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Last updated at 18:18 BST, Monday, 20 September 2010

French banks fined for fee cartel

Summary

20 September 2010

Eleven of the biggest banks in France have been fined a total of 384 million euros by the competition authority for fixing amongst themselves a price they charge for handling cheques.

Reporter:
Jonty Bloom

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Report

In 2002, banks in France introduced a new commission charge of 4.3 cents for every cheque they handled because of the speeding up of the cheque-processing system.

The banks argued that the faster system, rather than being more efficient and saving them money, actually meant that they had to release funds to customers more quickly, and therefore could not make as much money in interest payments themselves while waiting for the cheques to clear.

But the competition authority has now decided that the commission charges were unjustified and that the banks illegally acted together to fix the rate that they all charged. The banks have a month to appeal.

Jonty Bloom, BBC News, London

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Vocabulary

commission charge

amount of money charged for handling goods, based on the value of the goods

cheque

a piece of paper that you can sign to pay for things, instead of using money

cheque-processing system

process of moving money from one account to another

argued

expressed their reasons

efficient

effective or able to work without problems

funds

amounts of money

customers

people who pay to use a company's services

interest

charge made for borrowing money

unjustified

not fair

to fix

to arrange dishonestly

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