Possible good news for NatWest customers

There could be some good news in the pipeline for customers of the bank, NatWest, if they have been trying to reclaim past overdraft charges that were applied to their accounts.

According to a recent report Justice Andrew Smith, who has been presiding over the High Court bank charges case brought by the Office of Fair Trading, has made a recent ruling that questions the banks terms and conditions between 2001 and July of 2003.

The judge has ruled that the terms and conditions used by the bank in this period may have included unfair penalties, and this could give customers a new opportunity to try and reclaim their past charges. An official from NatWest stated: “The court found that a single historic NatWest term prohibited customers from using a card to go overdrawn but this does not mean that that term is a penalty.”

An official from consumer campaign group, Which?, said that whilst the news was welcomed people should not get too excited just yet. He said: “Firstly, the judge this week only said Natwest’s 2001 charges may be penalties, not that they are penalties. This means the customer would need to show that the charges were actually penalties by proving that the charge did not reflect the bank’s costs.”

He also stated: “Also, as the issue of charges reflecting the cost to the bank is part of the OFT’s ongoing fairness assessment, Natwest may be able to convince the court to stay any cases brought against it until the OFT’s investigation is complete.” In his ruling, the judge said: “I still consider the relevant term in the NatWest 2001 conditions to be contractual and to impose a contractual prohibition on the customer. I therefore remain unpersuaded that the relevant term in the NatWest 2001 conditions is not capable of being penal.”

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