If you feel you've been unfairly charged by your bank we bring you the latest on your options.
On 6th December 2007 The Bank of England’s Monetary Policy Committee voted to reduce the Bank Rate by 0.25 percent, to 5.5 percent: this comes during many months of falling house prices as sellers cut property prices. The penalty fees that customers pay on mortgages, current accounts, credit cards and overdrafts however have continued to rise, with banks continually introducing new charges.
Over the last couple of years, more and more customers have complained to County Courts and the Financial Ombudsman Service about the fairness of mounting fees - but at the moment consumers are prevented from using the law to reclaim such charges. Currently, customers can claim back up to 6 years worth of charges under UK and Welsh law, under Scottish it is 5.
The British Bankers’ Association (BBA) has said in a statement, that although banks may think that these added fees are justified, many have now joined with The Office of Fair Trading to approach the courts for a ruling for much needed clarity on the issue. The outcome of this ‘test case’ should clarify the legal position regarding bank overdraft fees. The test case is expected to begin in early 2008.
In November 2007, The Financial Services Authority reviewed its waiver, which had been implemented four months previously. The waiver says that banks do not have to deal with the thousands of consumer complaints regarding overdraft fees until the test case has reached its conclusion. Banks and building societies must still deal with complaints in relation to all other additional bank charges. The bank also has a duty to keep customers up to date on the progress of the test case as it unfolds.
The FSA has said that customers incurring overdraft charges will be expected to continue paying these fees throughout the unknown duration of the test case; refunds may be given if the OFT wins the case. The waiver may be revoked if the test case is prolonged with no headway being made.
