borrowing has reached a record low this year.
But despite this, the interest rates charged on credit card debts
have continued to rise.
Quentin Barker, from Norwich, is another unhappy credit card customer.
I work for the highways department of Norfolk County Council.
My job involves going up and down the highways, inspecting for various problems, meeting people.
I can spend anything up to £150 a month just on fuel
and obviously I need to put this on my credit card.
I can, unfortunately, spend more in a month than I pay back sometimes.
That is the nature of credit cards, I'm afraid.
Quentin had been paying an interest rate of 24.9%,
which he thought was more than enough.
But then, out of the blue, they put it up to 28.9,
which is ridiculous!
When the bank rate is at an all-time low,
credit cards are putting their rates up!
I thought, "This is loan shark territory. This is ridiculous!"
Store cards don't charge this much and they're well known for being expensive.
I couldn't believe it, in all honesty. I really couldn't.
He contacted his bank to try and find out what was going on.
They told me I had been notified, although I hadn't noticed it because it was on the back of the statement.
You don't read the whole statement, you just look at the financial bits.
Maybe you should, but you don't.
I stopped using the card and I've since paid it off.
I won't deal with a company that does that to me, so I no longer use it.
Sandra Quinn of the UK Cards Association represents the credit card industry.
She says the rate rises are justified, even though bank base rates are at an all-time low.
There's no relation between interest rates and base rates.
An interest rate does include the base rate, but it also includes
other fees and charges that are the cost for a credit card company
of running a credit card. You've got the cost of providing fraud cover,
of providing a service. For most customers this is a free service.
61% of us pay off our credit card bills in full every month so we're getting this service free of charge.
So absolutely interest rates are part of that deal, but there's no relation to base rates and never has been.
For Rick, there was more bad news to come.
His second credit card was also being hit with an interest increase,
which meant his monthly repayments were about to rise sharply.
It seems to work out at something like £480 a year,
the increase in interest per card, so around about £1,000 extra.
It's all money in my pocket and that comes out of an earned income
after tax so effectively that means I need to earn another £1,500 a year just to keep paying the credit card.
Consumer experts advise people to take advantage of
interest free balance transfers, as long as we pay off the money we owe
before the deal comes to an end.
But, if like Rick, you have a poor credit history, shopping around isn't always an option.
I'm stuck with those interest rates.
I suppose, because I've had three cards and the total on those comes to about 26,000 on the credit cards,
and maybe they think that's more than enough.
We've invited debt specialist Refat Naz Dhar from the Money Advice Trust
to see what options there are for Rick and others like him.
Hello there. Hello, I'm Refat. Nice to meet you.
The first step for you that I would advise you to do is to work out an income and expenditure form.
You won't know until that stage whether you have enough money to cover your credit cards and loans
without using an overdraft, and without juggling other payments month to month.
Refat thinks that, if Rick's outgoings exceed what he has coming in,
he may need to consider using a special debt management service,
as long as it's a reputable one.
That's where you make a payment to a company
and they will distribute your payments to all of your creditors
for you, and deal with all of the negotiating for you.
We'd advise you to go to a free service like Consumer Credit Counselling Service
and Payplan, who wouldn't charge you anything for that service.
It's interesting to know that there are these companies that provide advice for free.
I didn't know they existed so that was totally new.
And...
Yes, very, very helpful to get that kind of advice.
And there may soon be even more help at hand.
The government recently announced a wide-reaching review of consumer borrowing,
and it's thought this could lead to a limit being placed on credit card interest rates.
We'll know for sure if it's on the cards some time next year.
In the meantime, Rick and the rest of us will just have to keep coughing up.
It's thought there are more credit cards in Britain than there are people.
These aren't all mine by the way!
So the chances are most of you will own one.
What do you need to know to avoid being rate-jacked?
Donna Ferguson from Love Money has been on the case.
If you get a letter from your credit card company telling you
you're rate is going up, you're entitled to demand an explanation.
What's more, they can't put a rate up more than once every six months.
If you took out a card less than 12 months ago, and they didn't tell you
about the rate hike at the time, they can't put your rate up at all.
The good news is it's easy to stop your credit card company from putting your rate up at all.
All you have to do is tell them you're closing the account within 60 days of receiving the letter.
That way, the credit card company won't be able to put your rate up
and you can continue to pay off your debt at the existing rate.
Just be aware, you won't be able to spend on the card any longer.
You don't just have to put up with a rate rise, you can move your credit card balance to a 0% card,
which means you won't pay any interest for a year or more.
Just be aware that these cards can be quite difficult to get
so it's worth checking your credit record before you apply.
If you're struggling with debt and you don't think
you'll be able to pay off the card or stop spending on it,
then the first thing to do is to consult a free debt charity
like Citizen's Advice or the CCCS.
These charities will intercede on your behalf and stop the credit card company from jacking up your rate.
The battle for your hard-earned cash is well and truly on.
With every penny counting,
we're here to make sure you're not being ripped off.
And you've certainly been keeping us busy!
