Just several days stand between bank customers and a potential opportunity to reclaim millions of pounds in what the Office of Fair Trading (OFT) has deemed 'unfair' bank charges.
A verdict is expected on Thursday on the test case brought by the OFT against seven of the UK's biggest banks and one building society, which should clarify the fairness of fees implemented by banks when a customer exceeds their overdraft limit, bounces a cheque or has insufficient funds for a direct debit or standing order.
Since 2006, the OFT has been lobbying for these charges to better reflect the actual costs incurred by the account providers when a customer breaches the terms and conditions of their account; this high court case will determine their fairness by holding them up against the Unfair Terms in Consumer Contracts Regulation (UTCCR) 1999.
Mr Justice Andrew Smith has been deliberating since the case took place between January 17th and February 8th, when the OFT accused the banks of charging customers too much – up to £39 a time – when the actual cost is estimated to be as little as £2.
The banks in question – Barclays, Abbey, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide Building Society – maintain that the charges are fair and are designed to help them meet the administration costs involved when a customer has to be sent a letter informing them that they have breached the terms of their account and are being charged.
Customers were already reclaiming bank charges
in their thousands before the Financial Services Authority put a freeze on the process until the issue was clarified by the courts.
The OFT has also helped consumers to reclaim credit card charges
since it said that these were also disproportionate to the issue of late payments, and mis-sold loan insurance
, which many customers have bought without realising it, or have been pressured into buying it by mortgage brokers and car financing companies.
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