“The April judgment decided that the bank’s current terms and conditions that relate to these fees are not ‘penalty charges’, that these terms are in “plain and intelligible” language, or substantially so, and that unarranged overdrafts are part of the essential services banks provide to their personal account holders.” the statement said.

While the OFT confirmed they were not seeking to appeal on this issue, the BBA stated that banks were going to appeal in order to achieve a final decision about the unresolved ‘fairness’ issue:

“The court also considered the terms could be assessed for fairness under the UTCCR regulations but that did not mean that the charges were unfair. The banks are to appeal this part of the judgment as they consider these types of fees are fair and the regulations do not apply to them. However, it is also in the public interest to have full clarity and it is only the Court which can make the final decision on whether the charges are fair.”

As there is no legal precedence on whether and how the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR) apply to circumstances such as unarranged overdraft fees, resolving the issue of ‘fairness’ in these bank charges is of considerable importance and will have significant implications.

Although the High Court has authorised the OFT to assess unarranged overdraft fees for fairness, the judge explicitly pointed out that this did not mean they actually were unfair. Therefore a separate hearing on this issue will be held later on this year.

Until a final decision is made, both customer complaints and cases relating to unfair bank charges will remain on hold, and the BBA asserted: “We will work closely with the courts and with the OFT to bring this to a conclusion as quickly as possible.”

©Fair Investment Company Ltd