Bank Charges Test Case Delayed

by Stewart Douglas

Story link: Bank Charges Test Case Delayed

The high-profile OFT test case to determine the legality of bank charges to consumer customers straying into unauthorised overdrafts has been delayed today as a result of conflicting commitments from the judge in charge of the case, in what has been seen as an initial setback in what will inevitably become one of the most important legal decisions for the consumer banking customer.

The test case had been pencilled in to begin today, and has seen much media attention after the high profile consumer revolt against the periodic charges levied by the banks.  However as a result of time pressures with the judge concerned, the case start date has been pushed back, potentially for a further week, leaving the legal position unclarified for the duration.

In practical terms, this means that those customers currently in the midst of reclaiming their charges could face even further delays, with all cases frozen until the High Court clarifies the position following this test case, which has been brought by the OFT against several notable high street banks.

As a result of the increase in consumer awareness, the number of cases brought against banks and in front of the Ombudsman regarding back dated fees, which has resulted in waves of settlements from retail banks and a handful of court cases in the small claims courts.

This case has been brought in front of an authoritative court as a clarification of the current legal position, and has been taken as part of the OFT’s role as a consumer watchdog.  It has seen a number of significant high street banks and the Nationwide building society, although all other banks have signed up to agree to the decision of the High Court when it does finally sit to hear the case.