We've had literally thousands of letters from you since the last series of Rip-Off Britain,
and I want you to know how much we appreciate you taking the trouble,
but an increasing number of those have been about planning for your financial future.
Knowing how to invest your money to ensure a comfortable retirement is far from easy.
It's still a good idea to pay money into a pension because you'll
need a nest-egg, you'll need money to live off
when you either can't or don't want to carry on working.
For most people, a pension will be the most efficient way to do this,
mainly because of the tax breaks the government gives you.
The government tops up the money you put into it and the money in the pension grows tax-free.
There are two main types of pension. You've got final-salary schemes,
set up by companies on behalf of their employees.
It's up to your employer to make sure there's enough money
in the pension scheme to deliver the pension they promised to you.
If you're in a final-salary scheme, you're doing well.
The other kind is a money-purchase pension like a personal pension or a stakeholder plan.
With these, you control how much money gets paid in, but how much income you get out
of the other end depends on the level of charges being deducted and the investment performance of the funds.
It's important to take control of your retirement savings.
In some cases it might make sense to move your pension.
If you're in a final-salary scheme, you almost certainly shouldn't
because these schemes come with strong guarantees.
With a money-purchase pension, it might make sense to move it
to get lower charges or to get better investment performance,
but there are pitfalls.
You need to watch out for penalties for moving money out of a pension,
you need to watch out for charges moving money into a new pension.
When you get to retirement, if you've got a money-purchase pension plan,
you'll need to convert that money into a retirement income.
Research the market, make sure you're getting the best income you possibly
can from those savings because the difference between one company
and another could add thousands of pounds on to your retirement income for the rest of your life.
For much of today, we've been putting bank overdraft charges in the spotlight and we've seen
just how much they can add up to if you allow your account to go into the red without permission.
Fees for using an overdraft for direct debit
which are honoured by the bank, and for any payments that bounce, are of course to be expected.
As a result, even the smallest of financial mishaps can have devastating consequences.
You need to brush your teeth.
Part-time nurse Donna MacLeod lives with her husband and three children just outside Glasgow.
Donna says they're careful with their money and try to make every penny count.
Is your money in your bag? We're just a kind of normal everyday family.
We don't have frivolous holidays away,
we don't dress in designer clothes, we don't have a lot of disposable income,
but we managed our money carefully, we watched what we were doing with our money.
It wasn't that we were just spending it on a lot of rubbish.
When Donna had her youngest child, she reduced her working hours,
but with a smaller income and a young family to look after, things began to slip.
Life was quite hectic so we weren't paying as much attention perhaps as you should be.
Maybe one month you'd find you had maybe overspent by £30, £40.
Then the bank would come in a month later and tell you you were being charged for them.
The charges did represent far more than the amount of money that
we had gone over, so we found these charges started to snowball on us.
As their debt increased, the family were charged up to £60 for each transaction by their bank.
Effectively, that equalled one cheque that you had written and that cheque could had been
for £13, and yet you were actually getting charged in some cases between £50 and £60 for that one cheque.
But the MacLeods aren't the only ones facing high overdraft charges.
According to the finance information service, Money Facts,
overdraft rates at their highest level for a decade.
We did on occasion phone the banks to say to them, you have actually charged us four times this month,
and a couple of those charges could have been for bank charges themselves.
So although our account is sitting within its agreed limit,
the bank charges would be applied and then we'd be charged for the bank charges taking us into the overdraft.
So that used to get us absolutely infuriated.
Donna had three accounts with the bank after it initially
suggested this would be a good way to manage the family's money.
The charges themselves, in some months we could have
five or six charges, now that could sit between three accounts.
We were getting hammered constantly for charges from month to month
and we felt we could do nothing about it.
The MacLeods started to try new ways of raising money to pay for their bank charges.
It was a case of, OK, well, we'll have to find these charges because
if we don't have the money for them, we'll get more charges so what can we do?
What we did was we just decided we need to do a car boot sale or something like that
and see if we could get rid of some of the kids' stuff.
Excuse me, how much is it for your CD?
Eventually Donna and George made a drastic decision.
It was the only way they could think of to service the debt and make a fresh start.
That's great. Thank you.
We had suffered the charges for a solid period of about three years, four years maybe.
Over the course of that time, it worked out
at nearly £3,000 worth of charges. How can the bank expect
any normal family to absorb £3,000 worth of charges?
We didn't have the income, the disposable income to do that,
so we felt we had no option but to remortgage our house
and pay things off once and for all.
Donna took legal advice and even went to court to try to reclaim some of the bank's charges.
We managed to get a settlement on one account's worth of charges
and that was only because it was a small amount.
The amount that totalled in that account was £545 so that did get settled,
but the other two larger amounts were still outstanding.
Despite having moved house and cleared all the charges,
Donna still feels very angry at how she was treated.
I want everybody to continue to keep the fight up against the banks
because, if they get away with it, it'll continue to happen.
If everybody does their bit and challenges the bank,
hopefully they'll be forced to look at it and look at reducing their charges.
Donna has advice for anyone who may find themselves in a similar situation to her.
