Office of Fair Trading Win High Court Bank Charges Ruling
The High Court has today ruled that unfair bank charges can now be assessed by the Office of Fair Trading to ascertain their fairness to customers.
This announcement made earlier today could see banking customers reclaim billions of pounds in unfair charges from the last 6 years.
The High Court ruling comes at the end of a long legal battle and appeal case from eight High Street banks following the High Court’s similar ruling in favour of the OFT last summer.
The banks involved to have the right to appeal the judgement again in the House of Lords, which would in turn see the Office of Fair Trading’s investigation pushed back by a further six months to a year.
Whilst the British Bankers’ Association have confirmed their plans to put in a request to appeal they also stressed that this is not a sign that they wish to proceed with one.
A spokesperson said: ‘You have to ask if you can appeal before you decide if you are going to appeal. It’s just a legal process. The banks are keeping their options open.’
Should the banks decide not to appeal the verdict, banking customers will still not be able to reclaim their bank charges until the OFT delivers their own verdict and assessment on the fairness of such charges.
The OFT is already well underway with the investigation and so long as the banks themselves do not appeal today’s judgement then the OFT are expected to report their findings later this year.
The OFT said in a statement: ‘The Court found that these terms are not part of the core or essential bargain between a consumer and their bank, and therefore consumers do have protection under the Unfair Terms in Consumer Contract Regulations for these terms.
‘We are now analysing the implications of the judgment for our ongoing investigation.
‘The OFT has already written to the banks with its provisional view on the fairness of the terms, setting out its concerns that they may be unfair. We expect to reach a final decision on fairness later this year.’
Many in the banking industry are claiming today’s verdict could signal the end of free banking in the United Kingdom, with banks expected to lose upwards of £2.6bn a year in lost revenue as a result.
In addition banking industry experts doubt that the banks will remove free bank accounts in the immediate future mainly due the huge opportunity to cross-sell their services to these customers.
Banks could have to refund billions in bank charges levied over the past six years. RBS is already planning to proactively refund all bank charges to its customers if it eventually loses its case against the OFT.
Marc Gander, head of the bank charges campaign organisation Consumer Action Group, said the banks will think twice before fighting today’s judgement.
He said: ‘The only thing that would stop the banks appealing is their public image. To drag this on yet another year by taking it to the House of Lords after delaying the case a year already, I think would mark them out as the people’s enemy when their reputation is bad enough already.
‘I’m not sure they would have the gall to do that. They may be so reluctant to draw this on that they may throw the towel in.’
