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Last Updated: Friday, 9 June 2006, 18:09 GMT 19:09 UK
Have Your Say: Consumer action
An A&L branch
A&L said the customers had not accepted its terms and conditions

Banks have begun closing the accounts of customers who challenge them over charges after a surge in consumer action.

Some banks have paid out thousands of pounds to people who have threatened to sue over what they say are illegal charges.

But now some of those people have been told their accounts will close as their relationship with the bank has broken down.

We asked for your comments. A selection of them are below. This debate is now closed.

I recently received a payout of over 750 from my bank, thanks to websites like Consumer Action Group. I considered these charges lost for good! When I opened my bank account as a student they gave me a 15 voucher - a small price to pay for the thousands they have made from me ever since! My advice to those who are owed money - take a look at the fantastic websites who can help you claim back your charges!

There has to be some form of deterrent especially for habitual offenders
Elaine, Fife
I am really fed up reading and listening to people moan about bank charges. Instead of blaming the banks why don't people take responsibility for their own accounts. I do think bank charges are excessive but there has to be some form of deterrent especially for habitual offenders. Too many people use cheques when they don't have the funds in their account. If cheque books and debit cards are used when customers know they do not have the funds in their account these facilities should be withdrawn or accounts closed as some banks are now doing. Stop blaming the banks and look to the person who is really to blame. Yourself.
Elaine, Fife

These people have been stupid enough to go overdrawn, and are now blaming the banks for their misfortune. I'm sure they will be the ones to complain the most when the banks withdraw free banking as a result of this campaign.
Damien, Camberley

What cowards! They will have no customers left at this rate! If they think the charges are fair they should use some of the millions of pounds in profit they make to go to court and prove it!
Simon, Notts

Excuse my stupidity: I thought that taking money from someone else without their permission - ie an unauthorised overdraft - was usually called theft. Customers who think they have a right to such behaviour, who believe they shouldn't be penalised for doing this, are living in "cloud cuckoo land". If banks just refused to honour every cheque, ATM withdrawal, direct debit, and so on which took customers over their agreed overdraft limit, we would all know where we stood. They don't do this, I guess, because it would be bad customer service. Damned if you do, damned if you don't!
Chris, Milton Keynes

A number of comments have made the telling statement that they, who manage their accounts responsibly, would be having to "pay for" those who don't. This isn't the case. These unauthorised overdrafts don't cost the bank anything significant, so they don't have any costs to recover. All this does is cut out one revenue stream for them - a revenue stream aimed squarely at their poorer customers, and one which makes it even harder for those who are experiencing financial difficulties to get back on their feet
Daniel, London

I have had over 5,000 refunded from four different banks (current accounts and credit cards). Try it, it works!
Ben, Lancashire

I think some people are missing the point. The fact of the matter is that these charges are unlawful. They are only allowed to recover their costs and are not allowed to penalise you for going overdrawn. If they could explain how an automatically computer-generated letter costs them 30 to send then why don't they?
Mark, St Helens

I would ask how someone could run up 3,000 of charges over five years and then have the nerve to ask for it back
Mick O'Brien, London
Whilst I agree that the charges levied by banks are disproportionate, I would ask how someone could run up 3,000 of charges over five years and then have the nerve to ask for it back. How did he manage to get charged 600 per year? That's just bad management of his finances.
Mick O'Brien, London

I can't understand what all the fuss is about. Banks should be able to charge what they want if someone exceeds their agreed credit limits. So long as it is all made clear to the customer in the first place I don't see it as unfair. It seems that the world has gone mad! I am perfectly capable of managing my finances and I accept that if I overstep the agreed terms with my bank I have to pay for that. People should expect a fine if they can't manage their finances like everyone else does. In my eyes this is just another example of the world going soft.
Nick, Bristol

Since I am about to claim back 350 pounds on behalf of my daughter for what are clearly illegal bank charges, I was very interested to hear your programme. Our daughter is one year out of university and now has a good job, but went through a difficult time for a period, when she incurred these charges. How can any bank cancel accounts as a result of clients claiming money back illegally charged? Shameful!
Tim, Wales

Just wait until the people who have tried to sue the credit card companies get their accounts closed, and demand for immediate repayment. I think banks should not be allowed to make punitive charges for a "first offence", but after that the charge should be higher.
Jamie Stallwood,

The vast majority of customers are able to conduct their accounts in a way which avoids all penalty charges and removing charges for those who do not is just going to mean that we all lose out through higher general charges and lower interest rates. You must remember banks already lose money on current accounts.
Andrew, London

