Banks agree to charges test case

KTF

A number of UK banks, including HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide, have agreed to go to court in a test case for overdraft charges. Banks have been locked in a long-running battle with consumers over whether or not overdraft fees levied for unauthorised borrowing are legal.
Thousands of customers have been suing their banks for the return of charges.


The large number of claims have clogged up local courts, and banks were criticised for dodging the issue.


However, the Office for Fair Trading (OFT) said that the lenders approached the UK's financial watchdogs in order to sort out the problem and agreed to the test cases in England and Wales, Scotland and Northern Ireland.
The OFT said that on Friday it would commence proceedings in England's High Court for "a declaration on the application of the law in respect of unauthorised overdraft charges".


"The banks do not accept that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply. The OFT believes that they do and is seeking to establish this legal principle clearly in the court," it added.
"The OFT considers that a quick determination of this point of principle will assist in securing a clear and orderly resolution of the fairness of these charges."


To date, the banks have been reluctant to contest such cases, usually settling out-of-court.


So far no bank has outlined the case for its charges in open court.
If a bank were to do so and lose its argument that the charges were fair, it could lead to many more bank customers getting refunds.


Banks have already had to pay out millions of pounds in refunded bank charges.

From: http://news.bbc.co.uk/1/hi/business/6918140.stm


Whilst I don't totally agree with the whole 'claim back your charges' issue I think this is a good idea because then there will (hopefully) be a ruling one way or the other at last and the whole issue can be put to bed.

ManAtHome

Better title may be "banks are dragged kicking and screaming into test case"...

Martin on C4 now.

ashcarrot

Oh I loved watching martin battling the case, it made me laugh, sock it to her

dolce_vita

But all refunds have been frozen until after the court case.

Edinburghlass_2

http://www.financial-ombudsman.org.uk/faq/bank-charges.html

andysstuff_2

OK - my GF got a letter from Barclays Tuesday offering her £195. She agreed and sent the paperwork back that evening, so they should have got it today.

Question is, will this be paid or put on hold???

andysstuff_2

bummer :-(

gt94sss2

andysstuff wrote: »

OK - my GF got a letter from Barclays Tuesday offering her £195. She agreed and sent the paperwork back that evening, so they should have got it today.

Question is, will this be paid or put on hold???

The banks will still need to make a note of any claims lodged, and will have to honour offers to settle claims that were made before the test case and waiver were announced.

Regards
Sunil

natweststaffmember

Nothing has really changed with claims except that banks may not want to pay out on excess overdraft fees. Unpaids and referral fees do not form part of the test case, so they are definitely FAIR GAME

noh

andysstuff wrote: »

OK - my GF got a letter from Barclays Tuesday offering her £195. She agreed and sent the paperwork back that evening, so they should have got it today.

Question is, will this be paid or put on hold???

I think it will be paid.
If you read through this:-
http://www.financial-ombudsman.org.uk/faq/bankcharges-testcase-quickguide.pdf

It says you can accept offers already made but if you decline an offer the matter cannot be resolved unil after the court decision, see section 5


Nigel

oldagetraveller

ashcarrot wrote: »

Oh I loved watching martin battling the case, it made me laugh, sock it to her

Why, did he throw a childish, dummy spitting, foot stampimg tantrum again as he did on GMTV some weeks ago?