Customers stung by unfair bank charges are turning to the Office of Fair Trading (OFT) to demand that the case against the eight high street banks accused of unfairly charging customers for breaches of their accounts can go ahead after it was reported that the OFT is considering dropping the case.
MoneyExpert.com, who has been investigating the recent turn of events, found that the OFT would call a halt to proceedings if the banks reduced their charges voluntarily. However, 83% per cent of bank customers back the case in the hope that it will bring an end to the battle over bank charges.
While over half of bank customers agree in principle with the idea of paying bank charges, many of them feel that the current system of charging is confusing and only 17% claim to have understood how the charging process worked when they first opened their accounts. Unsurprisingly, 71% described bank charges as unclear and want greater transparency.
Following the announcement of the test case, which is intended to determine the correct level of charges to be levied at customers who breach the terms of their accounts, some banks have made changes to their charging system including adding monthly fees for overdrafts and cutting interest rates.
Sean Gardner, chief executive of MoneyExpert.com, explains: “The banks are starting to pre-empt the OFT by softening their terms and conditions, but the OFT mustn’t view this as an early victory.
“The only way customers can achieve a satisfactory, long term conclusion is by the OFT going to court. An out of court agreement between the OFT and the banks will only leave the waters muddy for the millions of customers reclaiming bank charges.”
Several banks have already made changes including the Alliance and Leicester which has dropped overdraft interest charges and replaced them with fees meaning customers with an authorised overdraft must now pay a maximum £5 a month and if they go into the red without permission, they will have to pay £5 a day for exceeding their limit.
First Direct, Lloyds TSB, HBoS and Abbey have also made changes and other banks are predicted to follow.
Learn more about reclaiming unfair bank charges