"When the ducks are quacking - feed them"
Without a dobut you will now hear the following statement on Sept 30th.
PRESS RELEASE (OFT & FSA)
"Over the last two months it has become apparent that the issues involved in determining the level and fairness of bank charges are broad and wide ranging. Questions have also arisen as to where responsibility lies with regards to enforcement. The FSA and the OFT recognise that these issues may take some time to bring to a conclusion. We do not think that it is in the best interests of customers for this situation to continue in its current form. Therefore the FSA is today lifting the wavier that allows banks to stop dealing with bank charge complaints. The OFT & the FSA have agreed that customers who wish to pursue a claim immediately may do so. While the High Court Test case will continue, it is likely to be delayed for some time."
Customers who wish to pursue their claim may do so under the following conditions:
1. The FSA recommends that banks are able to refund the difference between £12 and the charge levied (as per original OFT ruleing).
2. The payments will be in 'full and final settlement' of any high court case.
3. The banks will be given extra time to process these payments.
4. There will be a cut off point (likely 2 years) for these claims to be settled.
5. Cases in court will be be given offers to settle as above.
6. The FOS will process complaints in line with Directions given above.
EDIT: Claims will still not be automatic. I reckon a list of charges will still have to be submitted to the bank in order to get a claim. In other words, some kind of effort will still have to be made by claimants. The banks will not simply credit accounts without a claim being submitted.
In the meantime the FSA and OFT will set up a working group to decide who has the responsibility for regulating charges in the UK banking market. This will last some time & the FSA eventually win.
The Economics behind the decision:
There is a saying "when the ducks are quacking - feed them". This is what they will now try and do. You see, Charges commission complaints (as they are known) have all the hallmarks of a bank run. Except in this case no one has any money. However the consequences are the same. If the issue is left to fester then confidence is in danger of slipping. And we can't have that. No siree bob. Banks have paid out 2.6 billion so far in charges and there is another 4-6 billion or so to go. Not much at all when divided by 8-10 banks or so and spread over 2 years. The best part is it will cost them nothing. At the end of the year they will apply to HM for a tax rebate. They will then be sent a cheque. It is the British way. Bernake has helicopters. We have the FSA and HM Customs and Revenue. Much quieter really.
The problem is really one of competition and the FSA and OFT know this. The FSA will (while all this is happening) slowly start to regulate bank charges to death. They cant really ban them (without great difficulty), and they cant rely on any banks to break ranks to stop charging them. Instead they will require rules that become steadily more onerous as time passes until the cost and effort of complying with FSA directives outweighs the benefits. I reckon this will take 2 years. Just enough time to settle 99.98% of all complaints. Then - with the regulating of bank charges complete, any talk of OFT court action will fall away.
As an added side benefit it will also give the boys from the FSA some nice consulting jobs to go to when the new FSA rules regarding bank penalty charges are brought in.
You see. That's just how its done. Its in the FSA playbook. Its been done before (endowments). And dont forget the regulation that followed. (have you seen a mortgage or life insurance application recently?)
I'm not saying the above senario is the right one for claimants, but will it happen?
Not long to wait and see.
OFT may compromise on bank fees 
