It is no longer news that Banks rips-off their customers, but the rate at which they do it these days is becoming alarming. Banks capitalise on the ignorance of their customers as regards banking rules and regulation to rob them of their money. This situation is very dangerous when the bank account of the holder is running on steady overdraft or loan facility.
Below are some common ways at which Banks rip-off their customers.
1 COT is expected to be charged only on valid withdrawals. Bank overcharge COT by inclusion of
transactions exempted from COT charges like returned cheques, loan liquidation and other transaction that has to do with liquidation, inclusion of COT Shortfall in the loan agreement signed by their customers-the implication of this is that when a customer is projected to make a particular turnover per month and does not, COT shall be applied on the shortfall. This charges is illegal because COT is chargeable on withdrawals only.
2 Outrageous ATM charges.
3 Loan and overdraft interest above the interest margin allowed above the Minimum Rediscount Rate
(MRR) or Monetary Policy Rate (MPR) - This is porpularly called wide INTEREST RATE SPREAD. Most bank violates this regulation.
4 Backdating value dates of Debit transactions so as to make withdrawals to have value earlier than the
transaction date, the effect is to make account holder suffer overdraft interest on backdated days.
5 Excess overdraft interest by applying dual rates for overdraft charges. One the agreed rate while the
second which is higher applied to Excess overdraft (amount overdrawn in excess of overdraft limit). Note, withdrawing beyond overdraft limit does not give bank the right to apply higher rates in form of dual rates. To compound issues, some bank apply the excess overdraft rate on both the actual overdraft amount and the excess overdraft.
6 Charging VAT on interest. VAT is excepted on interest.
7 Hidden loan charges by calculating interest with rate outside monetary regulations and agreed rates.
8 Using unauthorised rates for miscellaneous fees. That is, charges outside CBN's guide (Bankers Tarrifs issued by the Bankers Committee from time to time).
9 Charges for SMS notifications are suppose to be free when compare to world class best practice.
The solution to the above rip-off is regular scrutiny of the bank statement and obtain proof of legality of bank
charges. Customers should also question miscellaneous charges,
* Returned cheques * Renegotiation fee * Above-the-limit charges
* Facility approval * Management fee * Commission on cheques
* Maintenance fee * COT Shortfall fee * Transfer fee