The Royal Bank of Scotland has announced that it will start charging customers £12 if they fail to inform the company of a change of address before two statements have been sent out to their old address.

Lloyds TSB has announced that it will charge customers £35 per year if they don’t use their credit cards and they have also stated that they will require new customers to make a minimum of £100 in purchases when they take out a 0% balance transfer credit card.

All across the credit card industry charges and fees are rising. This follows the OFT ruling that credit card companies should reduce their default transaction fees to £12 or be taken to court by the OFT because the OFT considered charges in excess of this figure would be proved to be unlawful.

So, we have the credit card companies doing something that nearly everybody believed was unlawful being forced to comply with the law. So how have they responded? Like a spoilt child who has been told to stop doing one naughty thing they immediately go off and do something else almost as bad.

This demonstrates that the credit card industry, and perhaps this is just the tip of the whole financial industry, now feels they can do almost anything they like. Credit cards have become such an essential part of modern life that it’s hard for most people to even think about not using them. Over the years they have encouraged and enabled us to have what we want now, rather than saving up and having things in the future. They clearly believe that they are such an essential part of life that we will accept any price to continue using them.

Customer service used to be the name of the game within the banking & financial industry. Competition meant that they had to treat their customers with a certain amount of respect or lose them. Now it seems they don’t care. They want your money and if you are not prepared to give it to them in one way then they will find another way to get it from you.

Why is this? Because they make a lot of money from you using your credit cards. Look at the buildings in your city centre. Which are the biggest and smartest? The financial companies. They have so much money they can splash it about on swanky buildings and pay ridiculous salaries to their management. Interestingly, perhaps, they don’t pay the front-line staff particularly well which is another sign that they don’t really care about their customers or staff.

Where does all this money come from? Why you, of course. You are paying for this with your interest charges, default fees, foreign transaction fees and also now if you forget to inform the RBS that you have moved home.

The only person that really cares about you, in all of this, is you. Take charge of your financial life. Reduce your dependence on credit cards and you will save yourself a lot of money. Read about debt reduction here:- Debt Reduction. Make sure you are getting the best deal for you with your credit cards here:- Find Credit Cards.

It’s your money. Look after it.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

A wide ranging review of charges imposed by the banks on their customers has been instigated by the OFT. This follows an earlier, initial, review of Bank Charge penalty fees which led the OFT to the conclusion that there is a need for a more detailed study of the way banks operate their customer’s accounts. The OFT is concerned that customers are not aware of the true cost of their banking with examples such as poor rates of interest on current accounts and unkown additional costs of purchases abroad.

When the OFT came to the conclusion that the charges applied to credit card accounts for late payments and going beyond credit limits, they informed the credit card companies that they were of the opinion that charges of over £12 per item was unreasonable. The OFT said such charges would be challenged in the courts since they considered they were very likely unlawful. The credit card companies complied, grudgingly and still maintaining their assessment that the charges were reasonable and justifiable, reduced their fees to the specified £12.

What they did next was to start applying other fees and charges elsewhere and increased interest rates. Clearly concerned that their enormous profits would be harmed by the reduction in fees.

The OFT, mindful of this behaviour, seems to have come to the conclusion that the banks cannot be trusted to treat their customers fairly, which many customers would no doubt agree with, so they are having a wide ranging review to look at all aspects of the way banks deal with customer accounts.

Preliminary results are expected towards the end of the year. We look forward with interest.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)

The BBC is reporting that a customer of the Alliance & Leicester Bank has had an extremely unusual offer made to him in response to his claim for a refund in Bank Charges.

The BBC commissioned a study that suggested that a figure of £4.50 should be the maximum figure for the true cost of bouncing a cheque by the banks. This was revealed in a Money Programme in December 2006. The banks, of course, insisted that their normal fees were fair and reasonable in spite of this evidence.

The Alliance & Leicester usually charges £25 for bouncing a cheque but following this customer’s request for a refund of charges the bank has suggested that a refund of the difference between the figure the BBC calculated and the charges the bank had imposed was a reasonable settlement.

This is a huge change in what has up to now been a consistent policy amongst the banks. Prior to this change, which might yet turn out to be a one off, the banks have all insisted their charges are a fair and reasonable recuperation of their costs. The banks have initially refused requests for bank charges refunds and stated that they would defend any action brought against them. Thousands of people have indeed resorted to applying to the small claims court for the refund of their charges and invariably the banks have, at the last minute, decided to settle the claims in full before the case reached the court.

It would seem likely that the banks really did hope that this problem would just go away after a small number of claimants had received refunds. It hasn’t happened like that. Thousands have had refunds and it must be starting to hurt the banks profits. It has seemed odd that the banks have refunded in full as they are clearly entitled to make some charge for the additional work involved in bouncing cheques etc.

It may be that this is the first sign that the banks are at last recognising their failure to conform with the law, though they will never admit that, which states that they may only charge for their costs and they may not charge a penalty fee in excess of that. They are certainly on a sticky wicket with thousands of claims continuing to be made and the OFT investigating their practices.

It would make a lot of sense for them to reduce their charges to a more reasonable level and that way they will at least keep some of the money they have taken from their customers accounts.

Perhaps we can expect to hear reports that due to ‘new’ efficiencies and improved procedures the banks will generously be reducing the charges they apply to accounts. If they don’t find some means of justifying a reduction in charges they may well find that the OFT report will force them to take action and swallow a great deal of humble pie. Watch this space.

Money Magic: Seven Simple Steps to True Financial Freedom (Quick Reads)