Banks repay £750 million in unfair charges

by Gill Montia

Story link: Banks repay £750 million in unfair charges

Having studied the 2007 annual accounts of leading UK’s banks, the BBC estimates that during the year, over £750 million was repaid to customers who demanded the return of charges made for breaching their overdraft limits.

Five leading High Street banks alone have paid back a combined £549 million, broken down as follows: Lloyds TSB £76 million; Barclays £116 million; HBOS £122 million; RBS Natwest £119 million; HSBC £116 million.

However, worse may follow because it is estimated that UK banks could be liable to pay a further £1.37 billion for 2007, if the Office of Fair Trading is successful in a High Court test case brought to establish the legality of the charges.

Many claims by customers have been put on hold, awaiting a judgement in the court case, and the BBC calculates that a further £1.37 billion could have been paid out by the banks last year if the court had not granted a stay on new cases and some already in hand.

The stay does not prevent consumers registering new claims or banks making goodwill payments where there are special circumstances.