Customers who are looking to reclaim the bank charges they have paid for exceeding their overdraft during the last six years will probably still get their money back, despite the banks winning points in the high court yesterday.
Mr Justice Andrew Smith has said that most customers will not be able to challenge the penalties they have paid to their banks for exceeding their overdraft limit, but this is only one step in a lengthy process, and customers still have the weight of the Office of Fair Trading behind them.
According to claims firm ClaimsFinancial, there are many more hurdles that the banks need to overcome if they are to save themselves from having to repay millions of pounds in current account charges.
More cases need to be heard before a final ruling is made on the 'unfair' bank charges
, and this is only the next round in a drawn out battle between banks and the Office of Fair Trading, to test their fairness and determine whether or not thousands of customers will be able to reclaim bank charges
In the latest development, after examining the terms and conditions of the financial institutions involved in the test case – seven banks and one building society – the judge found yesterday that in most cases they did not warrant providing any compensation for their customers.
But Bradley Askew, director at ClaimsFinancial, says that the strongest case for the consumer was won when the same judge agreed that the OFT has jurisdiction to determine whether or not charges are unfair under the Unfair Terms in Consumer Contracts Regulations 1999.
The result of the bank charges saga has the potential to impact thousands of claims for bank charge refunds that are currently frozen in county courts while their legality and fairness is evaluated.
The OFT continues to believe that consumers are right to complain and that the charges need to be reduced. Customers continue to pay as much as £35 every time they exceed their overdraft limit or bounce a cheque, generating £3.5billion of revenue for the banks each year, when in fact it has been calculated that each transaction actually costs the banks a maximum of £2.
"The OFT has said in no uncertain terms that it believes the consumers are right and that these charges need to be reigned in." said Mr Askew. "This is currently the High Court’s finding and is therefore the law of the land unless the Court of Appeal overturns this decision.
"Therefore as its stands consumers will probably get their charges back." he said.
He continued by saying that the current economic crisis was caused by the "unmeasured greed of the big banks", and that bank charges are a reflection of this greed, something which needs to be put right.
"Customers should lodge their claim as soon as possible," Mr Askew concluded, "as they have nothing to lose but potentially thousands to reclaim."
© Fair Investment