Banks lose appeal over bank charges

Following an appeal that was filed last year with regards to the bank charges High Court battle, banks have learned this week that they have lost their case, and that the Office of Fair Trading will be given the go ahead to assess banks’ terms and conditions for fairness, which includes assessing the fairness of charges made for unauthorised overdraft use, bounced cheques, and returned direct debits.

The presiding judge in the High Court case ruled in favour of the OFT last year, but the eight major banks involved in the battle lodged an appeal. However, after hearing the appeal judges at the Appeals Court still ruled in favour of the OFT, which means that banks could soon be paying out a fortune to customers whose claims for returned bank charges were put on hold prior to the test case, which began a year ago.

It is thought that the banks will now try and persuade the House of Lords to allow them to lodge another appeal, although judges at the Appeals Court did try and warn against this. However, the Oft is delighted with the results, and for consumers it means that reclaiming their money could be getting ever closer.

An official from 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.”