Banks Win Overdraft Ruling
Supreme Court Ruling Sees Banks Win Overdraft Charges Case
The Supreme Court confirmed today that the Bank’s unarranged overdraft charges are an important part of current account services and that the amount of those charges is not assessable for fairness.
OFT Disappointed by Supreme Court Judgment
The judgement stated that the court did not have the task of deciding whether or not the system of charging current account customers was fair, but whether the OFT could challenge the charges as being excessive in relation to the services supplied in exchange.
The Office of Fair Trading said it was disappointed by today’s Supreme Court judgment, as the decision follows more than two years of test case litigation.
Research conducted by the OFT found that banks collected a third of their retail revenues from unarranged overdraft charges and that average paid charges for unarranged overdrafts came to £205, with 1.4 million people paying over £500.
“Clarification of the Law”
The British Bankers Association, representing the banks, said it considered the decision as a “clarification of the law” rather than a “victory”.
Despite the Court rule, the Office of Fair Trading is expected to continue to push for fairness to apply to charges, as the ruling stated they could still assess the fairness of charges but under different grounds.
Payplan
If you are struggling to repay mounting overdraft charges then contact Payplan for debt advice online or telephone 0800 280 2816.
Written by on November 25th, 2009
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