Posts Tagged 'bank charges'

Following a disappoint bank charges verdict back in November, during which the Supreme Court overruled the decision of the High Court and Appeals Court that the OFT could assess the fairness of bank charges, consumers have been dealt another blow. The OFT decided to take some time following the disappointing Supreme Court hearing to assess what their next step would be. Despite hints by the Supreme Court that the charges could be challenged under another area of law, the OFT announced this morning that it will not be challenging further.

MoneySavingExpert.com, with the help of a QC compiled information this month that they believe opens up another legal avenue for challenging the fees. However, the OFT said this morning that while they had considered going forward under the Consumer Credit Act but believed it to be more appropriate for individuals to take their own individual cases to court.

What this unfortunately means is that two and a half years of work by the OFT has ended in defeat, with the banks essentially, as things stand, free to charge what they like. The OFT did address its concerns for the lack of transparency in bank charges and said it hopes to come to some voluntary arrangement with the banks over them.

Consumers will be disappointed. However, it is largely thought that one successful case brought to the courts by an individual will set a precedence for other cases.

In an immensely unexpected decision, the Supreme Court has overturned the decision by the High Court and Appeals Court in the ongoing bank charges claims case. The ruling means that Office of Fair Trading has been deemed NOT to be able to make an assessment over the fairness of charges.

This will come as a bitter blow to the one million consumers whose claims have been on hold since July 2007 and will be disappointing to an estimated 8 million others who have incurred charges over the past 8 years.

This does not necessarily mean that people are unable to claim bank charges. It means that the Office of Fair Trading does not have the authority to insist that banks refund them. This in turn means that any consumer wishing to pursue a bank charges claim will have to take their individual case to the courts. Most experts had previously expected the Supreme Court to uphold the decisions of the High Court and Appeals Court.

Marc Gander of the Consumer Action Group, the lobbying group behind the campaign, said, ‘We are totally stunned and I think the banks themselves must be stunned. I am sure this isn’t the end of the issue and the OFT will pursue the issue further in the European courts. The charges are excessive and cannot be allowed to persist.’

Whichever way the ruling went, it was likely that the case would continue through the European Courts. So in terms of when the case will be wrapped up, the ruling will probably make little difference. The impact it has had, however, is to dash the hopes of millions of consumers who have incurred excessive banking charges since 2001.