Find out what the Supreme Court's ruling on unfair bank charges means for you and your finances whether you use your overdraft or not.
The Ruling
Did you hear the news? The Supreme Court sided with the banks in the seemingly never-ending 'people against unfair bank charges' court case. For many this came as a shock as it was largely anticipated that the court would rule in favour of the people (or, if we're going into technicalities, the OFT).
However, while this result has largely been bandied about in the media as a very negative outcome for the public at large, this isn't necessarily the case.
Yes, it's true that the OFT are now unable to officially assess the fairness of bank charges - a significant blow to those who currently have claims pending. However, the Supreme Court did imply that the OFT may be more successful in their plight if they changed focus and argued their case on different area of the law so all is not lost quite yet.
Moreover, the OFT have already stated that despite the verdict they will be working with banks to help ensure that customers are charged fairly. Given that this issue is now very much in the spotlight, it's also very possible that banks will look to reduce their charges for no other reason than so as to appear competitive! Well, we can hope!
The Current Situation
We'll keep you posted as soon as there are any developments but for the time being things are very much at a standstill.
- If you'd previously received compensation from your bank after submitting a claim you won't be asked to pay this back.
- If you have a claim pending it's quite likely that the answer will be a flat 'no'. That said, the banks have returned to measuring appeals on the basis of the FSA's standard complain handling rules so there is a small chance you may be successful.
- If you were planning to lodge a claim in the near future it may be best to hold off for the time being and wait for more news. The exception to this is if you're in financial difficulty.
The Future of Banking
Of course, while this ruling does represent a blow for those who were hoping to get a refund, for those who stay in the black this could actually be seen as good news.
Ever since the case began, talk of an end to free banking and extortionate charges for withdrawing cash have been thrown around. Hopefully these ideas will never see the light of day now the banks don't need to find the money needed to refund 'unfair' bank charges.
Going forward, the best approach is still to play by the rules so that your bank doesn't ever see the need to charge you. That said, if you're unhappy with your bank's charging policy the best thing you can do is to 'vote with your feet' and move your money to an account that works with the way you spend.
