Judge freezes bank charges on test case claimant

24 August 2007
A judge has ruled that Barclays must stop taking any further bank charges from the account of one of their customers until the case they have brought against the bank is settled.

The BBC has reported that Nadine Fry is suing Barclays for £1,384, which, should she be successful, will set a legal precedent for other customers to claim back the money they were charged for exceeding overdrafts and bouncing direct debits, which have been deemed disproportionate by the Office of Fair Trading.

British banks will be disturbed by Judge Abrahams’ decision to suspend further charges until an outcome is reached, as other judges around the country could adopt a similar practice.

A spokesman for the Judicial Communications Office (JCO), which speaks on behalf of judges, told the BBC: “This is not a general policy - each case is assessed on its own merits.”

In total, the five main banks have refunded customers with £400 million in unfair bank charges since January, with Barclays paying £87 million of it.

However, the FSA has recently awarded banks a waiver to cease paying out further refunds until the legality of the charges has been agreed upon in a test case planned for next year. Banks have requested that courts suspend all existing legal action against them, but the courts have declared that it is up to individual judges to decide.

Until the matter is settled, the Financial Ombudsman Service (FOS) has also decided to stop dealing with the thousands of similar complaints it has been receiving.

Marc Gander of the Consumer Action Group told the BBC the Luton judge's decision was both just and encouraging. “This is what should have been done from the start to maintain fair play.”

Learn more about unfair bank charges and claim them back