Legislation on notification of bank charges?

MrPez

Can anyone tell me if there is any legislation on the way banks notify businesses of bank charges?

We have a small business and use LTSB commercial finance factoring services.

Each month I get a statement from them that summarises all ledger activity and charges that are applied to our account. It has 3 sections: Sales ledger movement, Current Account Summary, and VAT invoice.

Under the current account summary, it lists an opening balance, payments made to us, and various charges (including one called "Discount Charge"). The VAT invoice section lists all the various fees with the VAT figures separated.

What I have just noticed is that the part on the VAT invoice section that says "Total Fees and Charges" does not, in fact, include the "Discount Charge". This charge is applied to our account in addition to the other fees.

I have sample but can't figure out how to attach it.

What this means is that in the 7 years that we have been using the factoring company, the facility has actually cost us about £40,000 more than we had realised, as we had always assumed that the "Total Fees and Charges" figure was the total cost to us.

Perhaps this is simply my ignorance on the matter and maybe it is obvious to other people, but should a "Total Fees and Charges" not be an actual total?

Hopefully someone else will be able to give me their opinion.
Thanks.

steve1980

Check the terms and conditions of the contract you signed with them. I don't understand why companies use a third party for their ledgers. £40k could have paid for someone to do your books exclusively.

MrPez

I'll have a look.

The reason we use a factoring company is because we have no choice! They fund our invoices immediately, and unfortunately we are not in a position to get rid of them. We would need to have enough cash to buy back our whole ledger in one go which is not an option at the minute.