If you read a story about leather jacketed, burly looking loan sharks preying on vulnerable people on a sink estate, you'd probably be sympathetic, but unsuprised.

Well the sharks just opened up business on the high street. A recent leaflet mailed to Lloyds customers carried the title "Avoid slipping into the red...We'll help you steer clear". On the surface the leaflet was designed and worded as an uber-helpful Lloyds trying to make your life easier. Read it carefully and they're using an iron claw to rip charges out of vulnerable customers, and wrapped it in a lovely cuddly corprate message of helpful banking behaviour.

Anyway, here's how a High Street Loan Shark does business -

Example

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You go on holiday for a couple of weeks and your account goes overdrawn by £50. Lloyds will automatically "consider" this to be a "request" for an "Unplanned Overdraft" and charge you as follows:-

£15 - for a "Monthly Fee"

£15 - per day, for up to 10 days (i.e. £150)

If you then go over the month end, this combined fee of £165 will be added to your "unplanned overdraft" - taking you to £215 (£50 + £165) and into the higher overdraft charging zone - i.e. £20 per day. So here's the maths from the beginning....

£15 - monthly fee #1

£150 - for 10 days of overdraft (£15 per day)

= £50 + £15 + 150 = £215 (new overdraft level)

£15 - monthly fee #2

£200 - for 10 days of overdraft (£20 per day)

= £215 + £15 + 200 = £430 (new overdraft level)

This new fee structure is designed to achieve the following for the bank:-

Step 1 - when a customer trips over their limit - the automatic position of the bank is to "give" the customer an "unplanned overdraft" - thus attracting punitive fees.

Step 2 - for amonth or so, the bank will allow payments to go out and fees to accumulate.

Step 3 - the bank will pull the plug, and "help" the customer by offering an authorised overdraft - thus attracting interest and tying the customer to the bank indefinitely.

In short, the fee structure is a type of man-trap, hidden in the undergrowth of their helpful terms and conditions. Once you've fallen into the overdraft trap, it's almost impossible to get out again unless you salary increases significantly.

This new fee structure has been engineered to tip a large number of otherwise stable, low to middle income customers into a forced loan with their bank.

It's cynical. It's no different to loan sharking.

For good measure, I called lloyds this week to ask for an address where I could send a letter of complaint. The conversation with the telesales lady was revealing...

Me: "I'd like to send a written complaint about the unfair charges Lloyds have introduced"

Lloyds: "No problem,just send it to Box 1, BX1 1LT"

Lloyds: "you won't get anything back from us you know. You're probably aware that it's in court now and we're not paying anything back"

Me: "I know it's something the OFT are contetsing"

Lloyds: "yes, but even if they win, we will appeal. it will take years, so don't expect a quick result"

It then dawned on me, Lloyds (and others) now have 2 years of impunity regarding their charges. They are using the ongoing court case to fend off any new claims and in the mean time have 2 years to abuse consumers- with the OFT complicit in the whole deal.

Amazing.