Banks squeezing poor folk

PEOPLE in Shetland continue to be exploited by high street banks, according to the manager of the local Citizens Advice Bureau (CAB).

Les Irving said that in more than 60 per cent of debt cases bank charges feature prominently.

The local CAB office has contributed to a new major report, Fully Charged, published by Citizens Advice Scotland (CAS), which says bank charges are too high and penalise the poor disproportionally.

Mr Irving said banks’ behaviour in levying such charges had not changed despite assurances that were given when a number of banks were saved from collapse by the public purse.

“At our CAB in Lerwick we have had growing numbers of people who have been hit by charges from their bank that they didn’t expect, and in some cases simply can’t pay.

“So they have to perhaps take out a loan, which makes their situation even worse,” he said.

Mr Irving quoted two recent examples from his office’s money adviser:

An unemployed woman lost her job through now fault of her own and now receives Jobseekers Allowance of £65.45 a week.  She has three debts with the same bank – an overdraft, credit card and loan.  The bank repeatedly tried to take minimum payments for the credit card and loan from her bank account despite the fact there is never enough left in her account to cover this. This incurred charges each time, and on one occasion £95 of charges were occurred in a day, leaving her no Jobseekers Allowance income to live off.

A retired woman who incurred an unauthorised overdraft because of unexpected financial difficulties is being charged £5 every day by her bank until her overdraft is cleared.

He added: “This report shows that the banks have been squeezing people unfairly.

“Despite all the fine talk in the last year about how they were going to help people through the impact of the recession, they are in fact continuing to exploit people with charges which are too high, disproportionate and completely insensitive to individual circumstances.

The CAS report, “Fully Charged”, is available on the CAS website. www.cas.org.uk