For easy convenience any new developments in the bank charges test case will be posted here.

Latest update 21 June 2010.

Update 21 June 2010

Latest update on the bank charges case of Jennifer Sharp - here 

Update 23 February 2010

New challenge on bank charges due 11 June 2010

The right to challenge bank overdraft charges took a new twist at the Glasgow Sherriff court this week after a Glasgow woman, Jennifer Sharp, won the right to revive her case about unfair and excessive charges against the Bank of Scotland. Read more

Update 22 December 2009

OFT drops test case on bank charges, read press release from the OFT

Debtwizard's blog - What now for consumers after OFT pulls out of bank charges test case?

Update 26 November 2009

We have put together a quick to read 5 point guide following the Supreme Court ruling in favour of the banks.

See Debtwizard 5 point guide to bank charges following the Supreme Court ruling.  

See Banks win Supreme Court case on bank charges.

To understand the impact of the verdict please come back to this page to view bank charges updates or sign up to our free member emails where you will receive more information.

You can view the quality of previous emails by clicking on DebtWizard updates 2009.

Update 25 November 2009

Supreme Court rules for the banks, Mike covers what the OFT can do now, what happens to the 1.1 million cases stuck in the court system and what the consumer can do.

See Banks win Supreme Court case on bank charges.

To understand the impact of the verdict please come back to this page to view bank charges updates or sign up to our free member emails where you will receive more information.

You can view the quality of previous emails by clicking on DebtWizard updates 2009. 

Update 20 November 2009

The Supreme Court is due to issue its ruling at 9.45 am on Wednesday, 25 November 2009.

Read the ramifications for the winner, loser and what happens to the consumer here at;

Date set for Supreme Court decision on bank charges

To understand the impact of the verdict, either way, please come back to this page to view bank charges updates or sign up to our free member emails where you will receive more information.

You can view the quality of previous emails by clicking on DebtWizard updates 2009. 

Update 26 October 2009

We recently posted three articles that may be of interest, just click on each one to go to the relevant page.

We understand that the 'test case' result will be released within the next 10 days. 

To understand the impact of the verdict, either way, please come back to this page to view bank charges updates or sign up to our free member emails where you will receive more information.

You can view the quality of previous emails by clicking on DebtWizard updates 2009. 

New updates

Bank accounts to be made clearer and easier to switch.

Halifax grabs that little bit extra!

The FOS needs to stop pussyfooting round the banks on 'financial hardship cases'.

Update 8 September 2009

RBS & NatWest cut bank charges as from 1 October 2009, click the link above to see the new fees and DebtWizard comment.

Update 25 July 2009

FSA extends the waiver on bank charges claims by another six months, more here

Update 26 June 2009

Banks' back in Appeal Court, latest news and comment can be found here

Update 23 April 2009

Date set for appeal at The House of Lords

You can find more information on this by clicking here 

Update 2 April 2009

Banks' now allowed to appeal OFT's right to investigate bank charges for fairness

You can find more information on this by clicking here and reading the news item dated 2 April 2009

Update 26 February 2009

Banks' lose appeal in the High Court

You can find more information on this by clicking here and reading the news item dated 26 February 2009

Update 28 January 2009

FSA extends the waiver on bank charges claims

You can find more information on this by clicking here and reading the news item dated 28 January 2009

Update 5th December 2008

RBS is planning to proactively refund all bank charges to its customers if it loses the current High Court battle with the Office of Fair Trading.

The bank is currently in the process of appealing along with seven other High Street banks a ruling by the High Court earlier this year allowing the OFT to assess bank charges for fairness.

However if it loses the overall case, the bank has outlined in an internal document leaked to the media that it plans to calculate how much each of its customers is owed and proactively return their cash to them.

RBS, which also owns NatWest, has approximately 13m customers, although not all of these will have been charged the unfair charges, which in some bank's cases were as high as £35 for falling marginally into an unauthorised overdraft.

The document says RBS is 'preparing systems and processes to pro-actively refund charges to the group's customer base'.

'All customer accounts that are due a refund will be calculated as accurately as possible… Any monies will be accurately accounted for and reconciled.'

It also adds these measures are for the 'avoidance of group reputational damage and/or loss of funds'.

