Government Plans To Put An End To Unfair Bank Charges

The coalition government plans to put an end to "unfair" bank and other financial transaction charges, it has been revealed.

Last year, the Office of Fair Trading (OFT) lost a a high profile legal battle after attempting to regulate charges on bank accounts.

The government also plans to provide powers to ban excessive interest rates on credit cards and store cards.

Another measure that is to be reviewed is an increase in protection provided to homeowners against "aggressive" bailiffs, as well as ensuring that repossessions are always a last resort.

Marc Gander of the Consumer Action Group, a leading campaigner on unfair bank charges, welcomed the news, but said it would be important to read the small-print.

"It [the government] does not define 'unfair' or say what protections will be granted overall," he said.

New rules mean that anyone taking out a store card for the first time will be given a seven-day cooling off period, which it is hoped will avoid some people getting into debt.

The extended policy programme of the new government follows two policies that had already been set into motion by the previous Labour government.

To begin with, a free national financial advice service will be open to the public and will be funded by a new levy on the financial services industry, rather than by the government and the Financial Services Authority as planned by Labour.

Secondly, the coalition plans to remove the ability for creditors to obtain court orders allowing them to seize and sell the homes of borrowers who took out unsecured debts.

In February, the Ministry of Justice was looking at the possibility of setting a minimum level of debt before a court order could be filed.

The coalition government now says it will ban court orders for the sale of properties where the unsecured debt is less than 25,000.

by: Sam Gooch

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