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The subject of bank charges continues to appear in the financial headlines on a regular basis. The OFT is part way through it's own investigation into the area and has brought a case against the banks to the high court, even though the banks are questioning whether the OFT has any jurisdiction in the area.
When research by the agency YouGov was announced the British Bankers Association jumped to denounce the figures, claiming they were wrongly put together and gave statistics a bad name. The report claimed that banks had refunded £2.6 billion to 3.8 million people since 2001, but the numbers were calculated on rough extrapolations from the BBA. When the refund figures for the 5 major high street banks were totalled for 2007 the figure came to a mere £399million.
Given that these banks run around 70% of UK accounts the annual total for 2007 would be more like £570million. This is still a high figure, but one that is likely to be capped until the court case is resolved next year. The primary issue the OFT has is that charges don't actually reflect the financial impact to the bank and are in effect penalties rather than service charges.
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