Financial Services Bill

I agree. In a sense it has been allowed to happen because, for many decades, there was a feeling that the relationship between the account holder and the bank was one of good faith; an inherent feeling that the bank would be fair and act in good faith on the customer's behalf—perhaps even give them some good advice occasionally—and would not take people to the cleaners' every time they transgressed. When banks did the latter, it came as a great shock. I suspect that many Members of Parliament have been approached by account holders who complained because they had miscalculated the day on which they would get their salary and drawn a cheque, thereby overdrawing their accounts by £10, £15 or £20. They then found that for that £20 transgression, they were fined £30 and another £20 for the letter informing them of that. In a day or three or four, a transgression of £20 had become £100, which was directly debited from an account. People were not advised that it would be debited; it was done automatically—the money was gone. By the time the letter arrived, the account holder was substantially more overdrawn than they ever anticipated, mainly because of the charges. That compounding of the problem led to the complaints about charges on top of charges. The banks suddenly found that they could make all sorts of other charges for unauthorised things. Even two or three years ago, I know of someone who complained to a bank after banking with it for 25 years, and was told, "Very sorry, we don't want you banking with us any more. Would you kindly arrange to close your account in three weeks?" It was amazing. All the person had done was complain, and the bank had written a letter saying, "Hard luck if you don't like it. If you don't close your account, we'll close it for you." Banks' behaviour reached the height of arrogance, and people collectively said, "Enough is enough." It suddenly became clear that such behaviour was happening everywhere, and the complaints meant that some people were refunded—sometimes after going to the bank and thumping the desk, sometimes with the help of hon. Members. Then the refunding stopped because the complaints were so numerous that it was felt that the matter had to go to court. Many people waited for the verdict, but the case lasted for a long time. At first, the court's decision appeared to be in the complainants' favour, but now we know that it was not. Many people feel that they have been cheated not only once, but twice. They feel cheated because they paid enormously high charges for unauthorised overdrafts—there is a difference between charging people legitimately for the work entailed and penalising them for unauthorised actions—and cheated again because the court ultimately decided for the banks, which were in pretty bad favour anyway. We have got to a situation in which such good faith as there may have been has been totally dissipated—the public relations for the banks has been a disaster—and we must now get back to a transparent and obvious means of charging.