'Stealth' bank charge

[tombboy]

My business bank manager emailed me yesterday to say he is giving me 30 days notice of the banks intention to impose a monthly 'Risk Management Fee' of £193.37 on top of the fees and charges we already pay. When I asked him for more clarification regarding this charge, he replied saying it was because of the economic downturn and would cover additional time spent reviewing my account.
Seems strange that he would hit me with this charge the same day the Bank of England announced an interest base rate cut to 1.5% which, co-incidentally, means I would be saving roughly £195.00 per month in interest charges on my commercial mortgage.

I also asked him if this charge was across the board, ie: all small businesses would have to pay it, to which he replied no.

Our account is sound.... we have reduced our overdraft by £25,000 in five months, met every payment on time and without fuss and can show a very healthy forecast so it beggars belief as to why he would impose such a charge. I am led to the conclusion that it is to cover their losses on the interest cut.

Could anyone tell me if this charge is legal? If not, do I have a case for victimisation?

 

[trilby274]

Can't say that it is illegal, but it is certainly unethical. The business of the bank is to conduct risk management at its own expense - what additional risk management reviews are required? As you say, your account is being run without any problems. Ask for a detailed breakdown of costs for this 'service'.

 

[Officebird]

Move banks! I know it's not always that easy, especially with things the way they are at the moment but if you can move I would certainly think about it.

Out of interest which bank is this? It would be interesting to see if anyone else here has been hit with the same fees.

 

[tombboy]

I couldn't possibly divulge sucH Sensitive Banking information. It's Confidential don't you know.

 

[tombboy]

I sent the manager a stinking reply saying how I thought the charge was unethical and that the onus is on the bank to cater for their own risk assessments. I also asked for records of all account management since November 2004 in line with the DPA '98.







He's backed down and 'deferred' the charge!
Small victory for the small business I think!!!!

 

[trilby274]

Well done - but may I suggest you keep up the pressure for the account management records? Should be interesting reading!

 

[.Spiralling.]

under the DPA they are legally bound to provide them after a Subject Access request.


Did you also ask for a list of all occasions where manual intervention was used on your account?