London – Many Lloyds TSB customers are being hit with charges of up to £200 a month if they go into the red – while Muslims who use the bank are only being charged £15.
Subscribe to our Daily Roundup Email
The part-nationalised bank has been accused of religious discrimination over the disparity between overdraft charges on its standard current account and its Islamic account.
The Islamic account was set up by the high street bank to attract Muslim customers by allowing them to keep faithful to their religion.
Sharia law does not permit the payment of interest so the ‘typical’ Islamic account at Lloyds TSB has been set up without an overdraft facility.
If a Muslim customer who has insufficient funds in the account tries to make a payment, it is blocked and a ‘return item fee’ is charged.
However, on some Islamic accounts such a payment is authorised and an ‘unplanned overdraft fee’ of £15 is then levied.
The bank says this is a management fee, not a payment of interest, so does not contradict Sharia law.
Meanwhile, customers with standard current accounts who go into the red by at least £100 without authorisation are hit with an ‘unplanned overdraft fee’ of £20 a day for a maximum of ten days. This could mean a customer has to pay £200 in one month.
The Islamic account is available to all customers at Lloyds TSB. In theory, anyone who does not need a permanent overdraft facility could switch to this account to avoid being hit by interest charges for going into the red.
The disparity between the two accounts emerged after the bank sent its customers a booklet this month explaining its charges.
A Lloyds TSB spokesman said: ‘The Islamic current account is for customers who cannot receive credit or debit interest due to their religious beliefs.
‘All of our Islamic accounts comply with Islamic law and are available to anyone regardless of background or faith.
‘These accounts are structured differently to our traditional accounts and are designed to help prevent a customer slipping into the red. A comparison with the overdraft charging structure on other accounts is meaningless.’
wow wonder y the yidlech dont structure a ribis free acct as well
Can you imagine a yiddeshe banker setting up special checking accounts with lower fees and interest rates for poor and elderly yiddin….he would be thrown out of the bankers association and might never again be invited to lunch at whatever restaurant took the place of the Four Seasons (which recently closed and whose hashgacha was suspect anyway).
there we go one step away from becoming a Muslim country
ide like to know if a muslim lends money to a non muslim is he allowed to charge precent or not
And when TD bank on 13th Avenue gives out kosher lolloypops and closes on shabbos, do you call that discrimination too?
How about the HAS credit card that gives extra points for shopping at Jewish stores and offers points towards travel to Israel, is that discrimination.
Its called customer accomodation.
The Muslim account is available to anyone who asks for it. don’t forget that Muslim accounts don’t earn any interest either. So the bank makes more money on those accounts than on others.
This is a non-issue.
what about the acct holder accepting interest?
DeutcheBank has the best checking accounts for heimeshe yiddin of any major retail bank and will allow you to decide which services you want included and adjust the charges appropriately. Their interest rates are competitive but the fees/service charges/penalties are the real villian these days when all interest rates are within a few tenths of a percentage point of one another.
i don’t think any bank should be involved in any religious stuff but it’s also private they do what they want… i just think it’s unfair that muslims pay less just because of their “faith” so non muslim have pretend to be muslim just for the same account ? ridiculous
now that its a couple of weeks before judgement day, I would like to say, if only yiddin were as carefull with hilchos ribbis as the muslims are with their ribbis laws, in my line of work I deal with both jews and muslims in ribbis issues, and I think we as a community can make an effort to learn the laws a ribbis a little bit more, I find that a lot of ppl don’t know/dont care about these halochos. yes they are complicated and I would imagine that would make the reward for learning them all the more!
a ksiva v’chasima tova
Sorry, but unless the article is leaving something out, the bank is ripping off the Muslems and saying they are doing them a favor, and throwing in a small crumb in the case of overdraft. On a regular account, they would pay interest on the money, so they charge a larger overdraft fee to compensate. Here they get an interest free account, saving them hundreds, if not thousands of dollars a year on most of these accounts. So in exchange they make a fee lower. Big deal. If you like the deal, you are welcome to open such an account. They don’t care if you are Jewish or not. However, it is not a smart move (at least as described in the article), because you lose more in interest than you gain. Unless, you know, you intend to go into overdraft, or barely keep any money in the account. At which point, as a Rav if you can, and open such an account yourself.