If it’s a case of follow the money, we’re all going to be Muslims soon

When I was living in England, all of my friends carried perpetual “overdrafts.” If they wanted more money than their account had, they’d go to the bank and basically arrange an informal, short-term loan by which the bank allowed them to draw on money that wasn’t really (or, as my friends saw it, wasn’t yet) there. They weren’t concerned about the fees that accompanied those overdrafts, since those fees were deferred too. If the banks didn’t care, why should they?

I thought it was a peculiar situation, insofar as it encouraged students to live far beyond their means. As for me, I spent what I had, and if I didn’t have it, I didn’t spend it.

Overdrafts are taking a whole new meaning in England, though, because it turns out that Muslims are getting the overdrafts, without really have to pay the fees. That is, they’re paying the fees, but the fees are nominal, as they are capped at 15 pounds, when compared to those charged to ordinary Brits, which can run up to about 200 pounds (emphasis mine):

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.

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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.

No interest is charged on Islamic accounts, while customers with a normal account are hit with charges of up to :£200

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 bank tries to spin this situation as just a different kind of account that, while serving Muslims’ modest, interest-free banking needs, is available to everyone:

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.’

The only problem with this spin is the statement in the article, which I’m going to accept as true unless proven otherwise, that “on some Islamic accounts such a payment is authorised and an ‘unplanned overdraft fee’ of :£15 is then levied.” In other words, contary to the Bank’s public statement, Muslims can have the same overdraft fun as their Christian friends, but they don’t pay the same price. This makes Islam start looking pretty darn attractive to the average bloke who keeps outrunning his bank account.

Cross-posted at Bookworm Room

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