Consumers hoping to recover unfair bank charges may have to wait years to be compensated following banks’ decision to appeal against a court ruling. A judge ruled last month that bank charges for breaching overdraft limits were illegal under the Office of Fair Trading unfair contract rules.
However, Mr Justice Andrew Smith, a commercial judge, decided to give the banks leave to appeal against his earlier ruling which had ruled in favour of consumers. If the appeal is unsuccessful, banks will be forced to compensate customers for the excess charges paid over the course of the past six years. Discussions are set to recommence in July.
The Office of Fair Trading claims that banks earn up to £3.5 billion a year from fees on unauthorised overdraft charges, with some banks charging as much as £39 for each bounced payment which would cost the bank around £3. To date, banks are believed to have repaid an estimated £500 million, though with over 1 million compensation forms downloaded from the internet before the start of the case, banks will be faced with far greater claims in the future.
Banks Appeal Against Overdraft Charge Decision
Banks Appeal Against Overdraft Charge Decision
Tue, 27 May 2008
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