LLoyds TSB Plc has seen a £1.6 billion increase in it’s profits over the last six months as the controversial overdraft and account charges increase profits dramatically. This apparent strong management will be hugely flawed as this could be the next big banking scandal depending on how consumers react to it.
The charges come from unauthorized overdrafts on accounts held by customers who go over their arranged overdrafts that they originally agreed with their banks. The charges are automatically taken from the customers account and can be charged upto £60 which will be then charged at 8 pence interest on the account held by the consumers.
The bank will also charge a monthly fee of £5 for those account holders who know that they are likely to be going over their unarranged overdrafts. This will then be charged at £13 from December, this will be known as a stealth charge and a monumental reason for why LLoyds TSB Plc will be increasing their profit shares over the next two years.
Lloyds TSB Plc profits are coming at a time that the banking system as a whole is coming under close scrutiny from the Payment Protection Insurance scandal that will go down in history as the biggest scam in the banking history after the last scam which cost the bank around £12 billion, the current PPI bill is costing the banks around £12.5 billion and this is set to increase to a huge £50 billion in the next two years.
Account charges have already come under massive scrutiny in the past with people being charged huge bank charges per month, however the Judicial Review ruled in favor of banks and not consumers, something that came as a huge shock to consumers as bank charges are notorious for being over priced for those who were going over their limits by pennies.
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