Britain’s largest banks and the Office of Fair Trading remain locked in a case management hearing in court over the thorny issue of current account default charges, but the judge has already indicated that the banks will be given the green light to appeal the ruling against them. The appeal — on at least part of Mr Justice Andrew Smith’s ruling, which relates to “fairness” and the rights of customers to sue banks — is a hammer-blow to scores of consumers whose claims for compensation have been put on hold while the matter trundles through the courts.
The issue could now go to the Appeal Court and the House of Lords before the full case goes to court — and that could take two years or more. In the meantime, the Financial Services Authority has put on hold customer complaints and court cases relating to the charges, putting the brakes on any compensation payments. And, as the legal process rumbles on, the banks continue to rake in vast sums of money by hitting consumers who go over their overdraft limit or write a cheque that bounces with exorbitant charges. Analysts have estimated that that banks make up to 3.5 billion pounds in overdraft charges every year: by delaying the case, they could amass some 7 billion pounds.
Time, it seems, is money. But despite the ban on compensation payments, those who believe they have been hit with “unfair” bank charges should not delay. Customers can’t stop the banks from appealing – but they can stop the clock from counting down the time allowed to submit their claims.
Currently, bank customers can reclaim “unfair” charges plus interest from the past six years — as far back you can go in the courts. Submitting your claim as soon as possible might not mean you’ll get any subsequent rebate sooner, but it will stop the clock from ticking on how far back the claim can stretch.
“Anyone who plans to appeal should write to their bank to ask for the charges to be refunded,” advises David Kuo, head of personal finance at Fool.co.uk. “Follow up with a letter threatening court proceedings. Many courts will probably stay the majority of claims, but at least the six-year limitation on your claim will be halted too.
“Banks know that time is money, which is why they are appealing — they want to hang on to your money for as long as possible. But bank customers can get their own back. Submit your claims without delay so you can get your refund in full when banks run out of time — and options.”
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2 comments so far
In all this fuss over bank over-charging, why does no one mention that it is the prudent that fund the prudent. By what right is an overdraft automatic? Can you borrow money in your Post Office savings account , from National Savings or a supermarket? By comparison with typical continental European banking arrangements, the UK customer does very well. Yes, there are times when the clearance time for a cheque can cause trouble but most banks are reasonable towards occasional or accidental overdrafts caused by this.
Why should banking be a free service? and of course it isn’t. It is mainly paid for by those who are depositors and receive paltry savings rates. Those borrowing from banks should pay for the service they receive.
- Posted by OliverApparently it is fairly standard practice in other countries to charge a regular fee for bank accounts; not so in Britain, and consumers are highly resistant so any such services (anyone ever considered an RBS Royalties account or the like?) And why would you when there’s free ones on offer. This does mean however that British banks top up their income by penalising those who are, by definition, the least able to pay, who have gone overdrawn. No-one is saying banking should be free (and it isn’t - just try getting a loan at 3% interest), just that any fees charged be proportionate to the costs incurred by the banks, as the law states they must. I was charged a fee of £20 by my bank to make a direct debit payment of £3 to Save the Children. Does anyone seriously thinks that’s fair and reasonable?
- Posted by Steve