Memo indicated that banks told that bank charges are probably unfair

This year’s High Court test case into bank charges saw round one go to the Office of Fair Trading, with the regulatory body being given permission to assess banks# terms and conditions, including overdraft charges, for fairness. According to the contents of a leaked memo that was sent to senior staff members at RBS and Natwest the OFT has concluded that the charges applied by the UK’s leading banks are indeed unfair.

The memo explains that the OFT has serious concerns that the overdraft charges applied to customers’ accounts are too high. According to report the OFT wrote to banks whose terms and conditions were being assessed in the middle of August. However, an official from the OFT merely said at that time “at this stage, no bank’s terms have been given a clean bill of health and all banks remain under investigation.”

The OFT went on to state: “The purpose of the letters is to start a dialogue with each bank to enable us to reach final conclusions as to whether the terms are unfair, and to identify which issues may need to be resolved in court proceedings.”

According to recent reports the memo that was sent to RBS staff members stated: ”The OFT has written to the test case banks with its preliminary views on the fairness of administration charges terms. It has told RBS that it has “serious concerns” that the terms may be unfair.”

It goes on to state: “RBS is considering its response. This is a key step towards phase 2 of the test case, which is not due to start until early 2009”.

One legal official said that the OFT needed to act more quickly in making its views publicly known, stating: “The OFT would not have spent all this time investigating the issue if it did not believe the charges were unfair. But I believe the OFT should now make public the fact it thinks the charges are indeed unfair.”