Supreme Court deal blow for bank charges

25/11/2009

Millions of bank customers hoping to get bank charges refunded will be disappointed with a ruling made by the Supreme Court today.

The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts.

The Supreme Court's president Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the appropriate regulations.

However this will not close the door on the OFT's investigations and might not resolve the many cases that are currently on hold.

Debt solutions company EuroDebt, commenting on the ruling said "Despite the OFT losing, the current court case has probably signaled the end of 'free banking' as we know it.

Recent media stories have highlighted that most banks profits come from 'stealth charges', which will be increasingly scrutinised.

This may lead to 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, as we are seeing now.

EuroDebt has set up a bank switching facility to enable people in financial difficulty to establish a bank account with totally transparent monthly fees and no penalty charges at www.bankswitching.co.uk."

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