I work for a bank and have bank shares. In my opinion people who overdraw or let cheques bounce (which is also a criminal offence) are skating on thin ice and they deserve all they get. These people complaining that banks make large profits... would they rather bank with one that is making a loss? Nobody forces them to be overdrawn, they act in a wilful and negligent way with little regard for their consequences. Isn't it time you questioned your own morality before you cast stones at the banks?
Robert Southey, London

Closing accounts of those who exercise their rights? Absolutely despicable.
Stretch, Norwich

At the end of the day penalty charges are unlawful, no matter how badly we manage our bank accounts
Stacy Mason, Cheshire
At the end of the day penalty charges are unlawful, no matter how badly we manage our bank accounts the banks are wrong for charging up to 38 for an automated process that costs them about 50p, making the situation worse for many people who then have to pay the charge and still find the money to pay the bill that hasn't been paid. I fully support these people reclaiming the charges, and I will be looking into it myself!
Stacy Mason, Cheshire

I would be interested to find out why the banks haven't tested the legalities of the charges in court. Whilst I can understand that if you look at one case in isolation the cost of bringing it to court would outweigh the claim amount. But if the banks were to win then surely a legal precedent would be set? The only reason I assume that a case hasn't been brought to court is the fact that the banks know the charges are excessive and hence unlawful. By closing the accounts of those brave enough to take on the banks it just smacks of sour grapes.
H.Jones, Cardiff

The banks may be morally right but they are breaking the law. For that they should be punished - not just forced to repay the money they knowingly took illegally. Of course they also have the right to close the accounts of trouble making customers, just like any other business you only want to have customers that you are likely make a profit out of. In the end if you think that banks make excessive profits by overcharging then buy shares in them!
Aleks de Gromoboy, Ealing

I'm not waiting for relations to break down with my bank, I'm out of there. Banks should realise that their business is based for a large part on trust. I have little trust in the banking sector and they don't care because they have got power. They need to take a lot of action to restore public confidence and if they don't I hope they go out of business and honesty takes over the high street once more.
Dave, Surrey

Imagine there was no such thing as a bank account. You would get paid in cash, and pay bills in cash. When the cash runs out, what would you do? Take some cash from somebody without permission? No! Answer - not spend any more money until you are next paid! That these people seem to think they have a god-given right to take money from the banks without permission infuriates me, particularly if they then complain about the charges levied as a result. Play by the rules, and get a bank account for free. It's not often we get a free service, but a bank account is one!
Andy T, Manchester

Banks... should be forced to only charge what is reasonable in relation to the costs incurred
Tony, Reading
I worked for a retail bank in the late 80s and early 90s and then (pre-automation) the charge was justified; by the time I had investigated and manually applied the charges together with writing the letter, getting it all checked and signed off. This cost to the bank in terms of man hours was balanced by the charge. Since those days this process has been automated and the cost to the bank has dropped dramatically while the charge has increased. I don't think the issue is about banks charging but rather that they should be forced to only charge what is reasonable in relation to the costs incurred rather than using it as a revenue stream.
Tony, Reading

I have no doubt that the banks' action was meant as a deterrent to people considering suing them for recovery of the unlawful charges. Instead what they have done is hand these people a biscuit on a plate. Now people can apply for an injunction to keep the account open, and will probably be granted it simply because there is no doubt that to stand up for your legal rights will result in your account being closed. This is also a breach of the law, in as much as the company is attempting to get customers to waive their legal rights in return for keeping a contract open. Unlawful at best - probably illegal.
Dave, Kent

Looks like pay-back time. We trusted the banks to run our accounts legally and you get hit with illegal charges! Big thanks to the CAG.
DCG, Widnes

I'll be glad when my account's forcibly closed - good riddance to an awful bank
Michael, Swindon
I successfully claimed back over 1,300 of fees, interest & court costs from my bank and am now going to take on every institution I've had dealings with over the last six years. I'll be glad when my account's forcibly closed - good riddance to an awful bank. I've got another account set up already with a far more understanding and customer-focused institution. Good luck to those of you that manage to keep your accounts in perfect order. I just hope that one day you find yourselves in the same boat as the less well-off that have had financial difficulties and your bank treats you just the same.
Michael, Swindon

Isn't an unauthorised overdraft theft under the 1968 Theft Act? Maybe the consumer groups and Money Box should give this side of the argument too?
Fred Jones, Fleet

I have just won back 3,400 from a bank whom I have had accounts with for over 30 years. Originally I was charged about 5 for an unauthorised transaction, then without asking for my agreement they raised it up to 34 in some cases. The last straw was 114 in charges for being slightly over the limit for less than a day, and with over 1,000 lying having been BACS-transferred which they conveniently don't credit until the close of the working day. It used to be a good bank, but now they are money-grabbing crooks like the rest.
Alastair, Ayr

