OFT will continue battle against high street banks
The Office of Fair Trading (OFT) has provided evidence in its case against the 8 High Street banks over unreasonable charges and said even if it loses its High Court test case against them in the New Year, it will follow up with a second legal challenge next year.
OFT recently accused the banks of using stealth and tricks to generate huge profits at customers’ expense. The 8 high street banks being taken to court are Abbey, Barclays, Clydesdale Bank, Natwest and its owner RBS, HSBC, HBOS and Nationwide Building Society.
Cavendish Elithorn, head of OFT’s banking team, said there is an important point of view here and if we lose, there are particular ways that we can continue this in the market that need to be explored. He added issues such as product transparency, business models that are not consumer friendly and a banking model lacking competition are too important to let go if the case is lost.
The OFT’s current case concerns whether the allegedly unfair bank charges are enforceable by law and are covered by the Unfair Terms in Consumer Contracts Regulations 1999. OFT said the charges are equivalent to those imposed for breach of contract and so subject to the test of fairness, as campaigners claim.
Banks are denying this and are claiming that the fees are for an agreed service but OFT stated that it does not believe any of the charges warrant a service fee.
It is estimated that around £570 million in bank charges has been refunded so far to 330,000 customers.