Bank charges result expected soon
21 October 2009 / by Rebecca Sargent
The result of the bank charges test case is expected any day now, and could see the banks forced to pay back up to £20billion in ‘unfair’ overdraft fees, an investigation by the Money Mail has revealed.
The case between the UK’s leading banks and the Office of Fair Trading (OFT) has been underway since 2007, and is now at its final stages as the banks await the Supreme Court decision to their appeal.
The newly established Supreme Court replaced the House of Lords this month as the highest court in the land. The Supreme Court will decide whether the OFT can judge bank charges using fairness rules as the first test case result back in April last year ruled.
Since then, the banks have been appealing the decision and delaying the case that could see them billions of pounds worse off. Writing on the bank charges case, Tony Hazell at the Daily Mail said:
“Our information is that the Financial Services Authority has asked for details of charges going back to 2001. This implies that the banks may be forced to repay any unauthorised charges going back a full eight years.
“The implications are stunning. We estimate that the total bill could be close to £20billion if the banks are forced to repay every customer every penny they are owed,” he said, adding, “This could seriously strain the finances of some of the biggest semi-nationalised banks.”
Banks such as Lloyds and RBS, both of which have been hit hard by the banking crisis, could soon find themselves in an even more vulnerable position, depending on the Supreme Court’s decision.
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