Huge claims bill faced by banks

23/11/2009

Financial services firms could face eight million customer claims for previous bank charges if a Supreme Court verdict goes against them later this week, it has been suggested.

Analysis from consumer group Which? suggests that 63 per cent of the 12 million Britons who have paid penalty fees connected to their bank accounts charged since 2001 have yet to reclaim the money.

A test case for the charges, including fees levied for offences such as exceeding overdraft limits, was called in mid-2007.

The Supreme Court will decide whether or not the Office of Fair Trading (OFT) can rule on the fairness of the fees.

It is thought likely that the OFT will recommend that the charges were excessive and that compensation should be paid to customers.

Phil Jones, a Which? personal finance campaigner, said: "The banks could find themselves staring down the barrel at millions of fresh claims. This is in addition to the huge backlog that's already built up since the waiver was put in place.

"With so much money at stake, the banks may well try to drag the process out even longer, so we'd warn people not to make any plans for their refunded cash just yet."

Which? also said that, of the customer claims suspended due to the calling of the test case, 42 per cent are for £500 or more.

A similar number (41 per cent) of claimants plan to use any compensation to pay off existing debts and bills.

Tags; Debt Management and Banking, Credit Card Lifestyle, Recent Graduate Debt,

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