Bank Charges Ruling Paves Way

Posted by peopleperhour.com - 02/03/2009 14:03

Banks and building societies may be forced to return money equating to billions of pounds to consumers after a court threw out their appeal over unauthorised overdraft charges.

The court of appeal ruled that fees for unauthorised overdrafts and bounced cheques are under the regulation of the Office of Fair Trading (OFT) under "unfair contract" rules. This means that the OFT can set a legal maximum on the fees. Some banks had been charging up to £39 for a standing order, bounced cheque or direct debit.

Although the banks are entitled to apply to the House of Lords for permission to appeal, they were not given leave to appeal. Many consumers have had their requests for the return of fees put on hold since the test case last year. They will still have to wait for the OFT's ruling before knowing how much they are able to reclaim.

The OFT said: "This judgment confirms the OFT's long-held interpretation of this important aspect of consumer law, and is one that consumers themselves would identify with. It is also relevant to businesses across the whole economy." This is good news for freelancers hit by charges because the client has been unable to pay on time, a common issue with the freelance market.

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