A stream of high street banks have won their battle against refunding millions of bank customers charges for unauthorised overdrafts.
The Supreme Court has today overturned earlier court rulings that allowed the Office of Fair Trading’s investigation into the fairness of unarranged overdraft charges issued by seven banks and one building society.
The court said it "unanimously" held that the charges for unauthorised overdrafts fell within a core terms exclusion.
The FSA says that in light of the Supreme Court’s judgement its waiver on banks dealing with complaints has now ended. The waiver meant firms did not have to deal with complaints about unauthorised overdraft charges in the eight-week-period required under FSA rules while the outcome of the case remained unclear.
A British Bankers’ Association spokesman says: "We recognise this issue has been of real concern to a large number of our customers and we are pleased that this decision now brings clarity for all parties. The Banks will work with the regulators to ensure that the outstanding customer complaints are brought to a swift conclusion. We will also continue to work together with the OFT in connection with its on-going market study."
Law firm CMS Cameron McKenna head of retail for City Jean Price says: "This is not only very good news for the banks but for the millions of people who never incur charges. Customers opening a bank account should realise that charges are part of the package."
However, Which? chief executive Peter Vicary-Smith says: "This is a bitter blow for the millions of people who have been patiently waiting to get their bank charges back.
"Not only does it give banks licence to charge what they like for unauthorised overdrafts, but it could have ramifications for other areas of personal finance. The banks now have no excuse for introducing other fee charges."
