Battle over bank charges is not over says debt firm

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) December 10, 2009 -- Consumers who have been stung by disproportionate bank charges recently had their hopes of reclaiming these charges dashed as an earlier ruling in favour of consumers was overturned by the Supreme Court.

Although the court has judged that the Office of Fair Trading no longer has the power to decide whether fees charged are unfair or not, this is by no means the end of the road for consumers, according to Michelle Gilbourne, managing director of Nottingham based debt management firm, Bournes Debt Solutions.

“The court ruling makes no reference to the bank charges being fair, or that individual bank charge cases cannot be brought to court under Regulations 5 & 8 of the Unfair Terms in Consumer Contracts Regulations of 1999” Michelle remarked.
Charges incurred could still be challenged under “other criteria” mentioned by Lord Phillips, president of the Supreme Court.

Aside from the issue of unfair charges, there is also the issue of an unfair relationship between the banks and their customers.

Lord Philips made the observation that bank customers agree to pay overdraft charges as part of the price of having a current account, but this does not take into account the fact that customers do not have a right to negotiate the agreements.

This means that an imbalance in the relationship between the borrower and lender exists, to the detriment of the consumer and that there is still a case for recovering bank charges.

“We are not saying that everyone will be able to claim back bank charges. Each claim needs to be assessed on its own merits and you are more likely to succeed if you can show that the charges have caused financial hardship, that you unintentionally went over your overdraft limit and were charged a disproportionate fee, or that you have become trapped in a cycle of fees which has caused you to go into debt” said Michelle.

“We believe in readdressing the balance between lenders and borrowers and have had great success in writing off debts through listening to our clients and building claims based on individual circumstances. We are confident in our ability to do the same with unfair bank charges” she added.

While thousands of customers had their refund claims over unfair bank charges frozen pending the outcome of this ruling, it is “unlikely to be the end of the story” according to Kevin Mountford, head of banking at the price comparison site Moneysupermarket.

Customers who have been hit by bank charges for unauthorised overdrafts are advised to seek advice on whether they have a case to reclaim these charges.

Meanwhile "the OFT is in talks with the banks to see a fairer and more transparent and reasonable system of charges” according to a Treasury spokesperson.

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