Bad News For Us? Or Good?

[Cityguy23]

Just read this report on reclaiming charges:

 

 

Following a lengthy investigation into unauthorised overdraft charges, the Office of Fair Trading (OFT) has filed a court action that says the charges are unfair.

 

Seven banks – NatWest/Royal Bank of Scotland, Barclays, HSBC, Lloyds TSB, Halifax/Bank of Scotland, Abbey and Clydesdale – and Nationwide building society have agreed to face the High Court.

 

This test case will look to settle, once and for all, whether overdraft charges are a fair reflection of the cost to banks of people going overdrawn without permission.

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Customers winning in court

This follows a series of out-of-court payments by banks and building societies to people who had taken legal action to reclaim their charges.

 

In one day alone last month, 75 cases were heard at Leeds Mercantile Court, with many being won by the people claiming their fees back.

 

Hundreds of thousands of pounds have now been refunded to customers, which probably explains why the banks have decided to go to court.

 

What this means for claims

The banks have got permission from the Financial Services Authority (FSA) to put any existing unsettled claims on hold until this court case is over. This means that if you’re in the process of making a claim you will need to wait for the verdict.

 

However, if you’ve received an offer from a bank or building society you can still accept it. But if you reject it to pursue further action you’ll need to wait for the High Court decision.

 

The Financial Ombudsman Service has announced that it’s suspending any work on overdraft fee cases until the case has been heard. County courts are also expected to stop any court actions.

 

Despite this, Citizens Advice says that people who feel they have been overcharged should continue to make claims, so that they are in the system for when a decision is reached.

 

Of course, if the banks and building societies win, then it is unlikely that anyone will be able to claim their overdraft fees back.

 

If the banks lose, then experts say it could mean the end of free banking in the UK as banks look to get back some of the money they will be paying out to customers. The final bill could run into billions of pounds.

• How to claim your charges back

How long will the case take?

Estimates on how long the case will take vary. Research company Defaqto predicts that it will last for years. Many consumer groups are calling for a speedy outcome.

 

But with so much at stake, it’s not likely to be quick.

[Castlebest]

The sooner "free banking" in this country ends the better all it means is the banks hide behind this term and charge people what they like.

 

pete

[Bookworm]

http://www.consumeractiongroup.co.uk/forum/general/108091-oft-banks-dont-panic.html