Banks defend themselves in test case
A number of banks in the UK have filed a defence with regards to their overdraft charges in preparation for a test case that is to be heard next year. The charges are those applied to customer accounts when they exceed their overdraft limits, and currently banks are charging close to £40 in some cases per charge, but campaigners claim that the actual cost to the banks is just a few pounds, which means that they are making an illegal profit the state.
Many customers have claimed back their charges going back up to six years, but although they have issued refunds banks have not admitted any liability or wrongdoing and continue to apply the charges. The row over bank charges has been raging for over a year now, and both campaigners and regulators have stated that the charges are unfair and unjust. The test case is scheduled for January of 2008, where it will finally be determined what a fair amount for banks to charge will be.
A number of banks have filed their defenses with the High Court, along with the Nationwide Building Society. Banks have argued that not only are the charges fair but customers agreed to pay the charges when signing up for the account, as the information is all there in the small print. Over £550 million has been reclaimed from banks by over 300,000 customers so far, but banks are still placing charges on customers' accounts when they exceed their overdraft limits.
An HSBC official stated: "The charges cannot be contrary to the requirement of good faith or unfair provided that the bank deals with the customer fairly and openly at the time of the conclusion of the contract
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