Bank Charges Update

In April 2008  a test case brought by the Office of Fair Trading and a number of UK banks took place in the High Court. Mr Justice Andrew Smith found that the whilst  the charges levied by banks are not penalties, they are subject to fairness rules in accordance with  the Unfair Terms in Consumer Contracts Regulations and can be considered by the Office of Fair Trading. 

In October 2008 the matter progressed to the Court of Appeal and their decision in February 2009 confirmed that the charges can be assessed for fairness.  The banks have appealed this judgment in the House of Lords and a hearing took place in June 2009.  The judgment of the House of Lords is awaited.

The FSA and the Financial Ombudsman Service are presently keeping complaints relating to unarranged overdraft charges on hold and County Courts are generally staying claims pending the House of Lords decision

Anybody with charges that are nearly six years old will however need to considering issuing County Court Proceedings to avoid  arguments on limitation (normally there is a six period on breach of contract claims) notwithstanding that there are arguments that the test litigation stopped the limitation clock running in July 2007.

8 October 2009

Disclaimer

The contents of this article are for the purposes of general awareness only.  They do not purport to constitute legal or professional advice.  The law may have changed since this article was published.  Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances.