FSA Waiver Blocks Bank Charge Reclaims
The Consumer Action Group (CAG) have hit out at the Financial Services Authority (FSA) for keeping the bank charges waiver in place for Natwest customers who were penalised between 2001 and 2003. The Consumer Action Group now believes that these Natwest customers should now be able to reclaim their charges.
According to The Consumer Action Group a number of their 210,000 members are currently looking into reclaiming their charges from Natwest despite the waiver that is in place.
The Consumer Action Group is already working to draft up a number of letters for its members to use in order to take Natwest to court themselves, should Natwest fail to compensate them following once the High Court case between the OFT and the eight High Street banks concludes.
CAG believes that even in the unlikely event that the Office of Fair Trading (OFT) loses their case, these Natwest customers should still be entitled to a refund of their charges.
In this case the Judge ruled last month that NatWest used terms and conditions that may have included unfair fines for falling into unauthorised overdrafts. However he stopped short of labeling these as penalties, with the matter of whether these high charges are used as penalties being central to the reclaiming case.
The judge has previously said NatWest’s charges between 2001-2003 could be assessed as penalties under common law.
In order to reclaim these charges however the consumer would have to prove that the bank charges of up to £30 were excessive, with campaigners estimating the actual cost incurred to a bank for an unauthorised overdraft is only £2.
However, consumers who are seeking to reclaim NatWest charges are being prevented from doing so by the waiver that allows courts and banks to postpone cases.
The Financial Services Authority today declined to comment on the specifics of the Natwest case, but it is believed that they are waiting to see whether Natwest plan to appeal the latest ruling before making a decision as to how to treat the customers fined between 2001 and 2003.
Marc Gander from Consumer Action Group said: ‘This really is disgraceful. If the FSA was going to act decently, they would have said the waiver for these NatWest customers is now lifted. This shows how unfair all of this is and how unjustly the FSA is acting.’
In the unlikely case the OFT losses the case, NatWest will probably settle these cases out of court as quickly as possible, he said.
In a statement, NatWest disputed that the terms in question were penalties. It said: ‘The Court did not decide that any NatWest historic terms were penalties. It found that a single historic NatWest term prohibited customers from using a card to go overdrawn but this does not mean that that term is a penalty. The OFT and NatWest are together considering how best to address any remaining issues in relation to the NatWest historic term. In the meantime, the test case continues and the waiver and the County Court stay remain in place.’
First introduced in July 2007, the bank waiver froze all bank charge cases in the county courts until the conclusion of the High Court case had been reached. The only exemption to this ruling being cases where an individual is suffering from undue hardship as a result of their fines.
The Financial Services Authority have since extended the waiver for another six months whilst the High Court battle continues in its complexities.
Whilst customers can only reclaim bank charges going back six years, this date has since been frozen from when the waiver was first introduced, so bank customers can therefore claim charges back to July 2001.
This date will remain static for a short time after the High Court case has concluded, but customers are advised to get their bank charge reclaim forms in as quickly as possible to ensure they can claim back as far as possible.
