Is this the end of free banking as we know it?
25th November 2009
The Supreme Court has today (25th November 2009) found in favour of the banks on overdraft charges.
The Supreme Court has today (25th November 2009) found in favour of the banks on overdraft charges, overturning earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of these charges. Leading debt solutions provider, EuroDebt, believes this decision, which has shocked many consumer organisations, signals the end of free banking as we know it.
"Despite the OFT losing, the current court case has probably signaled the end of ‘free banking’ as we know it", explained Kevin Still, Director, EuroDebt. “Recent media stories have highlighted that most banks profits come from ‘stealth charges’, which will be increasingly scrutinised. And I think there will now, inevitably, be bank led changes in practices with the introduction of more ‘transparency’.
"This will probably mean the re-introduction of monthly management fees, higher interest on overdrafts and less discretion by staff who deal face-to-face with clients to remove or reduce charges. It is difficult to see how customer service can improve with huge lay-offs by the leading banks and more of a ‘jobs worth’ mentality for the survivors."
Tackling this issue, EuroDebt set up, earlier this year, a bank switching facility to enable people in financial difficulty to establish a bank account with totally transparent monthly fees and no penalty charges. This can be accessed at www.bankswitching.co.uk
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Lloyds to ask local courts to dismiss overdraft cases
30th November 2009
For many people the decision by the Supreme Court not to make banks pay back overdraft charges was very disappointing, especially at a time when it's a real struggle to manage finances. But now there's a further blow as Lloyds Bank announces that it will be asking local courts to dismiss thousands of overdraft cases lodged against them for the return of overdraft fees.
The OFT is currently deciding whether or not to attack the fairness of overdraft charges under other aspects of the consumer contract rules, or whether it should trigger a full scale competition enquiry into the bank's charges.
After last week's ruling a spokeswoman for the judiciary said it was now up to either banks, or the claimants, to apply to the local courts to lift the stays on their cases, if they wished.
"Judges will consider such applications individually and make whatever orders they consider are appropriate in the case before them," the judicial communications office said.