... Overdraft Fees ... PPI ... Charges ?

What has happened?

The Banks appealed the Judgment handed down by the High Court and affirmed by the Court of Appeal. The original Judgment said that banks terms regarding unauthorised overdraft charges were able to be assessed under the unfair terms in consumer contracts regulations(UTCCR 1999). If the disputed terms are found to be unfair the banks would have to repay consumers any charges they have incurred.

Five Law Lords heard submissions from Jonathon Sumption QC and Geoffery Vos QC on behalf of the banks, and Jonathon Crow QC on behalf of the OFT, over the last three days.

This hearing has now concluded and we await the decision from the Law Lords. This is expected to be in October 2009 but could be as early as mid July.

The judgment will decide whether in fact bank charges can be assessed for fairness under the Unfair Terms in Consumer Contracts Regulations.

The OFT (acting for the consumer) are arguing the charges are too high and unfair contract terms. The Banks are arguing that the charges are part of the price of having a bank account and they can charge what they like.


Whats Next ?

It is entirely possible the Banks, or the OFT, will take the case on to The European Court of Justice.

If no further appeal is made and the OFT wins there are still further steps to be taken before consumers can expect to see any refunds.

1) The OFT need to conclude their current investigation into the fairness and level of the terms/charges

2) If they consider the charges/terms to be unfair they will seek voluntary compliance from the banks to a) reduce and b) refund

3) If the banks will not comply voluntarily the OFT will return to Court to request an injunction to force the Banks to comply.


It will only be at that point that consumers will know the process, amount and speed of any refund.

If the OFT lose they will still look at the level of charges under transparency, frequency and competition. This would result in lower future charges or a restructuring of bank accounts although it may not result in a refund to those already claiming.

In the meantime bank charges claims remain on hold, Hardship cases should refer to the Hardship Forum for help. We do not recommend putting business claims in the court system at the moment at all.

Credit card charges claims continue as normal - remember £12 is NOT a fair level.

Keep pressure up on the FSA to monitor the waiver properly.