If it was up to me I would double the charges
John Brown, Glasgow
If you speak to your bank they are quite willing to temporarily up your overdraft to cover any bills to stop you exceeding your limit. If you go into an unauthorised overdraft you only have yourself to blame. These charges are there, not only to make the banks money, but as a deterrent. If you weren't heavily charged what would stop everyone taking money from the banks that they are not authorised to. If it was up to me I would double the charges. And yes, I have been charged by the banks in the past.
John Brown, Glasgow

I got my charges back, over 1,000 in the last six years. I don't mind paying a fee for going over the overdraft limit, but the charge had increased from 5 to 38 in five years, and the banks profits keep increasing and increasing. And to the people who moan about the fact that they don't want to subsidise us. Why not? We have been subsidising you for years, and I am sure that when free banking comes to an end, no one will be subsidising anybody apart from themselves.
Craig, Sheffield

If the terms and conditions of an overdraft permit the bank to charge and you accept those conditions then the charges are legal. You run the overdraft outside the limits permitted then you are deserving of an excess charge. The only argument can be are the charges too high. The current system of reclaiming back charges is anarchy and the system will fight against that disorder.
R Reed, Bath

I recovered 917 in charges, interest, and other charges which arose due to the deficit caused by previous charges. I don't mind paying 50p for the automatic letter, but not 35. I also notice the banks' system seems to create problems by taking so long to show cleared funds which aids them in being able to charge a fee.
Richard Cartledge, Nottingham

I fully support the banks that decide to close the accounts of those who don't abide by the rules
Stuart Smith, Wigan
I deal with my bank account and credit card responsibly, I pay bills when due and stay within my agreed overdraft. So why should I subsidise those who do not? The money they spend from their unauthorised overdraft, or the money they fail to pay in payment of their credit card bill, is not their money - it belongs to the bank. In any other circumstance it would be thought of as theft! I fully support the banks that decide to close the accounts of those who don't abide by the rules and then refuse to accept the consequences of their own actions.
Stuart Smith, Wigan

I work for a large bank, and have dealt with many customers that suffer this kind of charge. I have also had to defend the bank's position on these charges. I liken it to going into a supermarket and picking up a loaf of bread, and passing through the tills without paying for it. It is now so easy to check balances, there is no excuse for taking what doesn't belong to you. These days people live lifestyles they cannot afford and credit is too easy to obtain. We should look more closely at how people obtain credit and ensure that what they have is adequate for their needs and within the bounds of affordability.
AM, West Sussex

The people who showed this on TV did not think of the consequences for thousands of customers who are now forced to look for another bank. They may not get one since banks are not legally obliged to take on customers.
Neil Small, East Kilbride, Scotland

People have the right to be treated fairly and they should ask for their money back. It is unfortunate that they then get their accounts closed and a nasty mark on their credit records. I always keep my accounts in order and never pay any charges, but if I did I would love to take the banks on! I see no problem with fighting back.
Panos Charamis, Isle of Wight

Free banking should be available for anyone who stays in the black
James, Oxford
As someone who saves up before purchasing items, always stays in the black and pays off my credit card balance in full at the end of the month I'd rather the banks do charge fees to people who miss payments rather than have the alternative of having to pay fees for normal banking like those on the continent. Current accounts these days are a necessity and free banking should be available for anyone who stays in the black.
James, Oxford

These banks make billions and billions of pounds a year in profits from investment, before you even factor in the charges for small high street loans. Charging 30 for going over an agreed overdraft slightly is just sheer greed.

The banks have for so long kept current accounts free by charging the less well-off outrageous penalties when they have cheques and direct debits bounced. I think the banks should be ashamed of themselves. No sympathy from me.
Steve, Liverpool

The bank / customer relationship is a two-way process. A customer is not forced to pick a particular bank to be with, and this works the other way. A bank does not have to accept all customers.

Customers are able to choose who they want to bank with, buy their groceries from, buy their petrol from and so on, so why should it not work the other way - for the bank to be able to choose with whom it wants to do business with.

