Banks urged to concede defeat on unreasonable charges

by Gill Montia

Story link: Banks urged to concede defeat on unreasonable charges

Consumer group, Which?, is urging High Street banks to reimburse customers who are reclaiming unauthorised overdraft fees.

Yesterday’s ruling in the High Court did not settle the case brought by the Office of Fair Trading (OFT) over penalty charges, but it gave the OFT the right to assess whether the terms and conditions under which the charges are made are fair.

If the OFT finds that the terms and conditions are unfair banks will have to repay millions of pounds to their account holders.

Which? and other consumer groups are now putting pressure on the banks to accept that they have lost and not to take the case to appeal, which would delay the outcome to 2009.

The final date set for an appeal to be lodged is 22nd May and banks struggling with the credit crisis may opt for a delaying tactic.

Which? is also petitioning the Financial Services Authority (FSA) to remove a waiver under which banks could postpone dealing with claims for unfair charges until the outcome of the court case is known.

If the waiver is revoked, thousands of cases put on hold in the County Courts will be heard.

The consumer group estimates that bank customers are paying a collective £111 in overdraft charges every second.