Appeals Court throws out bank charges appeal

Since the start of 2008 the High Court has been dealing with a battle between the Office of Fair Trading and the UK’s banking industry over the controversial issue of bank charges for unauthorised overdraft use, returned direct debits, and bounced cheques.

The OFT stated a couple of years ago that the charges that banks were imposing were unfair and unlawful, and this resulted in many consumers trying to reclaim their charges going back up to six years.

However, all claims were put on hold in the middle of 2007 after it was decided that the matter needed to go to the High Court, and the battle commenced at the start of last year.

Later in the year the presiding judge ruled in favour of the OFT giving the watchdog the right to assess the terms and conditions of banks for fairness, including the charges that they were applying to customers’ accounts, which in some cases amounted to around £40 per charge.

Following the judge’s decision the banks launched an appeal, and this was heard by judges at the Appeals Court. However, the Appeals judges have stuck with the original decision that the OFT can assess terms and conditions. However, the banks are now thought to be approaching the House of Lords to find out whether they can lodge another appeal, although they have been advised against this by the appeals judges.

The OFT was pleased with the decision, and one official said: “The court found that these terms are not part of the core or essential bargain between a consumer and their bank, and therefore consumers do have protection under the Unfair Terms in Consumer Contract Regulations (UTCCRs) for these terms.” He added: “We expect to reach a final decision on fairness later this year.”

Tags: decision, bank charges appeal, GBP, Appellate court, office of fair trading, Bank charge