Millions of pounds set to return to customers as overdraft charges case thrown out
A ruling by the court of appeal could see millions of pounds returned to customers after the case of unauthorised overdraft charges was thrown out.
The ruling follows a test case last year between the Office of Fair Trading (OFT) and eight High Street Banks with regard to charges for unauthorised borrowing and bounced cheques, which concluded they were covered by the Unfair Terms in Consumer Contracts Regulation of 1999.
Banks and building societies were charging over £35 for a bounced cheque, standing order or direct debit. However, it is believed that the actual cost incurred by the financial institutions could be as low as £2.
Following advice from experts, many consumers were able to reclaim previous fees, however, the case meant any future claims had to be put on hold.
The court case resulted in many banks reviewing their charging structure and as such, lowered their fees.
However, the British Bankers’ Association said its members still disputed the decision of the High Court and now the Appeal Court.
Martin Lewis of MoneySavingExpert.com, who has long been campaigning against the charges, described today as “fantastic” for consumers.
Mr Lewis added that “The smiles on the OFT’s faces in court shows it is highly likely it will find that charges are unfair. After that I would hope that within the next year everyone who has had charges unfairly taken from their bank account will get them back.”
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