A spokesman for the bank said the plans reflect its obligation under Financial Services Authority rules to be able to deal efficiently with claims in the event banks lose the High Court case. He added it did not reflect RBS' confidence in the case: 'This work stream has absolutely no bearing on how we see the outcome of the test case.'

It is likely the other banks involved in the case - Abbey, Barclays, Clydesdale, HBOS, HSBC, Lloyds TSB and Nationwide Building Society - will have drawn up similar plans.

The judge presiding over the banks' High Court appeal is expected to pronounce his verdict before the end of the year. Following this, the OFT will make a case for why it believes banks' overdraft charges are unfair. However the final High Court ruling on the inherent fairness of the charges is not expected until the end of 2009/ early 2010.

Source http://www.thisismoney.co.uk/

DebtWizard comment

It would appear that bank customers will no longer have to obtain their statements for the past 6 years and work out their claims as this will be automatically done by the bank, however, the bank may or may not work out correctly what is owed and may not add interest. I would where possible still work it out yourself, just in case, for a comparison.

Another interesting point is will they have to go back more than 6 years should the banks lose? The reason for this question is that The Unfair Terms in Consumer Contracts Regulations go back to 1995 so one could argue that claims should be back dated to this period and not just 6 years.

Update 28 October 2008

Banks charges ruling 'was wrong'

Court of Appeal has been told that a High Court judge was wrong in making a crucial ruling on bank overdraft charges.

Seven banks and the Nationwide Building Society are appealing against a ruling by Mr Justice Andrew Smith earlier this year.

He decided that the Office of Fair Trading (OFT) had the right to decide if overdraft charges were fair or not.

Thousands of bank customers are awaiting the result of the case.

Laurence Rabinowitz QC, for RBS NatWest, said some of Mr Justice Smith's reasoning was "not justified" and "schizophrenic".

The appeal is expected to last six days, spread over this week and next week.

More information can be found at http://news.bbc.co.uk/1/hi/business/7695313.stm

Update 15 October 2008

The court ruled back in April 2008 that current bank charges must comply with fairness rules, last week they also ruled that past bank charges must also comply, so this is good news for those that have claims outstanding, however the court decision as to whether they are fair or unfair has yet to be decided.

Update 9 October 2008

Early overdraft victory for banks

Banks have largely won the latest round of a High Court battle over the fairness of overdraft charges.

Judge Mr Justice Andrew Smith says most customers will not be able to use common law to challenge bank charges levied mostly between 2001 and 2007.

But NatWest customers might still have this legal avenue open to them after he failed to give their terms a clean bill of health.

This is one of a series of legal hearings about overdraft fees.

OFT investigation

The OFT wants legal confirmation that it can rule if these charges of up to £35 are fair or not.

Customers have complained they have been unfairly overcharged hundreds, and sometimes thousands, of pounds when falling into the red.

But the banks want to protect the estimated £2.6bn a year of income they gather by charging people for going overdrawn.

The OFT has been investigating bank charges since April 2006.

Frozen

The judge's ruling on Thursday followed a three-day hearing in July.

His ruling has an impact on the thousands of claims for the refund of overdraft charges which are frozen in county courts.

These county court hearings were suspended last year when the Office of Fair Trading and eight banks agreed on a test case to clarify the situation with overdraft charges.

After today's ruling, they are likely to remain frozen for the foreseeable future.

Battle continues

The judge did indicate that, even though common law largely could not be used to challenge historic overdraft fees, the OFT has the authority to examine these fees under the 1999 Unfair Terms in Consumer Contracts regulations.

There are other legal avenues for customers to explore and they may eventually get their money back.

The banks will appeal against the OFT's initial High Court victory in April. The High Court ruled that the OFT can assess whether fees are unfair.

Another High Court hearing is expected to start in the new year on the substantive issue of whether or not bank overdraft charges are unfair.

Only after these hearings, and any possible subsequent appeals, will people finally know whether they can claim back overdraft charges.

More information can be found at http://news.bbc.co.uk/1/hi/business/7659861.stm

Update 8 October 2008

Mike spoke with FSA today

Mike asked the FSA what would happen to the bank charges claim that is currently subject to appeal with the High Court in the event that should the banks' lose and a particular bank has been taken over such as Nationwide taking over the Cheshire and Derbyshire.

