OFT thinks bank charges are unfair

The subject of bank charges has been dominating the financial headlines for over two years now, and many consumers claimed back their overdraft charges going back up to six years after they were branded unfair and unlawful by the Office of Fair Trading. All of this culminated in a High Court test case, which took place earlier this year.

Following the first stage of the test case the Office of Fair Trading was given the go ahead to assess banks’ terms and conditions in order to check them for fairness, including assessing the bank charges applied for exceeding the overdraft limit, bounced cheques, and returned direct debits.

Following its initial assessment the OFT has indicated that it does feel that the bank charges applied by the UK’s banks are unfair. One official from the OFT recently stated: “At this stage, no bank’s terms have been given a clean bill of health and all banks remain under investigation.”

The OFT has also written to the banks whose terms and conditions are being assessed by officials, and the agency said: “The purpose of the letters is to start a dialogue with each bank to enable us to reach final conclusions as to whether the terms are unfair, and to identify which issues may need to be resolved in court proceedings.”