Bank horror stories

SHETLAND’S Citizen Advice Bureau has backed calls from Westminster for Scotland’s banks to stop imposing unfair charges on customers.

The comments come as isles MP Alistair Carmichael requested people to inform him of any bad experiences they have had with their banks of late.

CAB manager Les Irving said that in recent years the banks had been taking advantage of the most vulnerable people in society.

“The number of clients who have contacted our office in Market House about financial problems has increased by over 40 per cent per cent over the last two years, and many of these have been victims of unfair banking policies,” he said.

In the last few weeks the Lerwick office has dealt with cases where huge bank charges have been imposed on people with tiny overdrafts, people already in debt have been offered high interest loans and those in debt have been “hassled quite aggressively”.

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Mr Irving said: “These cases are not unusual. In fact they are quite common.

“In a recent Shetland case, a 62 year old man came to the bureau with regard to an  overdraft which he was having difficulty paying off.

“Due to him having to change his job he had a significant drop in his income. This resulted in him overdrawing at the bank and accruing additional charges of over £1,700.

“The bank then encouraged him to take an overdraft of £4,000 to cover these charges and other costs. Due to his limited income he currently has a payment plan of £40 per month.  He thinks that if the bank had not added the excessive charges his overdraft would have been much less, and he may have had some chance of paying back the overdraft before retirement.

“In a second case a woman’s ex-partner had obtained access to her account on several occasions and had repeatedly taken out money. This had resulted in a total of £2,597 of bank charges over a period of six months. During this time he had intercepted her mail and removed all letters and statements from the bank, so the client was unaware of the problem. The bank has been unwilling to refund the charges.”

These local cases helped informed the Scottish affairs report published on Wednesday, which said the banks must meet with CAB staff to discuss how to change their policies.

The report can be read at: http://www.publications.parliament.uk/pa/cm/cmscotaf.htm#reports

Mr Carmichael can be contacted at carmichaela@parliament.uk