The next step in the bank charges battle
June 14, 2008
Just weeks ago the nation found out the results of the first stage of the bank charges high court test case, when the presiding judge ruled in favour of the Office of Fair Trading and gave the agency the power to assess banks’ terms and conditions – including charges – for fairness. However, at present no further action has been taken, as the banks are being given time to appeal. The ruling is only the first stage of the process, as the banks can appeal, and even if they do not appeal the result of the OFT assessment will still have to go through.
It has now been revealed that the eight major banks that have been battling it out in the courts with the Office of Fair Trading will be meeting up with the OFT next week in a two day case conference. It is at this time that the banks will need to decide whether or not they wish to appeal against the decision of the judge, and this will determine the next stage in the bank charges case. The decision to appeal could mean that the case is delayed by some weeks. However, if the banks decide not to appeal against the decision the OFT will be able to get on with its assessment into the fairness of these charges.
An official from the British Banker’s Association stated that the two day conference would enable certain points to be clarified, and added that the banks had not yet made a decision on whether to appeal, but would be doing this over the two day period – this is the deadline for the banks to come to their decision. Banks will only be able to appeal against certain aspects of the ruling rather than the entire ruling.
Campaigners are hoping that the banks will admit defeat and decide not to appeal against the ruling, as this will save a great deal of time and will eliminate the need for delays. There are many cases that are still pending in the courts, and a decision to appeal may mean that consumers are left waiting around even longer to reclaim their past charges. In some instance banks were charging up to £40 per fee, which campaigners state was around ten times the cost that was being incurred by the bank for unauthorised overdrafts, bounced cheques, and returned direct debits.
One official from the Consumer Action Group recently stated: ‘So far, the judge has said that these charges come within the consumer regulations. If the banks do not appeal, then the whole thing can move onto the central argument of whether the charges themselves are fair.’
In the event that the banks decide not to appeal an assessment can begin right away, and the Office of Fair Trading should be able to deliver its verdict in July. At this stage the case will have to go back to the courts for finalisation.
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