“The bank charges battle at the High Court could be derailed”, says Alan O’Sullivan on Thisismoney.co.uk. That would spell bad news for “the entire consumer campaign to win back between £20bn-30bn in unfair bank charges”. So what’s going on? In April this year “bank charges reclaiming history was made”, says Martin Lewis on Moneysavingexpert.com.
That’s because a High Court judge ruled, in effect, that seven UK banks (Abbey, Barclays, Clydesdale, HBOS, HSBC, LloydsTSB and RBS) currently take what the Office of Fair Trading (OFT) estimates is up to £2.5bn from their customers in unfair unauthorised overdraft charges every year. As a result, says The Guardian’s Jon Robins, the OFT was allowed to decide what should be classified as unfair charges under a piece of legislation with the racy title, ‘the Unfair Terms in Consumer Contracts Regulation 1999’.
This is the decision that the banks are now appealing. The ante has been upped, as the case is now being handled by the Court of Appeal with a ruling “expected in January”. But there’s a twist. While the existing ruling applies to current overdraft charges, a final decision has yet to be made by the High Court as to whether the OFT has the power to assess historic charges too. That matters, because under the UK Statute of Limitations you can make a claim for up to six years’ worth of charges in England and Wales and five in Scotland. Meanwhile, the Financial Services Authority has enraged many consumers by granting a waiver to the banks that effectively puts existing claims on hold until the Court of Appeal makes its next decision.
So far, so frustrating – but what should you do if you think you may have been hit with excessive fees? First off, says Lewis, “get in the queue”. The longer you wait, the further down the line you will be, and what’s more, the six-year limitation kicks in from the date you submit a claim. Sure, the FSA claims to have put a ‘time bar’ in place that stopped the six-year clock ticking as of July 2007, but its legal status is still not clear. So claim back as far as possible – all the way back to July 2001 if you have evidence of being overcharged – and do it soon. And, adds Robins, don’t be fooled into using a “claims management company” – you can prepare the letter to go to your bank yourself, just see Moneymadeclear.fsa.gov.uk for guidance. Then all you can do, for now, is wait.