Fool.co.uk comments on Lloyds TSB’s overdraft charges win

A survey of over a thousand Fool.co.uk readers reveals that consumers are torn over the issue of reclaiming unlawful bank charges and free banking.

Two out of three people say free banking is more important than a right to reclaim bank charges.

Nine out of ten people want banking to remain free.

Two out of three people believe it is right for bank customers to reclaim unlawful bank charges.

Almost seven out of ten people say bank customers should be allowed to recover charges for unauthorised withdrawals. Even bank customers who sympathise with people reclaiming unlawful bank charges believe that banks should not levy a charge for their service.

However, when faced with the awkward choice of whether banking should be free or customers should have the right to reclaim charges, compassion gives way to self-interest. Two out of three people say it is more important that banking remains free rather than allow people to reclaim unlawful bank charges.

David Kuo, Head of Personal Finance at Fool.co.uk, says: “It is not surprising that when push comes to shove, a vast majority of bank customers put self-interest before compassion.

“However, the threat of fee-based banking may be put on hold after a District Court in Birmingham upheld the right of Lloyds TSB to charge a customer for servicing an overdrawn account. The judge said the fees are not charges for breach of contract but part of the price of the services provided by the bank.

“Although the judgment is not binding on any other court cases, the upshot is that banks may be less willing to capitulate over claims for unlawful bank charges. But this does not mean customers should not ask for their money back if they believe it has been taken unlawfully. After all judges are only human and do make mistakes, and so do claimants.

“The genie may be out of the bottle, but customers are still ultimately masters of their own bank account, and should be prepared to move their money elsewhere if their wishes aren’t granted.”