The main retail banks may be trying to improve the service they offer their personal and business customers, but that doesn't mean the time has come to drop your guard. If anything, bank customers should be even more vigilant about the interest charges and surcharges that banks apply, says Mr Patrick Shallow, of Finalysis, the banking consultants.
Most Finalysis customers are large financial services companies and industries, for whom the company performs indepth audits of their various bank accounts and treasury operations such as currency management, international money transmissions, overnight, short and longer term deposit accounts. It isn't unusual, he says, for these audits to unearth accounting and computer errors on the part of the banks which result in sizeable refunds.
Refunds can be a few thousands or a few hundred thousand, he says, depending on the size of the companies and level of vigilance by their financial departments.
According to Mr Shallow, the revelations this year about National Irish Bank and other banks overcharging their customers also generated considerable interest from smaller companies and partnerships who felt they too needed assistance in investigating their bank charges.
As a result, Finalysis, in association with Raven Computing has produced a software-based Overdraft Interest Calculator for small and medium firms which provides a scaled down version of the methods that Finalysis uses to audit charges for larger corporations. Designed for business operators with only marginal computer expertise, the Windows-based programme requires a surprisingly small amount of inputting of account information and transactions and known interest rates from up to three accounts for a small operator and 20 grouped current accounts for a mediumsized business. From this basic information the programme can determine the real rate of interest being paid and whether overcharging is taking place. The company also offers a telephone helpline service.
Servicing bank accounts, overdrafts, etc can amount to up to 15 per cent of all costs for partnerships and small firms, says Mr Shallow, who has long bank and building society management experience here and in South Africa. "Having worked for many years in banking, I know how the banks make their margins and I know that many surcharges can be avoided, simply by ensuring that the correct interest rate is being applied by the bank branches." In many cases, it is as simple a matter as the branch not understanding the terms of a lending document, which he says, is drawn up too often in legal language not easily deciphered.
"Sometimes the local branch isn't even aware of when the interest charge begins and when it ends." Knowing exactly how much interest you should be charged on an account (or on a deposit for that matter) is the first step in gaining refunds, says Mr Shallow. "Many bank customers do not realise that legally, the onus is always on the credit provider to prove the debt. The banks have enjoyed a psychological benefit over their customers for years as most people believe that if they have been overcharged they have to prove it to the bank. But in fact, it is the other way around."
The Overdraft Interest Calculator (OIC) programme is the first in a number of computer programmes, under the umbrella name of Bank Client-Tel aimed at mainly small businesses and partnerships, but which can also be used by sole traders or high net worth individuals with high usage of bank services. Future software programmes will analyse hire-purchase plans, leasing, savings and deposits, currency, money markets and mortgages.
The OIC programme comes with an explanatory guide which also gives a good analysis of how the Irish bank clearing system works. The programme for small companies which analyses three accounts costs £99 plus VAT, while the more extensive one (for up to 20 accounts) costs £295 plus VAT and is available from Finalysis Ltd, 114 Pembroke Road, Ballsbridge, Dublin 4, Tel. (01) 667 1822.
