Deadline Set On Unfair Bank Charges Case
A High Court hearing to decide the Legimacy of bank overdraft charges should now start before the end of the year.
The Office of Fair Trading and the eight major banks agreed the timetable under pressure from a High Court judge.
Earlier, Mr Justice Andrew Smith allowed the banks to appeal against his first ruling last month that the OFT has jurisdiction over the charges.
If that appeal suceded, then any separate decision on fairness would be made redundant.
Customer Wait
Last month’s ruling by Mr Justice Smith was a victory for the OFT, which has been seeking legal confirmation that it can rule if bank charges are fair or not.
The banks have been keen to oppose this to protect the estimated £3.5bn a year of income they generate from charging customers who go overdrawn without permission.
Under pressure from hundreds of thousands of customers suing them for the return of their overdraft charges in the county courts, banks agreed to a High Court test case in two stages.
The first was on the authority of the OFT under consumer contract regulations. The second will be on the fairness of the charges themselves, which the OFT has been investigating since April 2007.
“The judge has indicated he wants the OFT’s investigation to be wrapped up quickly, and that is a very positive move for consumers waiting in the wings,” said Chris Warner, a lawyer for the consumers’ association Which?
“But the banks are appealing and it will be some time before a judgement is issued in that hearing and so consumers are still some way away from getting their money back.”
The banks’ appeal is likely to be heard this autumn, but if either side then takes the issue to the House of Lords, the OFT’s jurisdiction in the matter is unlikely to be settled until next year at least.
Ever Since the two sides first agreed this long process of litigation last July, tens of thousands of claims for the refund of bank charges have been frozen in the county courts.
Earlier in the course of the High Court case management conference, Mr Justice Smith expressed his discontent at the OFT’s initial statement that it had no idea when its investigation would be completed.
“While the investigation is going on, we are asking the county courts to keep the litigation on hold,” he said.
“How long are they expected to wait?”
Later, however, the OFT said it would share its initial findings with the banks in mid- to late July.
The regulator and the banks agreed that if they could not agree on a fair level of charges, the issue would go to the High Court before Christmas for a ruling.
For the time being, unresolved cases before the county courts and the Financial Ombudsman Service will stay on hold.
“I don’t think this position should change,” said the judge.
“The reasons that these actions should not proceed seem as strong as they were, and will remain so until any appeal by the banks is resolved,” he added.
Help Placing Your Claim
Many people are now successfully claiming back the unfair bank charges from their banks.
If you feel you have been subject to unfair bank charges, there are things that you can do to get reimbursed.
You can write to your bank yourself detailing all the charges that are unfair requesting a refund. Many banks are now point blankly refusing to pay and insisting there customers make any claim via the small claims court in an effort to dissuade them due to the extra hassles involved.
So a lot of customers are now forgoing all this bother and just instructing a professional company such as Claims Financial to expertly handle them claim for them.
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