financial independence

Bank charges on hold

As you know I have been encouraging all readers of financial independence to reclaim their unlawful bankcharges a couple of my bank charge posts can be found below.

Reclaiming Bankcharges

Reclaim Bankcharges

But then on Friday the OFT (Office of Fair Trading) announced they were starting proceedings in the High Court for a declaration on the application of the law in respect of unauthorised overdraft charges.

Many thousands of complaints that these charges are unfair, have been received by the County Courts and the Financial Ombudsman Service from people wishing to reclaim their unfair bank charges. But the banks don't accept that the unfairness rules of the Unfair Terms in Consumer Contract Regulations apply.

The OFT believes the unfairness rules of the Unfair Terms in Consumer Contract Regulations do apply and wants to establish this legal principle clearly in the court.

I think the OFT hopes the test case will provide consistency for consumers in the way banks are dealing with complaints and put a stop to unreasonable charges forever.

The way in which banks have been ordered to repay charges by the courts should mean the banks are gonna lose this case which will surely cost them many billions of £'s.

The below banks have agreed to face the high court.

NatWest/Royal Bank of Scotland, Barclays, HSBC, Lloyds TSB, Halifax/Bank of Scotland, Abbey and Clydesdale – and Nationwide.

What does this mean?

Short term it means all unfair bank charge claims will be put on hold by the courts, longterm it could mean an end to unreasonable bank charges.

I think a longterm end unreasonable bank charges would be the best outcome as many people don't bother to reclaim these charges and they can cause people tremendous financial difficulty.