Anybody that's experiencing high levels of charges from the bank,
or anybody that has got a case sitting in court and they've decided just to leave it
now that they're reading papers and don't think it's worthwhile pursuing,
I'd strongly recommend that you do pursue it.
Today I'm here at the headquarters of the British Bankers Association in the heart of the City of London,
and I'm joined by Eric Leenders, the executive director
of retail banking policy. Good to see you, Eric.
I want to talk today about unauthorised overdrafts because
we have so many cases in our briefcase, if you like,
where people are charged one heck of a lot of money
for a very small overdraft, maybe as little as 8p. How can that be?
It's difficult for me to talk about specifics,
but frankly it shouldn't be that if you're a matter of pennies overdrawn,
you end up being charged pounds. The way that different banks
have approached that differs, but some have buffer zones for example,
some look to establish a formal overdraft facility with you
at the time you open your account or start to borrow.
I would say that in those circumstances, when it's clear that
whatever the fail-safe mechanism the bank has put in place hasn't worked,
then you're perfectly within your rights
to pick up the phone to your bank, explain the circumstances,
and look to them to make sure you're not charged disproportionately.
It's that word disproportionate though, that's the key to the whole subject of unauthorised overdrafts.
I've just picked out a few.
That 8p I spoke about ended up being a charge of £215.92 - ridiculous.
£65 for an overdraft by accident of £23.49,
and then we come to this aspect of charging £5 a day.
Now, supposing somebody was outside the country and being charged £5 a day
without notification on a relatively small overdraft,
that could end up a fortune by the time they get back.
Again, difficult to talk about specifics, but clearly in some of those case studies
the mechanisms in place to make sure that those sort of charges shouldn't
be taken have not worked, so for those customers
it's worth having a conversation with their banks.
There's a range of different fee structures out there now
so we've worked with the Office of Fair Trading to ensure there are
half-a-dozen case-studies on each bank's website
to make it easier for you to compare the one charging structure
to the other because it might not be that immediately apparent.
It all ends up though, of course,
if you anticipate that you're going to need to borrow money,
it always pays to have that discussion in advance of borrowing money.
Absolutely it's the case that some people
don't necessarily anticipate that they want to go overdrawn
so there's the ability to go overdrawn without arrangement.
Equally, some would prefer the discipline of not being able
to go overdrawn without arrangement and that's something
we've been working on with the Office of Fair Trading
so that banks will shortly look to launch a series of current accounts
where it won't be possible for you to go overdrawn without arranging that first.
It'll be a little bit more... It'll have more to offer
by way of functionality than a basic bank account,
but at the same time it won't let you go overdrawn,
and it'll help you to stay in control of your finances.
I'll give you another example, which I ripped out of our case studies.
A man called Terry,
abroad on holiday for a month, a man who's not short of money.
He left some cheques for his children.
£23 overdraft by mistake because of school fees,
overwrote the cheque, he gets back after his month's holiday
to find he's being forced to pay £65 for the £23 that he's accidentally gone over.
His argument is,
you only use the post to get in touch with him - he's abroad.
Why not use the e-mail address that the bank has or the telephone?
Let him know! Give him the information so he can address it.
I can understand that that's frustrating.
We typically say that we would communicate with our customers on the basis that they prefer.
If they elect to use the internet and e-mail, we'd use that.
If they prefer to use the post, that's typically what we'd do.
In those circumstances, clearly with the individual overseas,
it's unfortunate that the overdraft hasn't been picked up.
A number of banks now provide text alerts,
and if that customer was to use that type of product,
he'd have had that sort of alert,
which would have enabled him to adjust his finances accordingly.
Again, do shop around. If those sorts of aspects of
the Personal Current Account are important,
there's probably a product out there to help you.
At the end of it all, assessing the letters we've had,
and we've had many about banking in general,
the conclusion is that it's the lack of service, the lack of care really,
the lack of information, the lack of transparency.
It seems to be that everything is going in the direction of the banks
and nothing is going to the way of the customer.
I think I'd say that's an unfair assertion.
I absolutely respect that for some people
some things will go wrong, and that's a regrettable
but inevitable consequence of serving 90% plus of the population.
At the end of it all, do you know what I think people really want
these days, in unsure times, in times of recession?
They want information and service, they want care.
What we're trying to do is deliver on both of those.
Hopefully, as we see these new initiatives taking place,
as we see the transparency, as we see the work we're doing around
helping people in debt, people will recognise the banks are stepping up to the plate,
changing products and services to reflect what customers want from them.
Eric, I'll be back to see you in six months. Thank you.
It certainly seems from the stories you've shared with us today that
it's very easy for a small banking error to escalate into something much bigger.
The Office of Fair Trading may think bank charges are unfair
and even the Government's Business Secretary may believe
they're ripping us off, but it looks as if they're here to stay.
Which is why it's absolutely vital to scrutinise your bank statements
and be crystal clear on what money you have in which account.
With so many penalty charges around these days, you can't afford to get caught out and lose vital money.
It's too hard to get in the first place.
That's where we have to leave it for today.
I hope you'll join us again when we'll have many more of your stories on Rip-Off Britain.
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