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Last Updated: Wednesday, 7 June 2006, 16:25 GMT 17:25 UK
Bank bars overdraft charge rebels
A person with bills
Which? said 1 in 4 consumers pay unauthorised overdraft fees
Alliance & Leicester bank has decided to close the current accounts of people who have sued it for imposing supposedly unfair bank charges.

Some customers who had got their overdraft penalty charges refunded have been told their accounts will be closed in 30 days.

In recent months, the number of people suing their current account providers regarding overdraft fees has increased.

The bank said the customers had clearly not accepted its terms and conditions.

"As it is clear that you do not accept certain aspects of the terms and conditions for the operation of your account, we regret that we are unable to continue to offer you banking facilities," the bank said in its letter to the customers.

Under the UK banking code, Alliance & Leicester has the right to close the accounts.

Campaign against high charges

Consumer group Which? estimates 1 in 4 consumers face unauthorised overdraft fees at an annual cost of 3bn.

The group has encouraged consumers hit with "unfair and excessive" charges to take court actions.

A recent BBC News website investigation revealed that nearly 200 customers of UK banks and building societies have been refunded their unauthorised overdraft fees.

Recently - and unexpectedly - the Office of Fair Trading (OFT) ripped into the banking industry's charging regime.

Charges, the regulator argued, "should only reflect the administrative costs of dealing with the default," as it criticised charges for credit card late payments.

The OFT has said the same principle should apply to default charges on overdrafts.

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