Story from Evening Herald in Plymouth:
http://www.thisisplymouth.co.uk/disp...folderPk=78031
ABBEY CHARGES CASE IS SETTLED
12:00 - 04 February 2006 A Plymouth law student who sued banking giant Abbey to claw back what he claimed were unfair penalty charges has secured more than £7,500 in an out-of-court settlement.
Stephen Hone, 29, took the high street bank to court to claim back £840 in charges for bounced direct debit payments.
But the Evening Herald can reveal that Mr Hone, from St Budeaux, has accepted an offer of £5,000 from Abbey - six times his original claim - plus an additional £2,600 for court costs in an out-of-court settlement.
A bank spokesman said the settlement had been made for commercial and business reasons.
Now Mr Hone has called on the Office of Fair Trading (OFT) to take out an injunction to stop banks making billions of pounds from charges.
Mr Hone said that he would have risked bankruptcy if he had turned down Abbey's offer. He said: "I would have loved to have got the declaration that their charges were unfair.
"Unfortunately, if they had gone to court and then the appeal court and won, I would not have been able to afford their legal bill.
"I would have been declared bankrupt and that would have finished my career as a solicitor."
Mr Hone, a father of three, is currently in the second year of a three-year law degree at the University of Plymouth.
After reading up on contract law, he entered a claim form against Abbey at Plymouth County Court last May.
He argued that, under the Unfair Terms in Consumer Contracts Regulations 1999, a consumer should not pay a disproportionately high sum in compensation for failing to meet his or her obligation.
Mr Hone said that Abbey twice offered him an out-of-court cash settlement as the case progressed, but he refused.
Mr Hone added that he also refused a 'part 36 offer' which Abbey made in court. Refusing this offer, which was slightly greater than his original claim, meant that he would have had to pay Abbey's court costs if he was awarded a lower amount at a later hearing.
Mr Hone said: "Abbey told me that their court costs would be about £20,000."
Abbey closed Mr Hone's account on December 9.
An improved out-of-court offer was formally agreed on January 31.
Mr Hone now wants the OFT, which warned eight credit card companies that their charges were excessive last July, to look at current account penalties. Mr Hone said: "I'm chuffed. I'm just hoping now that the OFT will act rather than sit there and do nothing."
A spokeswoman for Abbey said that the settlement with Mr Hone had been made 'for commercial and business reasons'.
She said: "It takes into account the fact that the legal costs of continuing with the case would far exceed the amount at stake. In particular, as Mr Hone is no longer an Abbey customer, it made sense to bring the matter to an end."
The spokeswoman added: "Our position in relation to bank charges, as stated in the terms and conditions of our accounts, is that it is the customer's responsibility to ensure that there are sufficient funds in the account to cover any direct debits, standing orders, card purchases or cheques that they may write.
"Abbey is up front and transparent about all its banking charges as set out in its Tariff of Charges. Abbey's bank account is good value and our charges compare fairly with others. We review our fees and charges regularly against our competitors.
"For most people, banking is free - they do not incur penalty charges. We do not charge fees to people who contact us and ask to borrow money - bank charges are only imposed on those who don't contact us and go beyond their agreed limits."
Well Have Abbey helped me make legal History 
