Hurrah for bank charge claimants!
Today, the Appeal Court has ruled that banks must wait for the Office of Fair Trading to decide on whether the banks have a right to charge customers on unarranged borrowing fees. We all know the situation – you’re in your overdraft as it is, and then direct debits, standing orders or cheques come in ‘unpaid’ or ‘bounce’. The bank stings you with a charge for each unpaid item – often to the tune of £35 per item. We were on the verge of needing a cheapo payday loan just to cover ourselves!! It seems steep and a few years ago a test case came to light which snowballed so much so that soon, tens of thousands of customers were claiming back what they saw as unfair charges.
Almost a billion pounds were paid out by banks to customers. But banks felt that the charges were not an unreasonable measure and took the case to the High Court and Appeal Court. Today, the Appeal Court has reached a unanimous decision that the OFT must decide on what happens next. Meanwhile, thousands of cases remain frozen in county courts until the final decision is reached later this year.
Consumer groups are delighted at the Appeal Court’s ruling, while the British Bankers Association has argued that they continue to believe that the 1999 Unfair Terms in Consumer Contracts regulations do not apply to these charges.