Three banks take centre stage in charges test case
by Gill Montia
Story link: Three banks take centre stage in charges test case
The Office of Fair Trading (OFT) hopes to speed up the High Court test case on unauthorised overdraft charges by focusing on the terms of three of the banks involved in the case.
The watchdog says it will concentrate initially on the terms behind unauthorised overdraft charges made by Lloyds TSB, HSBC and Clydesdale Bank.
According to the OFT, these banks can provide a representative selection of the unarranged overdraft charging terms of all the banks involved in the test case.
As such, the detailed OFT investigation will be relevant to the assessment of terms offered by the other parties involved in the case: Abbey, Barclays, HBOS, Royal Bank of Scotland and Nationwide Building Society.
However, the OFT cautions that “it should not be assumed that it is more or less likely to find the terms of Lloyds TSB, HSBC or Clydesdale unfair”, adding that none of the terms offered by other banks involved in the case have been given a “clean bill of health”.
The OFT says it expects to reach a final conclusion on fairness later this year although its efforts to fast-track the case may yet be thwarted.
Last year, Mr Justice Andrew Smith ruled that the OFT had the right to decide whether or not the charges were fair under the Unfair Terms in Consumer Contracts Regulations 1999.
The banks challenged the ruling in the Appeal Court in March, but were unsuccessful.
However, the House of Lords granted the right to appeal last week, giving the banks until 15th April to lodge their petition.
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