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Banks have been given permission by the House of Lords to appeal a ruling that ‘unlawful’ overdraft charges can be subject to fairness rules.
The decision, confirmed today by the House of Lords’ judicial office, is a major blow to consumers as it’s likely the resumption of the bank charges reclaiming process will be held up again.
Last month, as part of the historic bank charges test case, the Court of Appeal agreed with the High Court's decision that charges can be subject to 'unfair contractual terms' laws.
This was a crucial victory for reclaimers as without it, the banks can ignore the Office of Fair Trading’s (OFT) view whether charges of up to £39 a time for a bounced payment or for exceeding your overdraft limit are fair. The OFT has provisionally suggested they are unfair but has not concluded its investigation.
The House of Lords’ judicial office says in a statement: “Office of Fair Trading (Respondents) v Abbey National plc and others (Petitioners). That leave to appeal be given; and that the petition of appeal be lodged by 15 April.”
The appeal could be heard by the end of July, but because the Lords closes for summer, if there are any delays, it may not be heard until October.
The City regulator, the Financial Services Authority, has allowed banks, the Financial Ombudsman and the courts to suspend all bank charge claims pending the outcome of this case.
Martin Lewis, creator of MoneySavingExpert.com, says: “The reclaiming charge is a super-tanker and it’s only heading in one direction. The banks can’t stop it, but they’re doing all they can to slow the process.
“It’s time the banks paid out. Hundreds of thousands of people are waiting to get money back that’s been unlawfully taken from their accounts, without their permission. There’s nothing the economy needs more right now than cash put into people’s pockets."
While this means it’s likely the FSA will extend its hold on reclaiming, that shouldn’t stop people putting in their claims as soon as possible, to put them ahead in the queue. In addition, the hold does not apply to anyone in financial hardship.
Banks have been given permission by the House of Lords to appeal a ruling that ‘unlawful’ overdraft charges can be subject to fairness rules.
The decision, confirmed today by the House of Lords’ judicial office, is a major blow to consumers as it’s likely the resumption of the bank charges reclaiming process will be held up again.
Last month, as part of the historic bank charges test case, the Court of Appeal agreed with the High Court's decision that charges can be subject to 'unfair contractual terms' laws.
This was a crucial victory for reclaimers as without it, the banks can ignore the Office of Fair Trading’s (OFT) view whether charges of up to £39 a time for a bounced payment or for exceeding your overdraft limit are fair. The OFT has provisionally suggested they are unfair but has not concluded its investigation.
The House of Lords’ judicial office says in a statement: “Office of Fair Trading (Respondents) v Abbey National plc and others (Petitioners). That leave to appeal be given; and that the petition of appeal be lodged by 15 April.”
The appeal could be heard by the end of July, but because the Lords closes for summer, if there are any delays, it may not be heard until October.
The City regulator, the Financial Services Authority, has allowed banks, the Financial Ombudsman and the courts to suspend all bank charge claims pending the outcome of this case.
Martin Lewis, creator of MoneySavingExpert.com, says: “The reclaiming charge is a super-tanker and it’s only heading in one direction. The banks can’t stop it, but they’re doing all they can to slow the process.
“It’s time the banks paid out. Hundreds of thousands of people are waiting to get money back that’s been unlawfully taken from their accounts, without their permission. There’s nothing the economy needs more right now than cash put into people’s pockets."
While this means it’s likely the FSA will extend its hold on reclaiming, that shouldn’t stop people putting in their claims as soon as possible, to put them ahead in the queue. In addition, the hold does not apply to anyone in financial hardship.
Sir Anthony Clarke suggested further appeals were a waste of time
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