The research indicated the combined loss for consumers through CHAPS, formerly telegraphic transfer (TT) fees, exceeded £23 million every year.
Although most banks charge a fee of approximately £25 for one off electronic payments, the research revealed large users, including mortgage lenders, could negotiate a discount of up to 90 per cent, making the real cost of CHAPS less than £3.
Ray Boulger, senior technical manager at John Charcol, argued CHAPS fees were outdated. “TT fees are just another antiquated way for lenders to make money out of consumers. Technology should cut costs, not increase them.”
With ‘Treating Customers Fairly’ (TCF) high on the Financial Services Authority’s (FSA) agenda, Boulger urged lenders to take a closer look at the charging of CHAPS fees. He added: “With the FSA’s TCF initiative, lenders need to be much more transparent about the fees they charge throughout the mortgage process. The FSA is now looking at exit fees but, in pure percentage terms, CHAPS make exit fees look a bargain. Some fees charged with a mortgage represent a reasonable reflection of the costs involved, but it does not take a rocket scientist to see these fees are completely over the top.”
A table by John Charcol revealed BM Solutions charged £49 for CHAPS, while at the other end of the scale Intelligent Finance and Cheltenham & Gloucester did not charge a fee.
Responding to the findings, Matt Grayson, public relations manager at BM Solutions, said: “All of our fees are split out and are carefully assessed to reflect the costs involved. Our fees are displayed clearly on our Key Facts Illustrations (KFIs) and are subject to ongoing reviews.”
