The test case was launched by the Office of Fair Trading (OFT) in July 2007 and will determine whether unauthorised overdraft charges come under the Unfair Terms in Consumer Contracts Regulation (UTCCR)1999.

The battle over bank charges has been ongoing since July 2006, and since then hundreds of thousands of customers have filed claims amounting to millions. Some bank customers have found their claims successful, whereas others have been less triumphant.

In July 2007, a freeze was put on reclaiming bank charges pending the verdict of the High Court test case. This is because the Financial Services Authority (FSA) thought it unfair that some bank customers were being refunded and others were not, and hoped that the test case would help eradicate such inconsistencies.

If the OFT does win the case, it is expected that further High Court hearings will be required to decide the exact level of cost that would be acceptable for banks to charge for exceeding an authorized overdraft limit. If the OFT is unsuccessful, it is predicted that it will appeal the decision, potentially dragging the case out into next year.

©Fair Investment Company Ltd