MPs attack high street banks for their 'greed'
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Your support makes all the difference.Leading High Street banks will be heavily criticised today by an influential Commons committee over their charges and the difficulty customers have in switching banks.
The Commons Treasury Select Committee is expected to attack the banks over the amount of interest charged on their credit cards. This can be as much as four to five times the base rate of 4 per cent.
The MPs are also expected to criticise the complexity of the charges. During a grilling of the heads of Barclays, Lloyds TSB, HSBC and Royal Bank of Scotland in May, one bank chief conceded that it sometimes required calculus to work out the costs and the best deal.
Even though banks quote the same annual interest rate, actual charges can vary by as much as 40 per cent.
During the hearing, the Labour MP John McFall, the committee chairman, criticised the banks for being too greedy. But the banks defended the level of charges on the grounds of the risks inherent in credit card lending.
The committee is expected to call for greater transparency in the way charges are set, and better and simpler presentation of charges to customers using plain English.
Banks' profits are also under threat on other fronts. The Government recently ordered them to start paying interest on current accounts to small business customers or offer free money transfer services after the Competition Commission ruled they were guilty of overcharging.
* The "Big Four" banks are likely to lose thousands of customers as people wake up to miserable interest rates and high charges, and take their money elsewhere, according to a survey by Which? magazine.
The consumer magazine says nearly 900,000 customers of Barclays, HSBC, Lloyds TSB and Royal Bank of Scotland/NatWest, which hold about 70 per cent of current accounts, are so fed up with the poor rates and charges levied by banks that they are ready to switch.
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