Bank charges verdict delayed until July
May 3, 2008
At the beginning of this year a landmark High Court test case into bank charges in the UK was launched, having been brought by the Office of Fair Trading, which insisted that the charges that banks applied for unauthorised overdrafts, bounced cheques, and returned direct debits were unfair as they came nowhere near reflecting the costs incurred by the banks. Many banks were applying charges of between £20 and £35 per fee, whereas the cost to the banks was only around £2-£5 according to OFT officials.
Following the case the presiding judge decided that he needed to take some time to consider all of the facts and evidence relating to the case, and therefore most industry officials had been expecting the long awaited verdict to come in April. However, according to a recent report the judge now needs more time to come to his decision and therefore the verdict into the test case has now been delayed for a further three months until July.
The decision to delay the verdict for another three months is likely to come as a disappointment to all concerned. Banks are anxiously waiting for the decision in order to find out whether they will be liable to repay billions of pounds in past bank charges back to consumers. Many consumers who have claims still pending in the courts are waiting to find out whether they will receive the refund that they have requested. The Office of Fair Trading is waiting to find out whether its landmark case against the British banking system has been successful.
If the verdict rules in favour of the OFT the major banks could find that they have billions of pounds to repay to customers, who have been claiming back charges going back up to six years.
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