You will have seen in the news that the banking industry received a surprising boost this week when the Supreme Court reversed two earlier rulings by the High Court and the Court of Appeal halting an antitrust challenge from the Office of Fair Trading to fees that banks & lenders charge customers who exceed overdraft limits .
The decision to back HSBC, RBS and six other UK lenders did come as a surprise, Corinne Gladstone from the OFT said the regulator will review the ruling and make an announcement next month. Marc Thorley representing Barclays said that while the odds looked stacked against them following two rulings in the OFT’s favor We wouldn’t have pursued the point to the Supreme Court if we didn’t think it was right.
A study in 2006 found that banks earn about a third of their retail revenue from overdraft charges said to be a combined figure of over £2.5 billion per year. If the ruling had gone against the banks charges for unauthorised overdrafts would have been capped at £12. Additionally banks would have had to settle many outstanding claims from customers trying to reclaim their bank charges.
It may be the end of the road now for the OFT and for the many refund claims from bank customers that had been put on hold pending a definitive ruling.
So are bank charges for unauthorised borrowing are fair? In our opinion yes they are, sorry! Infact they always have been. The truth is that most people simply don’t read the terms and conditions booklets given to them when they open their bank accounts. Read them and all the banks charges are clearly displayed. BUT! Yes please don’t complain yet, there’s more. Bank charges for unauthorised borrowing may be fair but how much is a fair amount to be expected to pay? Credit card fees have been capped at £12 and yet many banks are charging £30 for each transaction unpaid when customers either become overdrawn witout consent or exceed an agreed overdraft limit. This does seem excesive and still may be the target of a further investigation by the OFT in the future.
What are your experiences of banks and bank charges? Let the Loans2you team know.
|
