OFT Loses Bank Charges Battle

The Office of Fair Trading has lost its battle in the Supreme Court to decide whether banks can fairly impose charges that go above the costs they incur.

A 2-year legal case concluded a 4-year campaign to win refunds by those who considered that they had been overcharged by banks after they had fallen into unauthorised overdrafts. But the right of the FSA to decide whether the charges were excessively high has been held back from them.

The Supreme Court ruled against earlier finding by both the High Court and the Court of Appeal, declaring that the OFT did not have the right to decide whether bank charges were fair. This has removed the probability of millions of bank customers attempting to claim back an estimated £20 billion in what they called excessive charges.

The Supreme Court ruled that the overdraft charges ’formed part of the process of renumeration of the package of services that the banks provide to their current account customers’.

The banks have promised to work swiftly to bring to a conclusion all outstanding complaints. It is likely that in the light of the Supreme Court ruling that many of these will now be thrown out with no recourse to appeal.

It was expected that today’s ruling would go in favour of the OFT and that the FSA would then be able to lift its waiver on further claims, allowing millions of customers to start their reclaim process. But those outstanding claims are now worthless, unless the OFT can take the decision to the European Court of Justice and have the decision over turned.

The flip side to this decision is that it has also been talked about this week that banks might introduce levies such as cash machine charges in order to recoup lost income through reduce unauthorised charges. Hopefully, these expected charges can be held off and those customers that keep their accounts in good standing and never go overdrawn will not be forced to pay charges for what has traditionally always been a free banking service.

25th November 2009

2010
February
26th House Prices Falling Again
11th Bank of England Spreads A Forecast Of Gloom
6th Bank of England Stops Printing Money
3rd Halifax Refusing Cheap Deals To Home Movers
January
20th The pound has reached a 4 month high against the Euro
20th UK Banks Might Face Insurance Levy
13th Credit Card Intest Rates Up
11th 6% Have Paid Mortgage With Plastic
8th Bank May Be Forced To Raise Interest Rates
7th Interest Rates Frozen
6th Iceland Cold On Payback
4th Virgin Money Might Attempt To Buy ’Good’ Northern Rock
2009
December
30th Land Registry Shows 0.9% House Price Increase
22nd OFT Throw In The Towel
21st OFT To Abandon Bank Charges Case?
18th OFT To Announce Next Bank Charges Step
16th Halifax Customers Vote With Their Feet Over Bank Charges
November
25th More Families Investing In Safes
23rd The End Of The Cheque
October
12th First Time Buyers Suffer Compared To Existing Mortgage Holders
September
30th Is The 90% Mortgage Making A Comeback?
29th Summer Mortgage Increases Halted
23rd Summer Jump In Mortgage Lending
18th Mortgage Lending Down
16th Inflation at 5 year low
16th More Premium Bond Winners
10th Interest Rates Held
6th Buyers Beware Of Stamp Duty Freeze
2nd Negative Net Borowing
June
13th Less mortgages for first time buyers
January
8th Record Low For Base Rates
2008
December
5th Base Rate Chopped, More Expected
1st RBS Pledge on Arrears
1st Base Rate To 2%?
1st Mortgage Lending Crashes
November
28th House Prices Fall 10%
21st Home Sales Rise
21st 1.3m Homeowners Stuck
12th Tracker Rates Rising
6th Lowest Rates In 53 Years
5th Pressure for 1% Cut
October
20th Libor Rate Falls
14th No Change For Libor Rate
8th Bank Of England Shock Rate Cut
2nd Pressure For Rate Cut
September
30th 10% of Mortgage Deals Axed
30th Libor Rate Jumps
29th Lloyds Latest To Raise Its Rates
29th Mortgage Lending Drops 98%
26th More Banks Raise Cost Of Borrowing
26th Rate Cut On The Horizon
25th HSBC Charges First Time Buyers More
23rd Rate Cut Was On The Horizon
22nd Banking Chaos Could Increase Mortgages
18th Lloyds To Take Over HBOS
15th More Housing Rescue Fears
11th Barratt Insures House Prices
9th Estate Agents Sell 1 Home Per Week
8th Rate Cuts Could Come...