OFT Argument Flawed, Says Nationwide

by Stewart Douglas

Story link: OFT Argument Flawed, Says Nationwide

The High Court has today heard that the Office of Fair Trading’s arguments against consumer bank charges have a number of “flaws”, according to a statement made by Nationwide QC Geoffrey Vos in the high profile bank charging test case.

The suggestion came as the QC respresenting Nationwide, Geoffrey Vos, laid out the building society’s case in favour of bank charges, which followed similar lines of argument as those expressed over the last few days, suggesting bank charges represent partial funding of the overall current account and overdraft service provided to banking customers.

It was suggested by Mr Vos that Nationwide agreed with the banks’ position over funding overdrafts and unauthorised withdrawals, which he pointed out amassed some £600 million every day and was an essential extra-contractual service provided by the banks, which incurred real expenditure on an ongoing basis.

Mr Vos argued that unfair contract legislation didn’t apply to bank charges because they were an integral part of the service provided to banking customers, and that those that made use of this additional service were understanding as to the need to charge customers accordingly.

The OFT argument rests on the Unfair Contract Terms legislation, which regulates unfair terms in consumer contracts, such as those surrounding current accounts and personal banking services, with the suggestion that bank charges as contractual provisions are unfair and unjust.

However with the potential implications for a decision against the validity of bank charges at a time where the banking industry is experiencing some of its toughest conditions for some years, it looks as though the OFT case may find difficulties in all practicality.