They know no financial shame
March 1st, 2009
The ongoing and almost tortuously slow case brought by the Office of Fair Trading (OFT) against eight big UK banks edged another step towards resolution this week.
An appeal by the eight banks, against a High Court ruling that a regulator can investigate the fairness of overdraft charges, has been thrown out. The Appeal Court ruled that the Office of Fair Trading (OFT) has the power to investigate the issue of bank charges.
However, the banks are expected to ask the House of Lords for permission to appeal further, against the appeal judges’ advice.
While this happens tens of thousands of claims currently on hold in the English and Scottish legal systems will stay frozen.
In a statement the OFT said, “the court found that these terms are not part of the core or essential bargain between a consumer and their bank, and therefore consumers do have protection under the Unfair Terms in Consumer Contract Regulations (UTCCRs) for these terms.”
The presiding judge, Sir Anthony Clarke, dismissed the banks’ appeal and told them they should now allow the OFT to decide whether their charges were fair or not. He said four High Court judges had now come to the same conclusion on the issue of the OFT’s jurisdiction.
However, in a less than shocking response, the British Bankers’ Association (BBA) said its members still disputed the decision of the High Court and now the Appeal Court.
The Consumer Action Group (CAG) said the bank’s decision to appeal further was “amazing” and added, “they know no shame.”
The banks had argued last year, in both the High Court and the Appeal Court, that their overdraft charges and cash advance fees fell outside the scope of the 1999 Unfair Terms in Consumer Contracts regulations. The three Appeal Court judges rejected this view.
Bank charges campaigners were understandably delighted with the Appeal Court ruling. The consumers’ association Which?, said: “It is great to see the Court of Appeal being so unequivocal in their guidance to the banks that this is the end of the road.”
The litigation between the OFT and eight banks started in July 2007 and now looks likely to run into 2010. If the OFT ultimately wins the case, several billion pounds could potentially be refunded to millions of bank customers.
Since the test case started, tens of thousands of claims for the return of overdraft charges have been frozen in the English and Scottish legal systems, waiting for a final decision on whether bank overdraft charges are fair or not.
In 2007, when the campaign for the return of overdraft charges was threatening to swamp the court system, the UK’s banks were estimated to have repaid more than three quarters of a billion pounds to about 378,000 customers.
A further 65,000 claims are known to be on hold in the English county courts alone. All county courts have now been sent a letter to this effect, from the deputy head of Civil Justice in England & Wales, inviting local judges to continue the existing stays, until either the House of Lords or the OFT’s investigation come to a conclusion.
I can only echo the words of the CAG spokesman and marvel at the complete lack of shame and dignity displayed by the banks. Their behaviour when faced with the removal of one of their most lucrative scams reminds me of a young child when their favourite toy has been confiscated.
It seems that their scam has been rumbled. While they are fighting tooth and claw to save it I would bet good money that they are also planning their next money spinning wheeze.
