Bank Charges Court Case
27th July 2007
The Office of Fair Trading (OFT) and certain Banks have agreed to bring a test case in the Commercial Court to resolve legal uncertainties surrounding the enforceability of unauthorised overdraft charges. Such charges have been the subject of an ongoing OFT formal enquiry, a growing number of cases issued by account holders in court and a significant number of complaints by account holders provided to the Financial Ombudsman Service.
The test case will seek to resolve whether contractual provisions entitling banks to levy these charges are unenforceable at common law or under the Unfair Terms in Consumer Contracts Regulations 1999. In conjunction with the test case, the Financial Services Authority (FSA) will allow banks to suspend dealing with any claims for repayment of overdraft charges filed against them until the test case has been decided. However, the banks will still need to make a note of any claims lodged, and will have to honour offers to settle that were made before the test case and FSA waiver were announced.
Solar Accountants will continue to take new instructions from clients who wish to reclaim unfair bank charges. However we would advise clients that their claims will take significantly longer to progress as a result of the FSA's decision to allow the banks not to progress such claims under their normal dispute procedures until the court case is resolved.
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Ms P was recently awarded compensation of £11,255.
Ms P, Morayshire
Mr G was awarded compensation of £27,390.
Mr G London