Bank Charges ruling

Posted by Administrator 02 Dec 09

On 25th November 2009 the Financial Claims Standards Council {FCSC} expressed dismay at the Supreme Court’s ruling on bank charges which was in favour of the Banks.The ruling reversed previous Appeal Court and High Court decisions in England.

The Supreme Court ruled that the Office of Fair Trading {OFT} had no jurisdiction in deciding whether the level of bank charges were fair or not.

It is felt that the ruling has been influenced by political considerations as it has saved the Banks from paying out billions of pounds in compensation to consumers.

It is also thought that the threat to the ending of free current account banking could have influenced the decision.

For over 2 years a large number of cases have been placed on hold by the courts,Financial Services Authority,and the Financial Ombudsman Service {FOS},pending this ruling.

It is expected that the banks will now write to millions of customers rejecting previously lodged complaints.The only recourse for customers would then be to write to the FOS,although they are likely to reject complaints and there may be a lengthy delay in a customer receiving a response due to the backlog of existing appeals to be dealt with.

The only real hope is that the OFT appeal the ruling to the European Court,although this in itself would be a further lengthy process.

It is believed by the OFT that the banks have been making £2.6 billion per year from penalty charges.

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