Andrew George, MP
(St Ives)
Press Release
14/02/2005
“CHALLENGE UNFAIR BANK CHARGES” SAYS MP AFTER LAURA v. GOLIATH TEST CASE
The Liberal Democrat MP for the West Cornwall and Isles of Scilly Constituency
of St Ives, Andrew George, heralded news of the outcome of a recent County
Court case on behalf of one of his constituents, Laura Saunders (of
Goldsithney) which resulted in her victory against
Yorkshire Bank plc in respect of bank charges amounting to £922 during
2004. Following what could be a very significant test case, Mr George believes
that many banks should review their treatment of low-income bank account
holders and has referred the case to the Secretary of State for the Department
of Trade and Industry - Rt. Hon Patricia Hewitt MP - who has been encouraging
pensioners and claimants to open up bank accounts to receive their benefit
payments, rather than to receive them over the Post Office counter.
The case of Laura Saunders is set out below (see notes [i]). Ms Saunders
is one of millions of people who suffer at the hands of banks and credit
card companies that make much of their profits from variable charges which
vulnerable bank account members can do little about. A number of large high
street banks have raised fees for bounced cheques and unauthorised overdrafts
and have increased the amount charged for customers for unpaid cheques and
standing orders.
The consumer body Which?
has called on all banks to follow the lead of
Commenting on the case, Mr George said, “The case of Laura Saunders
is typical of many constituents who have contacted me complaining about the
penalties they face, often with little prior notification of the change in
the rules by which their account will be managed. Quite frankly, I believe
that many lending institutions get away with blue murder in their treatment
of low-income account holders. I hope that this case will be a salutary lesson
to them all.
“I also hope that the Government will sit up and take notice. They have
been trying to bribe and cajole pensioners and benefit recipients into shifting
the way they receive payments; from the Post Office counter to Automated
Credit Transfer in to newly opened bank accounts. Many of those who are opening
these bank accounts may find themselves in the same kind of difficulty as
Laura Saunders found herself and Ministers should be aware that this could
place account holders in difficulty.
“As far as contract law is concerned, this test case clearly demonstrates
that penalty charges should not be enforceable if those charges are
disproportionate. This is good news for ordinary people on low incomes. Laura
took on Goliath and won,” said Mr George.