Bank charges appeal by banks allowed in House of Lords, but consumers should still reclaim

01 April 2009 / by Rachael Stiles
The House of Lords has granted the banks involved in the test case over so-called 'unfair' bank charges permission to dispute a ruling made by the Court of Appeal that the charges are subject to fairness rules.

The right to appeal the bank charges decision in the House of Lords was granted yesterday, and the banks now have until April 15 to lodge their petition against the ruling, the House of Lords has said.

"This latest news is just another delaying tactic by the banks," said James Caldwell, director at, commenting on the unexpected decision. "The test case has been going on for long enough now, and we are surprised that this decision has been made by the House of Lords."

Bradley Askew, managing director at's partner, and specialist claims company, Claims Financial, said: "We have every confidence that the House of Lords will find for the consumer, albeit we are surprised because three Court of Appeal Justices unanimously agreed that there were no reasonable prospects of overturning their decision and that such an appeal would not be in the public interest.

"We continue to encourage consumers to lodge their bank charge complaints, and remain confident that the House of Lords will do the right thing."

According to Martin Lewis, founder of consumer revenge website, this is yet another delay for consumers who are waiting to get back money that is rightfully theirs, taken from their accounts without their permission.

At the time of the Court of Appeal's ruling in favour of the Office of Fair Trading, made in February, the OFT said: "This judgment confirms the OFT's long-held interpretation of this important aspect of consumer law, and is one that consumers themselves would identify with. It is also relevant to businesses across the whole economy."

The OFT will therefore be disappointed to hear that the banks are now allowed to appeal the ruling that bank charges are subject to this aspect of law.

Commenting on the House of Lords' decision, Martin Lewis said: "It's time the banks gave up and paid out. Hundreds of thousands of people are waiting to get money back that's been unlawfully taken from their accounts, without their permission. Both the High Court and the Court of Appeal have already said bank charges are governed by fairness rules and the OFT has said it provisionally thinks charges are unfair."

The consumer scored what Mr Lewis deemed a "major victory" last month when the Court of Appeal agreed with the High Court's decision that overdraft charges are subject to the Unfair Terms in Consumer Contracts Regulation of 1999.

"This is a supertanker and it's only heading in one direction. The banks can't stop it, but they're doing all they can to slow the process down," said Mr Lewis. "That's a shame as there's nothing the economy needs more right now than cash put into real people's pockets."

Mr Lewis predicts that this will mean an extension of the freeze reclaiming bank charges, implemented by the Financial Services Authority, but urges consumers to keep getting their claims in, so that they are further up the queue, and those in financial hardship should definitely apply as the freeze does no necessarily apply to them.

Thousands of current account customers wait as their unfair bank charges claims remain on hold in the courts until the test case comes to a final conclusion. Having reportedly been taking as much as £2.5billion a year from their customers in bank charges, the banks could be forced to repay more than £20billion pounds if they eventually lose.

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