The Sun - Banks in dock over charges

A HIGH COURT test case begins today to determine whether banks charges of up to £30 a time are illegal.

Banks have raked in billions of pounds from unauthorised overdrafts and missed direct debits.

But they have also refunded about £1billion in out of court settlements to around three million customers who have claimed they have been overcharged.

Since the announcement of the test case – brought by the Office of Fair Trading in July - all claims have been put on hold.

And if the judge rules the penalties are NOT legal and fair, it could lead to millions more having their charges refunded.

The case is expected to last up to three months.

Doug Taylor consumer lobby group Which?, says: “The banks will be asked to demonstrate that the charges are a core term of the contract between the bank and the accountholder or that they are service charges.

“The OFT will try to demonstrate they are not.

“If the High Court judge agrees with the OFT, this should open the floodgates for compensation on a large scale for victims of unauthorised overdraft charges.

But critics say even if the test case does rule the charges illegal it could be bad news for the consumer.

Shorn of the £3.5billion revenue the charges bring in, the banks may well start charging for everyday banking, such as bringing in monthly fees.

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