Unfair bank charges: six more months to wait
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Following on from the post below, the banks have today been given an extra six months to contest the case brought against their unfair overdraft charges. This extends the period where all claims remain frozen, which has already been in place for a year, and means no refunds will appear for the foreseeable future.
The Financial Services Authority (FSA) said it has done this to help the courts decide the fairness of bank overdraft fees. Bank charge campaigners, on the other hand, said they were not surprised, but argued the situation was grossly unfair to customers.
Tens of thousands of bank customers have had their complaints put on hold pending a resolution on the legality of overdraft charges. Tens of millions of pounds are hoped to be divided between them if the case goes in favour of the consumers.
The FSA explained that it is extending the suspension of its normal rules, which require banks to deal with complaints promptly, because the High Court has still not decided if bank overdraft charges are unfair or not.
The FSA says it will review the waiver again before it expires at the end of next January. This means it could be extended even further.
A second round of High Court hearings involving the banks and the Office of Fair Trading (OFT), which may finally decide if bank charges are fair or not, is expected to start before the end of the year before Mr Justice Andrew Smith.
Earlier this year he ruled that the OFT had jurisdiction in the matter, and he has recently been asked to rule if fees levied under previous bank terms and conditions can also similarly be assessed by the OFT.
But any appeals on the issue of the OFT’s jurisdiction, or the fairness of the fees themselves, could drag out the issue far into next year.
There seems to be no end in sight for this issue which could have been solved by now if the banks had simply admitted they were in the wrong and refunded the money quickly.
All the signs are that the courts will continue to rule in favour of the customers, but the banks will fight to the end to guard their quick and easy but unjust stream of income, even threatening the future of free current accounts. This is a desperate tactic and must not be allowed to work.
