The day the banks were called bandits

So, your bank isn't just being nasty when it charges you £25 for being a few days late paying your credit card bill. It is probably breaking the law.

This view from the Office of Fair Trading stunned the banks and credit card companies yesterday. They were ready to be called rude names - like profiteers - but law-breakers wasn't one of them.

Common sense, not just the law, is on the OFT's side. It's perfectly proper that a late payer should pick up reasonable administrative costs, but there is no just reason for a bank to slap a penalty on top. What is it meant to cover?

It is as illogical as a restaurant including service at 12.5% in a bill and then expecting the customer to pay the same again in the form of a tip.

The OFT's principle, of course, may apply equally to penalties for authorised overdrafts, bouncing cheques and possibly many other transgressions by customers. Excess profits from penalty charges could be as much as £1bn.

That's serious money, even for an industry that made profits of £30bn last year, and why we should prepare for another chorus from the banks of "we are not charities" Even the esteemed Sir John Bond, making his exit from HSBC, was singing along this week. "I think there is a fairly significant public view in the UK that banks should be public utilities," he said.

We'll assume Sir John is exaggerating for effect because the bulk of consumer complaints about banks are about unfair practices, not about their right to pursue profit in a competitive market.

For example, there has never been an adequate explanation of why it takes three days for direct debits and standing orders to reach their destination. Interest earned in those three days, naturally, goes to the banks, not the customer.

It's that sort of idiocy that makes banks unpopular, not to mention PR gaffes like the attempt to introduce "disloyalty" charges on ATMs.

None of which is to deny Sir John's argument that processing cheques and running outdated branch networks is expensive. But trying to recoup the costs by breaking the law is not an obvious way to generate sympathy.

Dixons unplugged

It is less than a year since Dixons adopted its new corporate identity, DSG International, short for Dixons Stores Group. Dixons stores, however, will soon be history. One of the most famous brands on the high street is being consigned to Room 101. In its place comes Currys.digital, which will sell an amalgamation of Currys and Dixons products. The Dixons name will be retained only on the internet.

Beefing up the online offer is clearly a no-brainer, and went down well with DSG followers in the City. But the benefits of incorporating Dixons into Currys, even if they are to be branded Currys.digital, are not easy to discern.

The chief executive, John Clare, reckons he will increase sales by attracting more customers, such as those existing and potential Currys shoppers who find a high street location more convenient.

But this is not the first strategy DSG has employed to drive its high street outlets. Two years ago it closed 106 unprofitable stores to focus on the others. It has experimented with selling "lifestyle" products in test stores and with super-size and off-pitch outlets under the Dixons XL fascia, which will be retained. (Strangely, the group's airport outlets will also retain the Dixons brand).

Clare says the high street stores are performing well, but they operate on wafer-thin margins. Prices head only downwards, and rapidly. DSG constantly has to sell many more units merely to stand still and competition from supermarkets and online rivals is intensifying. Meanwhile, the high street outlets are burdened with rapidly rising costs, particularly rent and rates.

Clare is encouraged by the performance of two trial stores. But is there really a place for a chain of small high street shops offering everything from fridges to flatscreen TVs, MP3 players and hair tongs?

Wal-Smart

Here's an idea for Tesco, as it tries to quieten complaints about how it is killing our high streets. In America, Wal-Mart, facing similar grumbles, has a cunning idea: it will offer small shopkeepers free training on how to survive when a Wal-Mart comes to town.

This - perfectly serious - scheme extends to giving free advertising space within Wal-Marts to local DIY stores, bakeries and so on. Financial grants are even up for grabs. Not even Wal-Mart pretends this is altruism. It would prefer pockets of resistance to its giant stores - like the whole of New York City - to surrender.

Yes, it's entirely missing the point of the complaints, but you have to admire the imagination within the cynicism.