The Times - Bank scores first victory on charges

Lloyds TSB wins county court case against customer trying to reclaim almost £2,000 in unauthorised overdraft fees

The banking industry scored its first victory in the continuing battle over overdraft charges today when Lloyds TSB won a county court case against a customer trying to reclaim almost £2,000 in unauthorised overdraft fees.

A district judge at Birmingham County Court dismissed the claim from Kevin Berwick for £1,982.37 in fees and interest on the grounds that charges levied by the bank were a legitimate part of the service.

In a written verdict, Judge Cook said: “There is no evidence before me from which I could conclude that, taking into account the other elements of the service provided by the banks without charge, these particular charges were unreasonable.”

He added that having established that the fees were not charges for breach of contract but part of the price of the service provided by the bank, he was unable to rule that they were unfair.

The verdict is a blow to thousands of people still hoping to reclaim “unfair” charges from their bank. But campaigners noted that the ruling was made by a district judge and as such was not binding in the way that a High Court judgment would be.

Although the banking industry has always insisted that overdraft charges are legal, most banks have been paying settlements to claimants before the cases come to court. A spokesman for Lloyds TSB, which did not appear in court but offered a written defence, admitted that the claimant in this case was offered a partial settlement but it had been refused.

The spokesman said: “We are pleased with Judge Cook’s ruling as it appears to acknowledge our position in respect of current account service charges. The court has agreed with us that these are charges for a service and not default or penalty fees as has been argued by others.

“We will, of course, take time to review the full court ruling.”

Read Full Article...