FSA extends bank charges waiver

by Gill Montia

Story link: FSA extends bank charges waiver

The Financial Services Authority (FSA) has extended a waiver that has allowed banks not to process customer complaints over unauthorised overdraft charges and has also held up county court cases brought by people seeking reimbursement for charges they consider excessive.

The extension will preserve the status quo until July, when hopefully a final judgement will have been made in a High Court test case brought by the Office of Fair Trading (OFT).

The case seeks to establish whether the terms and conditions under which the charges have been made are fair.

The seven High Street banks involved are currently appealing against an initial ruling by Mr Justice Andrew Smith that the OFT has the right to decide whether or not the charges are fair.

The ruling allowed the OFT to assess the banks’ terms and conditions for charging the fees under the 1999 Unfair Terms in Consumer Contracts Regulations but lawyers representing the banks have launched an appeal and are arguing that the regulations are not intended as a method of price control.

The extension has been offered to all the banks that signed up to the waiver in July 2008, or around 98% of the market.

However, it specifically excludes cases where hardship is involved and for this group of customers the FSA requires action from the banks.