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October 8, 2007

Revised overdraft charges may muddy waters

by Gill Montia

Story link: Revised overdraft charges may muddy waters

In recent weeks, leading High Street banks have been revising their fees for unauthorised overdrafts, in response to a long-running dispute over penalty charges.

However, Which?, the consumer group, has found that overall the new changes benefit some customers and not others.

In some cases overdrawn account holders will actually pay more than under earlier regimes.

The Office of Fair Trading (OFT) is in the process of testing out the legal status of such charges and Phil Jones, personal finance campaigner for Which?, is suspicious that some banks are trying to “muddy the waters” prior to the case being heard in the High Court next year.

Which? is continuing to provide template letters for bank customers who have paid fees at a penal rate and Mr Jones is advising consumers to make use of them.

Currently, cases are being put on hold pending the outcome of the court hearing but banks are obliged to acknowledge new claims and keep customers informed as to their progress.

According to the OFT, the county courts and the Financial Ombudsman have received tens of thousands of complaints about charges relating to unauthorised overdrafts.

As a result, it has brought a test case under the Unfair Terms in Consumer Contract Regulations.

The OFT has indicated that the case will be dropped if banks can show that they are acting in the interests of the customers in revising their charges.

 

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Related stories to: Revised overdraft charges may muddy waters

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High Court considers historical overdraft charges  ...

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