High Court finds against the Banks

In the High Court, Mr Justice Andrew Smith has found against he Banks and in favour of the Office of Fair Trading (OFT) that the Unfair Terms in Consumer Contracts Regulation 1999 can be applied by the OFT in their determination as to whether the Banks charges for unauthorised overdrafts, bounced cheques etc are fair and if not what a fair charge might be.

This decision of course does not say that the bank charges are unfair or illegal – that was never the question before the court. However, it is a significant step in ending what many people perceive to be unfair charges.

Any claims for refunds made will remain on hold until the Banks decide whether to appeal the decision, the have until the end of May to do so. It has been estimated by the BBC that banks refunded about £784m to nearly 378,000 customers last year.

It is expected though that there will be further hearings in the high court to decide whether the charges are unfair and if so what a fair charge would be in these situations.

However, it is not all good news. It is expected that if the banks loose completely it will spell the end of what has become to be known as “free banking” and that the banks will try and recoup the £3.5bn they make each year from these charges through the introduction of monthly or annual charges for simply running a current account.