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One million snubbed as banks win overdraft charges fight
MILLIONS of people who are fighting to get overdraft charges refunded were dealt a massive blow yesterday when the banks were handed a shock victory at the Supreme Court.
Britain's highest court ruled the charges do not come under "unfair contract" rules, meaning they are not subject to regulation by the Office of Fair Trading (OFT).
Consumer campaigners said the decision gives the banks "carte blanche" to charge what they want and the customers whose claims were put on hold since a test case was launched in 2007 – estimated to be more than a million – will almost certainly not get their refunds.
It is estimated a further eight million people have paid charges since July 2001, but not yet submitted a claim. Marc Gander, of the Consumer Action Group, said: "If we do not continue to resist it really looks as if they (the banks) will have carte blanche to charge what they want.
"The only hopeful thing is that the banks have had a real scare, they now realise how deeply unpopular they are."
Which? chief executive Peter Vicary-Smith said: "This is a bitter blow for the millions of people who have been patiently waiting to get their bank charges back. Not only does it give banks licence to charge what they like for unauthorised overdrafts, but it could have ramifications for other areas of personal finance.
"The banks now have no excuse for introducing other fee charges." Unauthorised overdraft charges raise about 2.6bn of revenue a year for banks.
Industry commentators had warned if they lost the lucrative income stream they would look for other ways to recoup it, such as through imposing a flat monthly fee on current account customers or charging for every transaction people carried out.
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Saturday 26 May 2012
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