The FSA has put back the date at which banks are obliged to deal with charge repayment claims, as the High Court case on the issue continues.
Current account customers looking to reclaim their bank charges have hit another setback.
The Financial Services Authority (FSA), the UK's City watchdog, said today that it will be extending its waiver for banks not to deal with complaints over these penalty fees for another six months. This effectively pushes back the date at which claimants can receive compensation.
Last summer, a consumer revolt over the £30 charges - commonly levied by banks for offences such as exceeding overdraft limits - led to a High Court test case on the matter being called. Thousands of small claims from banks were then frozen, with their outcomes largely dependent on the High Court's decision.
The issue at stake in the case is whether or not the Office of Fair Trading (OFT) can decide on the charges' fairness. It is thought highly likely that the OFT would rule against the banks in this instance - making the High Court judge's decision crucial in whether or not the claimants would receive compensation.
Originally, the FSA's waiver was to run out next week. However, the High Court case has yet to be completed, resulting in the extension.
Dan Waters, director of Retail Policy and Conduct Risk at the FSA, added: "Our objectives continue to be certainty over this complex issue, and a fair and consistent resolution of consumer complaints about unauthorised overdraft charges. The FSA has reviewed the prevailing circumstances and has decided to offer firms an extension to the waiver, to run for up to six months."
