4 May 2007
A large number of specialist firms designed to help consumers win back money after they have been charged unfair fees for their current account may not be the "knight in shining armour" that they appear, according to uSwitch.com.
The price comparison and switching website has issued a statement warning consumers that while these firms might seem like a good idea, their substantial fees could leave consumers out of pocket.
According to uSwitch.com's estimates, the 30 or so "ambulance chasing" firms which have been set up could gain £531 million out of consumers' wallets thanks to their fees, which often range from 10-40% of their overall winnings.
"Consumers using a claims management firm could soon see their 'knight in shining armour' transform into Dick Turpin," warned Mike Naylor, Personal Finance Expert at uSwitch.com.
"We strongly advise people who have been hit with unfair bank charges to steer clear of these companies. For just £10, a fraction of the fee these firms are charging, consumers can manage their own claim."
Mr Naylor said that the first thing disgruntled consumers should do is to consult their bank to see if the situation can be resolved. If the bank fails to provide a satisfactory outcome, the consumer should take their case to the Financial Ombudsmen Service (FOS), which is free of charge.
Finally, Mr Naylor warned that many banks try to shirk the complaints by closing the current account when the customer issues a claim. To avoid this, uSwitch.com advises switching their current account before submitting their case to the FOS.
"Under the Banking Code, any bank charges incurred as a result of mistakes by either bank involved in the switching process must be refunded, meaning the customer is always covered," he confirmed.
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