Loki
11-25-2009, 09:44 AM
Customers angry as banks win battle over overdraft charges (http://www.metro.co.uk/news/article.html?Customers_angry_as_banks_win_battle_o ver_overdraft_charges&in_article_id=777747&in_page_id=34)
Wednesday, November 25, 2009
Campaigners were shocked today as High Street banks won their appeal over unauthorised overdraft fees - meaning many people will miss out on refunds.
The verdict result was a setback for tens of thousands of customers whose refund claims have been frozen while the test case went through the courts.
The Supreme Court ruled in favour of the seven major banks and a building society, which had challenged earlier decisions that the charges come under "unfair contract" rules and were therefore subject to regulation by the Office of Fair Trading.
Handing down the unanimous ruling today Lord Phillips, president of the Supreme Court, said: "It may be open to the Office of Fair Trading to assess the charge under other criteria."
Customers who go into unauthorised overdraft or breach their agreed limit can be charged as much as £35 or more for a single bounced payment.
Campaigners claim the actual cost to the banks could be as little as £2.50.
If the banks had lost the test case, it could have cost them £2.6billion a year in lost revenue and led to their having to make refunds of up to £1billion.
Before refund claims were frozen, banks had already paid out more than £559million to customers who complained about "rip-off" overdraft charges.
But many of the high street banks have already changed the structure of the fees they charge people who go into the red, with or without permission.
Anti-charges campaigner Martyn Lewis, of moneysupermarketcampaign.com, was gloomy about people's chances of now winning back money from previous charges.
He said: "My fingers are crossed but I'm not feeling too hopeful.
"To lose at this stage, on a legal technicality, is absolutely devastating.
"There are going to be millions of disappointed people out there."
He called for politicians to intervene to ensure "these abominable and unfair charges cannot be levied again on people".
The test case to decide the legal issues thrown up by the dispute was brought jointly by the OFT and Abbey, Barclays, Clydesdale, Halifax Bank of Scotland and Lloyds TSB, which are now part of the same group, HSBC, Royal Bank of Scotland Group and Nationwide Building Society.
Wednesday, November 25, 2009
Campaigners were shocked today as High Street banks won their appeal over unauthorised overdraft fees - meaning many people will miss out on refunds.
The verdict result was a setback for tens of thousands of customers whose refund claims have been frozen while the test case went through the courts.
The Supreme Court ruled in favour of the seven major banks and a building society, which had challenged earlier decisions that the charges come under "unfair contract" rules and were therefore subject to regulation by the Office of Fair Trading.
Handing down the unanimous ruling today Lord Phillips, president of the Supreme Court, said: "It may be open to the Office of Fair Trading to assess the charge under other criteria."
Customers who go into unauthorised overdraft or breach their agreed limit can be charged as much as £35 or more for a single bounced payment.
Campaigners claim the actual cost to the banks could be as little as £2.50.
If the banks had lost the test case, it could have cost them £2.6billion a year in lost revenue and led to their having to make refunds of up to £1billion.
Before refund claims were frozen, banks had already paid out more than £559million to customers who complained about "rip-off" overdraft charges.
But many of the high street banks have already changed the structure of the fees they charge people who go into the red, with or without permission.
Anti-charges campaigner Martyn Lewis, of moneysupermarketcampaign.com, was gloomy about people's chances of now winning back money from previous charges.
He said: "My fingers are crossed but I'm not feeling too hopeful.
"To lose at this stage, on a legal technicality, is absolutely devastating.
"There are going to be millions of disappointed people out there."
He called for politicians to intervene to ensure "these abominable and unfair charges cannot be levied again on people".
The test case to decide the legal issues thrown up by the dispute was brought jointly by the OFT and Abbey, Barclays, Clydesdale, Halifax Bank of Scotland and Lloyds TSB, which are now part of the same group, HSBC, Royal Bank of Scotland Group and Nationwide Building Society.