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The Sun - Bank charge case is delayed again
BRITAIN’S banks can appeal against a court ruling on overdraft charges which could cost them billions.
The decision means any claims against such charges will probably not be settled until next year.
The High Court ruled five weeks ago that the Office of Fair Trading may investigate charges on unagreed overdrafts.
If the OFT decides such charges are unfair, banks could be forced to repay millions to customers charged for bounced cheques or for going into the red without permission.
But Mr Justice Andrew Smith said yesterday he “was minded” to let the banks appeal against that decision. The banks — ABBEY, BARCLAYS, CLYDESDALE, HBOS, HSBC, LLOYDSTSB, RBS and building society NATIONWIDE — are now likely to do just that.
They say the OFT should not be allowed to examine the charges as they are not subject to consumer contract regulations.
The banks also argue that, in any case, the charges are not unfair because they represent legitimate fees.
An appeal is now likely to be heard in the autumn, by which time the OFT should have made a decision on whether the charges are fair or not.
In reaching his decision, Mr Justice Smith said he wanted the OFT to decide by then whether the charges were unfair.
He said the delays were not fair to the tens of thousands of bank customers whose claims are currently suspended by the courts.
He told a case management conference: “How long should we hold up the county court litigation?
“Are we talking months, years or weeks?
“We are facing a lot of litigants who have not had their claims struck out and who should be in a position to pursue their claims.”
The British Bankers Association said: “Once the precise terms of this permission are agreed, the banks will progress the appeal with expedition.”
But David Kuo, of personal finance website Fool.co.uk, said last night: “Banks know that time is money, which is why they are appealing — they want to hang on to your money for as long as possible.”
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.
The Sun - Dive into the red at £50 a dip
THERE’S a double sting in the tail for customers as they fork out almost £50 a pop for going overdrawn.
A one-off mistake landing you in the red can mean being charged TWICE, once through an arrangement fee and again if a cheque or direct debit is bounced.
Research from comparison site MoneyExpert shows that one in three accounts rack up a fees of up to £60.
It contrasts with the cost of defaulting on a credit card which has been capped at £12 after a ruling by the Office of Fair Trading.
Sean Gardner of MoneyExpert, said: "Some people might think that their bank charges are on the verge of being reduced or scrapped, but the court case continues and the charges remain.
"People need to pay careful attention to their spending and the arrangement they currently have with their bank.”
The analysis shows the average unpaid item fee is £31.38 and the average one-off charge is £13.60 adding up to an average overall bank charge £44.98.
The Sun - My bank charges are overdaft
WILL the first person to understand bank charges please turn on the lights.
It appears that 30million of us are fumbling around in the dark world of bank fees without a clue how much it will cost us if we go overdrawn.
This murky mess even affects those who have successfully claimed back their charges, and threatens to land them in a similar pickle once more.
Five million Brits think the overdraft is a failsafe to overspending when they are often more costly than personal loans.
The analysis shows banks charge on average 12.35 per cent for an authorised overdraft and an average 25.62 per cent for going overdrawn without permission, plus a typical one-off charge of £28.
Sean Gardner, Chief Executive of MoneyExpert.com, who conducted the research said: “Bank charges may be a hot topic but many people’s idea of how much they are being charged for their overdrafts is horribly wide of the mark.
“Average unauthorised overdraft interest rates are around 25 per cent and fees for going in the red without permission can be as much as £30.
“It’s critical that people check with their bank to ensure they are borrowing money at a competitive rate.”
Gardner added: “With recent changes in the Banking Code it's now easier than ever to switch current accounts so if you’re unhappy with your bank you should consider jumping ship.
“It's also important to realise that other forms of borrowing can be considerably cheaper than going overdrawn - for example zero per cent credit cards and personal loans.”
The Sun - ‘No interest’ in current accounts
IT’S official, we barely have any interest in current accounts – yet banks still want to charge us for having one.
Credit interest rates on our current accounts have increased by a measly 0.29 per cent since October, despite the Bank of England hiking its base rate to 0.5 per cent over the same period.
