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banking... claiming unfair charges - what constitutes an unfair charge

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Nosha123 | 12:12 Fri 27th Feb 2009 | Business & Finance
6 Answers

Husband has a BUSINESS account with Lloyds. Amongst other 'fees' associated with the account for the pleasure of banking with them... they stipulate that our overdraft must be re-newed every year - for which we pay the privilage of �150. For this fee.. they extend the overdraft for a 12 month period and send out a standard letter (which is the same letter every year with just dates amended!).
Can this be constituted as an unfair or excessive fee? The account is a business account and so balance varies enormously - in the black.. in the red.. back into the black again. We are not permanently overdrawn all the time! There are always funds going in etc.


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I'm not defending the banks, but it's likely that fee is to cover administration of the overdraft. Yes it may be automated but I'm sure somewhere along the line somebody is checking the application and making sure the business is still suitable for it.

Question Author
Yeah I appreciate that... but we never provide any information about the business.. its literally a phone call or a letter to them to say - yes please can we renew for another 12 months. If they see money coming in and out regularly they dont even ask questions.. so... if they dont actually look into it and no forms are filled in.. and the letter sent out is the same every year.. why is it this much every time?
Have you considered shopping around for a new account or asking for them to waive the fee?
Does the fee just cover the annual decision or does it include the cost of the ongoing monitoring of your overdraft?
Question Author
I have in the past asked for it to be waived... an interesting conversation ensued with the manager coming on the phone and basically saying how fed up he is of everyone bleating about unfair bank charges and the courts will make the right decision in the end and that the banks are not wrong - this was last may. Interesting since the courts went the other way yesterday!!! He bleated on about it and how the press misleads things etc til I just wanted to get off the phone!!

I guess to be fair the fee could include some monitoring of the account.

I do hate the banks though!!! Thieving b*****ds
Problem with a business account is that the legislation under which charges are (allegedly) unfair is consumer legislation, therefore arguably not applicable to business/business transactions.

Maybe time to look for another bank.
I really believe that unfair charges are so called because the charge/fee is really high compared to the actual corresponding action which is usually just an automated letter in the post. So, bringing it back to your question, if you feel that your fee is not really getting you value for money, there is a high likelihood that you can get the same service with another bank either much cheaper or free of charge and I would strongly consider it. By the way, this could cause your bank manager to reconsider his stance and waive the fee.

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