Thursday, March 01, 2007

'no win no fee' moves in on banks

UK banks have been extracting fees from their customers unfairly for years, and this is now coming back to haunt them. The government watchdog has made it clear that the banks grossly overcharged and that customers are entitled to a refund. This hit the news and now a great many people are demanding the overcharges be returned.

To get a refund, you pretty much have to just tell the bank you want it with a correctly formed letter threatening an action in the small claims court. Now, though, we see firms of lawyers offering to get the money for people on a 'no win no fee basis' as the BBC reports:

BBC NEWS | Business | 'No win no fee' moves in on banks

If you do win you do pay a fee, of course. The BBC suggest that this is typically in the order of 25% of what the bank cough up.

So why go with the layers when you could just ask the bank? Well, the banks will impose a process on people wanting their money back and the lawyers will know how that process works. So, I can get 100% of my money back if I can be bothered to play the game exactly as the bank insists, but is it worth my time?

I don't think so. I think the lawyers will be far more efficient at extracting the money and I will get a good chunk back for little effort. The banks have already demonstrated that they can be unfair so why trust them again? Fool me once, shame on you. Fool me twice, shame on me.

The banks are pleading with people to not use the lawyers. Why? Because the lawyers really are more efficient at pulling the money back from the banks. If the banks want to avoid the lawyers, let them voluntarily return the money to people - a cheque in the post will be fine, thanks.

Otherwise the banks deserve what they get. But I hope they learn, I really do. The UK could do with banks that provide a good service in return for a reasonable fee.

1 comment:

Mark said...

Thousands of people are injured in accidents every year in the UK - on the road, at work, in the home, in public places. In some cases, particularly in the home, the injured person is the victim of his own actions and no one else is to blame. However, outside the home the injury may be caused by the negligent act of another party eg. motorist, employer, local authority, owners/occupiers of premises such as shops restaurants, offices and the innocent injured party could be eligible to make a compensation claim. In cases where negligence can be proved, the injured person may have a legal right to compensation for pain and suffering, permanent injury and/or financial losses associated with the accident. In order to pursue such a claim the victim will need the assistance of a solicitor and this has sometimes deterred people from claiming. However the introduction of the “No win no fee” system in recent years means that persons with a claim to pursue need not be put off by the fear of expensive legal fees.