Yorkshire Bank faces tough decision

The Yorkshire Bank is facing a tough decision over its overdraft charges following an order made by a judge in Hull.

Over 40 cases were due to be heard last month by the judge, and these related to unfair charges that were applied to customers’ accounts as a result of exceeding their overdraft limit and for bounced cheques or returned direct debits. According to campaigners the cost of administration for this type of oversight is between £2 and £5 for the bank, but often customers were being charged up to £40 per fee.

Of the 44 cases that were due to be heard the majority were settled by the bank before being heard in court. However, seven of the cases were heard at Hull County Court with judge Iain Besford residing.

When hearing the cases the judge made a decision that means the bank will either have to settle all of the pending claims in full or will have to attend an open court and explain its charging structure in detail, explaining why customers are charged so much if it is not for profit.

The disclosure order that the judge agreed to means that the bank now has until the end of September to make its decision with regards to whether to settle the claims or whether to justify its charges in court.

Banks do not generally turn up to these court hearings, as most tend to settle the claims just prior to the case being heard in court. Lloyds TSB, however, has won two cases filed against it for repayment of bank charges.

Originally the judge had considered striking out the bank charge cases altogether following a decision by a Birmingham judge to rule in favour of Lloyds TSB earlier this year. However, having heard the cases he has now informed the bank that it must pay up or explain and justify its charges.

Tom Smith
13th July 2007

Bank charge court claims need to be watertight

Experts have warned that consumers that are trying to reclaim bank charges from their banks through the courts need to make sure that the case they are putting forward is solid and watertight in order to increase their chances of successfully reclaiming back the cash from the bank.

Apparently a number of claimants are failing to provide the right documentation or are failing to put forward their case properly, and this can increase the chances of the judge ruling in the bank’s favour.

Judges are becoming impatient with these cases, as there are many pending and blocking up the court system, and banks fail to turn up to defend themselves, which means that the claimant wins the case by default.

Experts claim that judges are now looking to get rid of what they describe as frivolous claims, and this could affect those that do not put forward a strong enough case or provide the necessary paperwork and documentation to support their claim.

Lloyds TSB has already won two cases, where the judges ruled in the bank’s favour rather than that of the claimant. A judge in Hull has also stated that he may strike out twenty claims against banks. Experts think that all of these lost of struck out cases could be the result of sloppily put together cases and inappropriate or inadequate documentation from the claimant.

Thousands of consumers have been claiming back charges from their banks going back up to six years, and these charges were applied for exceeding the overdraft limit on the account, as well as for returned direct debits and cheques. However, where banks have reduced to repay the full amount many have decided to file a small claim against the bank through the courts.

Tom Smith
30th June 2007