Ruling bank penalty fees expected in March

Following months of investigation, controversy, and outrage in relation to the charges that banks have been applying to consumers' accounts for years for going over their overdraft limits, the Office of Fair Trading is now expected to announce a decision next month with regards to the rate at which these fees must be capped. In a similar ruling last year credit card companies were made to slash their late repayment fees last year to a maximum of twelve pounds per charge.

At present banks are charging nearly forty pounds per charge in some cases, although the fees do vary from one bank to another. However, because the cost of going over the limit is minimal to the bank – estimated at just a few pounds – the excessive fees have been deemed unfair and unlawful by financial watchdogs and regulators. And because of this, many UK consumers have successfully managed to reclaim such fees going back six years, with many others in the process of doing so.

Although banks have been up in arms about having to repay these fees, so far none have actually turned up to court to justify these fees when action has been taken against them. In fact, in most cases banks have been making a full refund of fees to customers that contact them, although many have been using delaying tactics to put people off and others have been threatening those that reclaim their fees with closure of their accounts.

In the meantime, as we await the ruling from the Office of Fair Trading, the number of people attempting to reclaim these unfair fees is expected to rocket in the light of the record profits recently announced by the UKs top banks. The top five banks in the UK, including HSBC, Barclays, and Lloyds TSB, have announced collective profits of over forty billion pounds.