January Bank Charge Test Case
This spring should see the end of a long wait for customers of the High Street banks that have been accused of making unlawful charges for unauthorised overdrafts.
It is nearly two years since the Office of fair trading (Oft) first reviewed the controversial charges and matters will now be settled in the High Court.
The case is scheduled to begin on 14th January, when the Court will determine the legality of charges made to account holders who exceeded overdraft limits and bounced cheques and direct debits.
The banks could be ordered to refund their account-holders and only charge for the administration costs of their regulars’ misdemeanours.
Over £800 million has already been awarded out by the banks in refunds, although this process has been suspended until the outcome of the test case brought by the Oft.
If the Oft is successful, some estimates put the amount owed by banks to their patrons as high as £4.7 billion.
The Office of fair trading has already offered the major banks a chance to establish an acceptable level of charges prior to the Court date, but the banks have maintained their stance that the charges are legal and fair.
Last year, the chief executive of the British Bankers’ Association, Angela Knight, stated: “The banks have always been seriously of the view that the fees they charge clients are fair and clear. The court case will clarify these points and provide demonstrability for customers and banks identical.”