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Independent Banking Advisory Service |
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Banks Penalize Bank Customers in financial difficulty Banks inevitably penalize bank customers in financial difficulty or those experiencing difficult financial problems often by adding even further penalty charges and fees to their debt – that has been our experience from case files over the last 20 years. The bank penalty charges debate emphasized how banks continued to levy penalties without mercy when payments cannot be made by customers. The OFT court case in February 2008 'ground on' into further legal argument which inevitable ended with the banks winning the final round with a 'knock -out' preventing further attcks from this ource in future. Life has become more difficult for banks due to the sub prime mortgage problems in the US and that factor means the banks will collectively fight hard (by using the BBA to lobby and spread banking propaganda) to keep all they have and all they can get in the future. Of course, the penalty charge fiasco made a complete nonsense of the Banking Code which is now thankfully almost redundant and replaced by the FSA's new regime of 'active' regulation - but we cannot yet trust this new regime will be 'active' and not ineffective - as was the last as it is itself now a subject of much change - of which bankers will take advantage In our opinion, after 20 years of IBAS investigating business banking complaints and disputes, it will only be properly drafted legislation with effective and determined policing by regulators, which will protect bank customers from shabby, unfair treatment and bank excesses and profiteering in the future. The banks have always used which ever parts of the Banking Code suited them best when dealing with bank customers. Even different departments within banks decided whether or not the Banking Code could be evaded when dealing with bank complaints or disputes. Those with problem bank debt inevitably face the bank’s ‘medicine’ of continuous pressure to pay - together with more and higher charges, plus further fees, therefore increased debt. That is opposite to what customers need if they are to regroup, reorganize and plan their finances in an orderly fashion. Whether personal or business bank customers, when poor income or cash flow becomes a problem - it is virtually impossible to immediately stop all expenditure, no matter how desirable that may be in theory. Some degree of common sense is necessary in preventing debt from becoming uncontrollable. Intransigence from banks does not assist those facing debt problems. Bank short term thinking and profiteering will only drive more bank customers deeper into debt and fuel higher levels of personal bankruptcy. You can find our 2012 national newspaper comments (plus many more over many years) in the News and archives sections of our site - IBAS can be relied upon and has been in existence helping business bank customers with their personal guarantees and Director's personal guarantees 'calls' and debt claim demands since 1992.
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