Banks get boost for overdraft charges

09/10/2008

Banks have been given some rare good news - gaining a positive verdict from the latest stage in the ongoing penalty fees case.

A High Court judge said yesterday that bank customers hit by the charges between 2001 and 2007 should not be allowed to challenge banks through common law.

Mr Justice Andrew Smith presided over a three-day hearing on the issue in July.

His decision makes it less likely for customers who have been left out of pocket by the penalties - which are commonly levied for offences such as exceeding overdraft limits - to get their money back.

The long-running High Court case was brought by the Office of Fair Trading, in order to get greater legal clarity on whether or not it can rule that the charges are unfair.

Hundreds of thousands of people had already claimed back their charges, with many people having lost thousands of pounds and been pushed into debt, prior to the test case being called.

Ongoing bank charges claims are currently frozen, pending the judge's eventual verdict - expected early next year.

"Some banks will be breathing a sigh of relief as the judge appears to have decided that these charges were not penalties under common law," Marc Gander of the Consumer Action Group told the BBC.

Tags; Debt Management and Banking, Young Family Finances, Retirement Money Problems, Credit Card Lifestyle, Recent Graduate Debt,

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