"Don't throw away any bank statements - there could be gold there," advises Jeff Lampert of Competitive Business Banking Analysis (CBBA).

Article written in Accountingweb on 23.04.03

Jeff Lampert is the co-founder of CBBA, a London-based agency that helps business identify bank interest overcharges and claim back payments. So confident is cbba of its service that it does not charge a fee, but claims a 37.5% share of any repayments.

Since it ramped up its activity in 2002, Jeff Lampert claimed 70% of the clients CBBA had dealt with had been overcharged. In the main, smaller companies suffered worse, but unlike rival interest audit agencies, CBBA can cater for larger corporates.

Don Cruickshank's study on business banking estimated that the high street banks were overcharging SMEs by 3-5 bn. According to cbba, a third of that figure could be accounted for in overcharged interest. Among the techniques the agency has identified are: Applying punitive rates for unauthorised overdrafts to the full amount overdrawn rather than the excess over the agreed limit Failing to consolidate client accounts so that positive balances are offset against overdrawn accounts "Loading" small extra amounts above the published interest rates on to loan and overdraft interest.

"It's a black hole - and the only evidence the client gets is a statement," said Lampert. ""Interest checking is not a science, it's an art form. Nobody knows how they charge. One of our clients - a shrewd property developer - found he had paid £10,000 a year more than he should."

CBBA's service is based on working through the statements and calculating all the interest due over the periods in question. The longer back statements go, the more opportunity there is for the checks to identify mistakes - and to reclaim the overpaid sums with 2.5% compound interest. As a first engagement CBBA will carry out a quick check working with statement balances and if there is evidence to suggest there are discrepancies, it will enter all the debit and credit details into a massive file which is fed into a US-developed interest checking programme.

cbba will highlight discrepancies and submit them to the bank as the basis for a negotiated settlement. Discretion for both client and bank is part of its service, so it will not divulge the contents of the clients' bank statements - or the amounts claimed from the banks.

"It's not worth an accountant's time to do this work and they would have problems with the percentage fee we charge," explained Jeff Lampert. Never the less, interest overcharges are so common that he argues the process should be included as part of the audit.

"Accountants don't do it, but they should. For certain types of company a substantial part of running their business is the cost of borrowing money. We think this is crucial and should be checked in detail as part of the audit."

Jeff Lampert pointed out that businesses put all sorts of activity out to tender - "but unless they have an in-house treasury function, very few of them will do so with their borrowing."

Jeffrey Lampert decided to form CBBA with partner Tony Bogush after experiencing first hand the depredations of the banking industry as chairman of Heritage plc. The company was put into liquidation by Lloyds TSB and it was during the receivership period that he discovered his company had been overcharged by the bank that put him out of business - although he admits the amounts involved did not bring his company down.

But he still sees CBBA as a service that will enable him to get his own back. As businesses become more sophisticated and monitor their interest payments, there will be fewer opportunities for services like CBBA's -but there are a lot of historical cases to work through. And he freely admits that CBBA is only scratching the surface.

"[The banks] know it goes on. If 5-10% is found out, they're happy to pay because they're still getting away with 90% of it," he said. 

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