OFT walk away from further court action over bank charges

22 December 2009

uk-money.jpg The Office Of Fair Trading has announced that it is calling time on its court action against the banks over their deployment of excessive charges against their customers. The OFT say it will look at other methods as it attempts to get the banks to reduce the charges to a reasonable level.

The news comes weeks after the Supreme Court ruled against the OFT and in favour of the banks following a two-year legal fandango. Although the Court ruled in favour of the banks, it tantalisingly hinted that their might be other legal avenues that the OFT could pursue.

But after weeks of exploring the possibility, the word from OFT HQ is this:

"The OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations (UTCCRs) would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation."

Which is rotten news for the thousands of customers who are still holding out for a refund, with banks raking in £2.6 billion per year from the grossly unfair charges, that have led to some customers spiralling into huge debts.

Both the OFT and the Treasury have stated that they hope the banks will voluntarily bring the charges down to a fair level, although that’s possibly about as likely asking a weasel to stop being slippery. The OFT have hinted at further legal action if the banks don’t start playing fair, while government legislation is also a future option.

TOPICS:   Consumer Advice   Banking

17 comments

  • singhster
    OFT = waste OF Time. Can't recall the last time they actually did anything. They investigate stuff then conclude it's fair, every fricking time.
  • off
    what bastards! no government organisation actually help consumers! all full of fat cats
  • begin2wonder
    Im no expert, but banks could barely even bring themselves to moderate bonuses in a year where the taxpayer bailed them out, saved the economy and their jobs - cutting back on bonuses in such a year is a move that I would consider to be common sense (if only to be seen to be doing the right thing!). People are stuck on uncompetitive mortgage deals as banks clamp down on lending and drastically reduce the number of mortgage products as they build massive reserves funded by the actions of the government made neccessary by the high risk actions of bank employees. There's no point in "hoping" the banks will play fair. They won't.
  • The S.
    Natwest have already lowered their fees to reasonable levels (£5 for going over your limit etc). Just a shame they are shite!
  • Yea
    glad they ruled against OFT, i didn't want to have to pay to have a current account.
  • Nick
    Looks to my like someone at the Office of Fair Trading got a nice fat Xmas bonus...not from the govt though...from the 7 banks to drop this court case. what nonsense.
  • graham
    when A&L charged me £70 for being overdrawn for 2 days (I was on holiday and didn't make the necessary arrangements to keep my account in the green), I just phoned up and said I'm off to first direct (for £100 sign up bonus). They refunded me if I said I would stay. I stayed another 7 days and then left anyway. Summary - like phone companies, they have retention teams who can refund charges if they want to. Play them or be played. I'm liking First Direct, if they charged me an okish fine, I'd prolly stay with them. However touchwood I don't plan to be charged again.
  • Guybrush T.
    Glad they kept the idiot tax, idiots who get charged, a fewe accidents but as graham said if you have a good history you'd be an idiot not to get your fines back just from being assertive. Keeps me in free banking. Now if only they'd do this for road tax and fines for ignorant drivers and speeders :)
  • Warwick H.
    Keep your debt under control or get an authorised overdraft and you wont get charged, thats quite simple to understand even for the tossers on here.
  • Nobby
    I'm glad too. I don't want to have to pay to have a currrent account. Let others pay for it via their overdraft fees.
  • Tim
    So, if you have no money, how exactly are you supposed to 'keep your debt under control'? I went through about a year of this - earning just enough to get by, no savings, no way to suddenly get any debt 'under control'. One month, I went a few pence (literally) over limit. Result? 10 months of getting charged £25 a month. The money went out immediately before payday, and try as I might I couldn't get to the end of the month with a £25 balance to cover the next charge. It's all well and good saying that people should control their debts, but if banks allow people to go overdrawn and then charge them for it (I asked for an account which would decline transactions rather than allow the account to go overdrawn, and was told I didn't qualify because I wasn't on benefits), then the only people who will suffer are those who can least afford to pay. THAT is why they're unfair.
  • Ian M.
    the mere fact that you asked for a account to decline transcations suggests that you didnt know what was happening with your account, keep a close eye, plan ahead, and budget, that way you will avoid the "numpty tax"
  • mrdinkle
    If you lived in any other country you would have to pay for your bank account. Why should those that can least afford it subsidise free banking for idiots like Guybrush Threepwood
  • mrdinkle
    If the charges were proportionate and fair I am sure most people would Ian
  • Spencer
    Thank goodness for the idiot tax and the useless waste of flesh that is the OFT. And for people like Tim complaining, I'd like to if I may offer a simple piece of advice: Spend only what you earn. If you only have £10, just spend £10. That way there's no unfair charges levied. It's a simple rule, which, if you follow will stop this sort of thing happening. If you're close to the breadline, then you'll just have to be frugal, spend wisely and live to your means, or get a higher paid job. and for what it's worth, I do think the charges are not illegal/unfair.... just excessive
  • Guybrush T.
    lol mrdinkle- you have a sense of humour. Okay you pay for yours if you want. I'll call it evolution. When people start taking responsibility for their actions and making sure they don't get charged then I'll start paying when I must. Just like our ancestors didn't pay the hunger tax for the dinosaurs- the idiots got yummed up whilst the others got off scott free. The rest didn't suggest that, "If we all gave up a couple of fingers then no-one would have to die". As for a couple of pence costing you months of £25, duh! Move banks to one that doesn't- call them up or go into a branch- I don't actually believe that banks would lose a customer because they went over by a few pence. Obviously exaggerated for the purposes of making a point.
  • Jeffrey A.
    @Gaybrush Sheepwould A) Move banks to one that doesn't? It's only very very very recently that such a thing has existed, and only because they thought that they would lose the trail case that they did B) Yes, there are many, many, many cases of people being trapped in these fees for the sake of a few pence. They are specifically designed to trap people into them, and they do it very successfully. c) Yes, banks wouldn't bat an eyelid over losing a few customers, because they know for everyone they lose, they'll probably gain another one who has moved their from their previous bank doing the same to them.

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