This already happens in other sectors - for example, clubs can refuse entrance to party goers, pubs can refuse entrance to drinkers and so on.
Javier Freire-Banos, Bristol

I have no objection to paying lawful charges, but penalty charges are unlawful, and I will always reclaim such charges
John Niven, Glasgow
I became aware of this issue after years of having penalty charges "engineered" by a loan company. The loan company claimed that they had not received a registered letter or employed some other excuse to apply a charge. Although they withdrew the charges each time, eventually I snapped and sought legal advice. Since then I've simply paid the charge and asked for its immediate refund. I have no objection to paying lawful charges, but penalty charges - particularly when engineered by the creditor - are unlawful, and I will always reclaim such charges.
John Niven, Glasgow

Since much of the problem of escalating charges stem from bounced direct debits and standing orders, should we all revert to paying bills by cheque on demand from the utilities, thus eliminating the possibility of extra charges conveniently levied by the banks, and making them incur extra handling charges for cheques? That way industry and the utility companies would put pressure on the banks to change their ways.
Paul Farrar, Fareham

I fully support the actions of Alliance & Leicester and the other banks who are closing accounts. Customers expect to borrow money from the banks in the form of unauthorised overdrafts, but don't expect to have to pay for the privilege. I don't work for a bank, and I don't own any bank shares.
Kingsley Guise, London

I had a positive experience regarding charges with my building society. When my cheque for university rent was cashed in with insufficient funds in my account my building society wrote to me saying that based on my good record for managing my account they had extended my overdraft to allow the cheque to clear, and had not charged me any fees for this. This positive result was due to a bank which has excellent customer services plus the fact that I manage my finances well.
University Student, Cambridge

I hope... they are unable to open an account with any other bank
Andrew Gaisford, Malaga
I go to great efforts to manage my bank accounts both in the UK and here in Spain so why should I pay for those who cannot be bothered? I hope the banks not only close the accounts of customers who challenge these charges but that they also pass details to other banking institutions so that these people find that they are unable to open an account with any other bank.
Andrew Gaisford, Malaga

Take your library books back late and you will be charged 10p per day. Sometimes these charges exceed the price of the book. People are rude, storm out, and so on... The point I'm making is people agree to terms and conditions and then complain about the small print. Banks don't usually gamble, why take the risk of going to court? Well done A&L. PS. Library books can be renewed, online, by telephone or in person.
Stephen, Chelmsford

Having only just opened an adult current account, I was shocked to be informed that I was going to be charged 30 for overdrawing my account by just 15. If I didn't have the money in my account and I don't have an agreed overdraft, why on earth did the bank give me the cash, instead of the "insufficient funds" message that appeared with my young persons account? I think these charges are appalling, I demanded a refund and on receiving it closed my account in protest.
Patrick, Reading

In reply to the comment by Patrick from Reading. Patrick, you asked why the bank gave you the cash. The answer is that you asked the bank to do so. As there were insufficient funds in your account, the bank was left with two choices. One was for it to honour the payment, and therefore lend you money that you had not arranged to borrow. The alternative was to refuse the payment. The bank did not know what the payment was for. If it was for example, a loan payment, a possible result of the bank refusing the payment would be that information would appear on your credit file that you had missed a loan payment, and therefore your credit would be adversely affected. Would you then blame the bank for your bad credit history?
Kingsley Guise, London

It only tends to be the poorest and most vulnerable who are hit with these charges
J Brooks, Birmingham
In reply to the comment by Kingsley of London. The banks will let you go slightly overdrawn at cashpoints or the supermarket and then charge fees which exceed the amount borrowed. How anyone can justify this I don't know. Some people on this site seem to be on the banks' side and seem to agree with the excessive charges. I suspect you are the people with plenty of money and you are very unlikely to go overdrawn yourselves. It only tends to be the poorest and most vulnerable who are hit with these charges so I suspect that the banks don't mind losing these customers anyway.
J Brooks, Birmingham

In reply to the comment by Kingsley Guise of London, this person really needs to get a grip on what is actually going on. These banks levy these charges on people who have run their accounts without problems for many years. The majority of banks have simply become too greedy and don't care about customers or customer service.
Chris , Newcastle upon Tyne

R Reed of Bath said "If the terms and conditions of an overdraft permit the bank to charge and you accept those conditions then the charges are legal." But what if you accepted those conditions unaware that the charge level was illegal because the banks failed to inform you? How many accounts are they willing to close before it starts affecting shareholders - if everyone claimed these charges back I don't think they would carry on closing accounts as they will end up with only "good" customers who they earn no interest from.
Pat, Nottingham

Hopefully the OFT will now take further action against the banks
Kevin Watson, Bournemouth
My question to Stuart Smith is: who do you think is going to provide the banks with their profits now? The answer will be you by the removal of free banking. The banks do not defend actions not because of the cost, but because they know they cannot win. Hopefully the OFT will now take further action against the banks, let battle commence.
Kevin Watson, Bournemouth

The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.

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