High Court Considers Historical Overdraft Charges
The High Court case brought to establish the legality of unauthorised overdraft charges is considering whether charges made several years ago can be included in any judgement
The case is being brought by the Office of Fair Trading (OFT) against eight High Street banks.
So far, the OFT has been given leave to assess whether the banks’ charges are fair under consumer contract regulations.
However, the ruling only applies to current agreements between banks and their account holders.
The Court is now addressing the question of whether the OFT can examine historical contracts for fairness, raising the possibility that contracts dating back six years could be scrutinised by the watchdog.
The OFT is expected to produce a preliminary report on the fairness or otherwise of overdraft fees by the end of this month.
Meanwhile, the banks involved in the case are appealing against the Court’s decision to allow the OFT examination under consumer law.
UK banks are estimated to be making £2.5 billion a year from unauthorised overdraft fees but the banks argue that the free services that benefit many customers who keep within their overdraft limits will be threatened if the charges cease.