Liberal Democrats pledge to outlaw unfair bank charges

The Liberal Democrats today vowed to put an end to unfair bank charges and help consumers claim their money back.

In its 'manifesto for consumers', the party said it wants to stop banks from charging customers unfairly for going over their overdraft limit or bouncing a cheque.

Bank charges have been the source of great debate between the Office of Fair Trading (OFT), consumer help groups and the banking industry over the past few years. And it has taken three court cases to reach the decision that overdraft charges are a clearly advertised part of the price levied by banks for providing account services, and that the OFT has no authority to judge whether these charges represent value-for-money.

This means banks can continue to charge consumers fees of around £20 - £30 if they exceed their overdraft, even if they only go over by a few pence.

Nick Clegg said today that banks should not be able to ‘profiteer’ from consumers making small mistakes.

He said that although banks should be able to pass on the costs they incur when dealing with these problems, it is not right customers are charged hundreds of pounds for accidently going overdrawn by a small amount.

Clegg has also called for banks to pay back the money they took from their customers in unfair charges, claiming if they had a ‘shred of moral decency’ they would never have imposed these charges or refused to pay them back.

He said: ‘Together Barclays, Lloyds, HSBC and RBS have given out more than £7bn in bonuses in the last year alone. How can they refuse to return a few hundred pounds they wrongly took from people struggling to make ends meet from week to week?’

The Liberal Democrats also want to introduce policies to:

•Put a cap on interest rates charged by credit cards and store cards
•Introduce fair energy charging so that the essential, energy you use is cheapest
•Cut rail fares
•Regulate the parking system and stop private sector wheel-clamping
•Introduce up-front pricing for airlines and put an end to unfair fees
•Regulate supermarkets to ensure fair local competition
The party claim these measures will help put a stop to 'rip-off Britain'.