How Do Banks Justify Overcharging?

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How Do Banks Justify Overcharging?
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• The banking sector is currently undertaking
  face-lifting activities after credible reports
  revealed that mainstream banks in Ireland have
  been overcharging their customers. Justifiable
  financial consultant and statements show that
  some banks have been overcharging for a long
  time, which is a clear indication that they have
  not been doing so unawares. Although the Minister
  for Finance, through the Central Bank, is
  enforcing a refund policy, below is a list of
  excuses that banks have been using to justify
  their infamous overcharging practices.

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• Policy Gaps
• For an extended period, operational managers have
  used the gaps in the law, which allow banks to
  charge customers for overspending, especially
  through overdrafts. Other legal openings allow
  banks to overcharge their customers in the cases
  of unsuccessful bank transactions such as
  reversed direct debit and bouncing of cheques
  among others. Although the law indicates that the
  charges must be the true cost incurred by the
  financial institutions, no legal provision puts a
  barrier to what extent the banks can charge.

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• Customers Ignorance
• According to bank officials, certain accounts
  attract higher fees than others. However, many
  bank account holders dont understand the types
  of accounts they hold, which means they are
  always surprised when they get their bank
  statements. Some bank accounts, especially those
  that receive foreign currencies, attract higher
  fees due to the currency exchange charges.
  Customers might think that their accounts have
  been overcharged. However, they ought to know
  that they pay for the standard account
  maintenance and forex exchange charges.

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• Changing Monetary Value
• Future value of money is another scapegoat that
  most of the banks have been using to overcharge
  their customers. When customers deposit money in
  their bank accounts, they expect to withdraw
  money with the same value as they had deposited.
  Banks have to charge customers because money
  losses value with time and the banks act as a
  store of value. However, banks overcharging
  refund are not involved in the monetary policies,
  which mostly determine the time value of money.
•  

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• High Risk in Lending
• Besides, the banks have been losing huge amounts
  of money after a considerable number of customers
  default their loans. In an attempt to mitigate
  the losses, most of the borrowers with low credit
  scores are constantly overcharged to cater to the
  provision of unpaid debts. The problem is that
  even borrowers with good credit scores are not
  spared. This is an unjustified financial
  institutions strategy as it forces genuine
  customers to cater to the financial consequences
  of negligent customers.

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