Claim Bank Charges Back - Helping you to reclaim Unfair Bank Charges!

Banks have largely won the latest round of a High Court battle over the fairness of overdraft charges.

Judge Mr Justice Andrew Smith says that most bank customers will not be able to challenge under common law charges levied mostly between 2001 and 2007.

But NatWest customers might still have the legal avenue open to them after he failed to give their terms a clean bill of health.

More cases will be heard before the bank charges debate is concluded.

The ruling comes after a three-day hearing in July and has an impact on the thousands of claims for the refund of overdraft charges frozen in county courts.

Frozen

These hearings were suspended when the Office of Fair Trading and eight banks agreed on a test case to clarify the situation with overdraft charges.

These hearings will almost certainly remain frozen for the foreseeable future.

The OFT wants legal confirmation that it can rule if these charges of up to £35 are fair or not. Customers complained they had unfairly been overcharged hundreds, and sometimes thousands, of pounds when falling into the red.

But the banks have been aiming to protect the estimated £3.5bn a year of income they gather by charging people for going overdrawn.

The OFT has been investigating the fairness of these controversial bank charges since April 2006.

Latest hearing

The judge's latest ruling was focussed on whether historic bank terms are unfair penalties under common law, and so available to be challenged by customers who have been charged for going overdrawn.

He decided that Barclays, Clydesdale, HSBC and the majority of Abbey's terms were unable to be challenged.
A Barclays spokesman said they were "pleased" with the decision.

The same was true for HBOS, except for Intelligent Finance's terms which required more examination. More discussion was also needed regarding the terms and conditions of Lloyds TSB's accounts.

But the judge said that there was further work to do by the Royal Bank of Scotland Group, which owns NatWest, for him to give them clearance.

"Some banks will be breathing a sigh of relief as the judge appears to have decided that these charges were not penalties under common law," said Marc Gander, of the Consumer Action Group.

He said it was "extraordinary" that the judge seemed to have decided that customers were not charged because they had breached a contract.

But those with claims will be affected by a number of High Court decisions to come.

There will be an appeal by the banks against the OFT's initial High Court victory in April that ruled that the OFT can assess whether fees are unfair.

Another High Court hearing is expected to start in the new year on the substantive issue of whether or not bank overdraft charges are unfair.

Only after these hearings, and any possible subsequent appeals, will people finally know whether they can claim back overdraft charges.

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