With inflation on the up, this means our money is increasingly rotting away in stagnating easy-access accounts, where the banks use it to generate huge profits for themselves.
And nearly half the bank accounts available pay less than one per cent, with a staggeringly 47 out of the 105 accounts on the market providing next to no return.
New research from MoneyExpert.com shows the average account’s credit interest rate stands at 1.84 per cent, while the Bank of England base rate is now up to 5.25% with a further rise expected next Thursday.
This is despite high-profile launches such as Alliance & Leicester’s Premier 21 account paying a whopping 10 per cent for 16-21 year-olds and other offers from firms such as Halifax and Bank of Scotland paying six per cent.
Sean Gardner of MoneyExpert.com, said: “Current accounts are the major personal finance issue in the UK, with customers rebelling over fees and the OFT launching an investigation.
“Despite all of that the average rate paid for customers who keep cash in their accounts has barely budged in the face of Bank of England pushing up interest rates.
“Around 12,700 people are switching current accounts every day. That figure is certain to keep climbing as more and more people realise there are better deals available. And there genuinely are some excellent bank accounts out there.”
MoneyExpert.com’s switching index shows around 2.29million people have ditched their bank in the past six months.
It has never been easier to switch.
Current account providers are required by law to provide details of standing orders and direct debits within three working days of a request from a new bank.
The new bank has to provide details of the new account within 10 working days after approving an application. Five years ago the process could take as long as 12 weeks.
The Sun - Banks in defeat on 'rip-offs'
A MASSIVE probe which could see the end of free banking was under way last night — as 30 angry customers won £20,000 in refunds.
The Office of Fair Trading is investigating the amounts banks charge for going into the red.
Chief executive John Fingleton stressed: “We wouldn’t want to do anything that would result in consumers paying more.”
But he said free banking was a “myth” and added: “If consumers have to pay more up-front fees in order to have hidden fees removed, it is something we should look at."
Meanwhile, the 30 customers were celebrating at Leeds County Court, West Yorks, after claiming they were victims of excessive charges.
Almost all their claims, from £150 to £10,000, were settled out of court.
It meant the banks would not have to face a test case at a High Court. That might result in them having to repay charges to millions of customers across Britain.
The Sun - Wild NatWest showdown
A FIRST-EVER court ruling will be made today over controversial high street bank charges.
Despite numerous challenges by customers unhappy with hiked up overdraft fees, banks have previously settled out of court.
But now Tom Brennan, a recently qualified barrister, who ran up to £2,500 in penalty charges whilst studying, has taken his case to the City of London County Court.
Mr Brennan is not stopping at just a full refund, he’s also looking to claim EXTRA DAMAGES due to the charges being ‘deliberate, malicious and negligent’.
Over the last few months Sun Money has led a campaign that has seen thousands of customers threaten their bank with legal action if they fail to hand back money taken from them as a result of unauthorised overdraft charges.
The Sun - Who wants to be a bank charge billionaire?
QUESTION: Who wants to be a bank charge billionaire?
Answer: Our friendly high street banks - at your expense!
Nearly 19 million people have been hit by bank charges totalling a massive £4 billion – and over half have still not claimed the money back.
Despite the furore over the unscrupulous banks gathering pace, customers have been slow to react. Only one in ten appear to know what they are entitled to claim and, despite widespread condemnation, greedy banks are still clinging to £2.12 billion of unfair charges.
But this money is not lost.
“The majority of banks are bending over backwards to refund bank charges to consumers that fight back,” says Nick White of uSwitch. “This is because they’d rather settle now than have to appear in court for a damaging test case which would set a dangerous legal precedent.”
The Sun - Free banking threat 'unjustified'
A CONSUMER watchdog said moves to end free banking would be unjustified.
Which? responded to comments by Nationwide Building Society boss Graham Beale who muted charging customers to hold current accounts.
But Which? personal finance policy adviser Pula Houghton slammed any bid to impose fees.
He told the Sun: We can see no reason why competitive banks should consider fees for current accounts.
There is nothing to suggest that additional charges would be justified.
Mr Houghton said banks are able to make money using saver’s cash without the need for further charges just for holding an account.
