The Judgment Judge allowed appeal over bank charges
Released on: May 24, 2008, 12:25 am
Press Release Author: Gracy
Industry: Financial
Press Release Summary: A judge at England gave banks permission to appeal a ruling against the customers of banks ans thus, they could have to wait for some more years to find out whether current account charges are deemed \"unfair\".
Press Release Body: LONDON - Friday, May 23, 2008 - (Shakespeare Finance Limited) - Somewhat five weeks back, the High Court ruled in favor of the Office of Fair Trading (OFT), allowing the consumer affairs watchdog to press ahead with an investigation into whether banks can legally charge customers who slip into the red without prior agreement or who write a cheque that backlashes. That hearing potentially paved the way for current account holders to reclaim billions of pounds in the form of fees.
However on Thursday , at a case management meeting to set the timetable for the next steps, Mr Justice Andrew Smith indicated that he would allow the banks to appeal at least part of his ruling, which relates to the rights of customers to sue banks and the financial institutions. Apart from this, the other aspects of his initial ruling are still being reasoned.
Peter Vicary-Smith, chief executive of consumer group, said the move was a \"real kick in the teeth for consumers as it just drags out the whole procedure\". He added, "It will be at least another year before people start to get their money back, during which time the banks will hit us with up to 3.5 billion pounds in overdraft charges\".
He also added, "The banks should do the right thing now, throw in the towel and start reimbursing the customers they have been overloading the charges all this time.\" If the banks do appeal then before the full case goes to court, the case could go to the Appeal Court and the House of Lords and which could simply take more years from two.
Britain\'s biggest banks refunded more than 400 million pounds in the first half of the year 2007. However triggering the legal dispute, several disputed whether the charges, typically between 24 pounds and 39 pounds per unauthorized overdraft, came under the OFT\'s remit.
Justice Smith backed the argument that the OST raised in the year 1999 under which the Unfair Terms in Consumer Contracts Regulations can be applied to overdraft charges imposed by the bank and, thus, the banks can be sued, easily. However, he also added that this did not necessarily mean the terms imposed by banks were unjust.
While analysts and campaigners have estimated they take more than 1 billion pounds in such fees a year, the biggest banks of Britain say that their charges are fair and clear. According to judgment, the High Court ruling follows a January hearing at which lawyers for Royal Bank of Scotland, Abbey, Barclays, Lloyds, HSBC, HBOS, Clydesdale Bank and building society Nationwide argued the 1999 regulations were not applicable to charges agreed between banks and consumers.
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