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24/04/2008
Customers Win First Round In Bank Charge Battle
A small victory has been won by customers who have so far borne the brunt of excessive bank charges, as the Office of Fair Trading (OFT) has won the right to investigate them.
The High Court has ruled that charges imposed for unauthorised overdrafts are subject to "unfair contract" regulations.
Eight of the UK's leading banks and one building society maintain that the charges levied for unauthorised overdrafts are fees for a service and are not unfair.
Presiding over the decision, Mr Justice Andrew Smith said however, that the current charges imposed were not "necessarily" unfair under the 1999 Unfair Terms in Consumer Contracts Regulations.
Further hearings are required before the deluge of customers who have been charged can reclaim their fees.
It has been reported that banks make between £2 million and £3.5 billion per annum penalising customers who go into the red. Bounced payments also carry fees of up to £35 atime.
Those who vehemently oppose the charges say it only costs banks about £2.50 to redress difficult situations that customers find themselves in.
Martin Lewis is a known campaigner against bank charges and his website www.moneysavingexpert.com encourages customers to reclaim their charges.
Industry analysts have warned that if banks lose the case it could spell the end to free banking, with charges for every transaction. This is likely to cause controversy among customers who manage their banking responsibly.
The banks and building society involved; Abbey, Barclays, Clydesdale, Halifax Bank of Scotland, HSBC, Lloyds TSB, Royal Bank of Scotland Group and the Nationwide have until 22 May to make an appeal.
(DS)
The High Court has ruled that charges imposed for unauthorised overdrafts are subject to "unfair contract" regulations.
Eight of the UK's leading banks and one building society maintain that the charges levied for unauthorised overdrafts are fees for a service and are not unfair.
Presiding over the decision, Mr Justice Andrew Smith said however, that the current charges imposed were not "necessarily" unfair under the 1999 Unfair Terms in Consumer Contracts Regulations.
Further hearings are required before the deluge of customers who have been charged can reclaim their fees.
It has been reported that banks make between £2 million and £3.5 billion per annum penalising customers who go into the red. Bounced payments also carry fees of up to £35 atime.
Those who vehemently oppose the charges say it only costs banks about £2.50 to redress difficult situations that customers find themselves in.
Martin Lewis is a known campaigner against bank charges and his website www.moneysavingexpert.com encourages customers to reclaim their charges.
Industry analysts have warned that if banks lose the case it could spell the end to free banking, with charges for every transaction. This is likely to cause controversy among customers who manage their banking responsibly.
The banks and building society involved; Abbey, Barclays, Clydesdale, Halifax Bank of Scotland, HSBC, Lloyds TSB, Royal Bank of Scotland Group and the Nationwide have until 22 May to make an appeal.
(DS)
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