Banks win a round in High Court case on overdraft charges
by Gill Montia
News that the UK’s retail banks have scored a success in the High Court battle over the fairness or otherwise of overdraft charges does not mean that consumers should concede defeat.
This week, Judge Mr Justice Andrew Smith ruled that the historic bank terms of Barclays, Clydesdale Bank, HSBC and Halifax do not contain unfair penalties under common law.
The ruling also applied to the majority of Abbey’s terms but not to those of NatWest.
The Judge intends to further examine the terms of Bank of Scotland’s Intelligent Finance unit and those of Lloyds TSB.
The ruling prevents large numbers of bank customers challenging charges levied mostly between 2001 and 2007.
It will impact on thousands of claims for the refund of overdraft charges currently with the county courts.
The cases have been frozen since the Office of Fair Trading and eight banks agreed to a test case last year, and are likely to remain so.
The High Court case will continue in the New Year when further tests, which could challenge this week’s ruling, will be applied to establish whether the charges are unfair.
Both sides are likely to appeal if thwarted in their attempts to win the case and consumers could yet receive recompense for being charged up to £35 for inadvertently going into the red, when the true cost to a bank of such a misdemeanour is around £2.
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