They informed him that this question had not been asked as yet then after consulting someone else, they then came back to Mike and said;

"In the unlikely event that the bank does not take on the other bank's liabilities then the Financial Services Compensation Scheme (FSCS) for savings will look at any potential bank charges claim. If it transpires that the bank (taken over) cannot pay by default, i.e. has no assets or funds to make the payment then the FSCS would consider paying the claim. This will only apply should the banks lose the 'test case' appeal and are required to pay the claim, verdict due at the end of the year."

Update 04 Sep 2008

Read more about the Financial Hardship here.

Update 28 July 2008

The Financial Services Agency has announced that they are to extend the current blanket ban on consumers that wish to take the bank to Court or complain to the Financial Ombudsman Service, FOS, about reclaiming bank charges. This extension is for another six months; however they have also issued new hardship rules for consumers.

The six month extension

This means that the FOS or the banks do not need to deal with any complaints or claims relating to bank charges. The extension also applies to consumers having their cases blocked by the Courts, unless they can demonstrate hardship.

What are the new hardship rules?

Some individuals may be able to get a part refund if they suffer hardship; this means you may be able to claim before the test case ends. If you want to find out more we explain about 'hardship rules' here.

Debtwizard.com

This is grossly unfair to the consumer yet again because banks are still allowed to apply the charges, even though the High Court has ruled in the favour of the Office of Fair Trading, OFT. The only way a consumer can try and get some of their money back is by demonstrating hardship.

Bank charges are a major income to the banks and one would question their stability if this revenue was denied them, in particular in the current economic climate. It is the bank's interest to draw this case out as long as they can as it is worth around £2.6 billion per year to the industry.

Why are we waiting?

The OFT is yet to decide whether it thinks bank charges are actually unfair, once they have made their decision they will then go back to the banks and try and negotiate a settlement, if this fails then the Appeal will go ahead around November this year. We are also waiting for the judgement on historical charges.

Further details can be found here.

Update 03 July 2008

This letter dated June 2008 was sent to one of its customers after they previously entered a claim for 'unfair bank charges'.

Note the statement that the banks are back in Court on the 7th to 9th July 2008, to determine whether the terms and conditions previously used by the Banks are capable of being 'penalties'.

Halifax Reply to unfair bank charges claim

view large pdf

Halifax attachment - attached to the above document

view page 1 | view page 2

Update 05 June 2008

Abbey, Barclays, Clydesdale, the HBOS group, which includes Halifax, HSBC, Lloyds TSB, Nationwide Building Society and the Royal Bank of Scotland Group, which includes NatWest are to appeal against the findings of a High Court test case on penalty charges, in an attempt to stop an Office of Fair Trading (OFT) investigation that could cost them billions of pounds.

The appeal, although not unexpected, will cause disappointment for hundreds of thousands of customers who are trying to reclaim, in some instances thousands of pounds in penalty fees after going overdrawn or missing payments.

The Financial Services Authority (FSA) has granted the banks permission to put claims on hold until the judicial process is completed. There are many more thousands of cases sitting in the county courts or with the Financial Ombudsman Service that have also been suspended, pending a final judgment.

The banks' appeal is likely to be heard this autumn, but if either side then takes the issue to the House of Lords, the OFT's jurisdiction in the matter is unlikely to be settled until next year.

However if the banks succeed in their appeal to overturn his first ruling which granted the OFT power to assess bank charges for fairness the entire case will end in the banks' favour. In the interim banks will still apply penalty charges but the consumer will not be able to pursue claims through the courts due to the blanket stay on all proceedings pending this outcome, not exactly a level playing field.

If you are thinking of registering a claim then bear in mind the 6 year moving time limit in England and Wales.

Under the 'statute of limitations' you can only claim the past 6 years of charges but the 6 years is constantly moving. So if this test case takes 12 months to resolve then individuals could lose the equivalent period in lost charges due to the six year time limit. So if you are someone that has high charges starting from 2002 and this case is finally settled in say 2009 then you can only claim back six years to 2003, unless you have registered your claim.

If you have only recently incurred charges say 2004 onwards then you can afford to wait provided the case is settled by 2010.