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Bank charges update 26th November 2009

SUPREME COURT FINDS IN FAVOUR OF THE BANKS

In a shock decision the Supreme Court (formerly the House of Lords) found in favour of the banks yesterday advising the Office of Fair Trading that they could not challenge the charges levied by 7 high street banks under regulation six of the Unfair Terms in Consumer Contract Regulations.

The five members of the Supreme Court, the highest court in Britain, ruled unanimously that the charges were not covered by “unfair contract” rules and therefore were not subject to regulation by the OFT.

This is particularly difficult to understand when the OFT won the initial case and the subsequent appeal, however it is clear now that whilst the OFT do not agree with the charges they must look for another way to challenge the banks over their charging structure.

This comes as a bitter blow to customers who have been waiting for the outcome of this hearing for over 2 years now, as it is unlikely that they will ever be able to recover charges levied on their accounts.

The OFT had advised that they will issue a response some time in December but it is likely that in the meantime the banks will be writing to all customers that have made a bank charge complaint to advise that the court hearing has concluded and they do not have to pay any charges back.

We will await a statement from the OFT before deciding our next course of action, and in the meantime we will not be processing any new claims.