Bank Penalty Charges Illegal… Or Are They?
The W…. err…. Bankers squeal like stuck pigs
For years banks have levied penalty charges against customers who, for one reason or another, go overdrawn without their Bank’s permission. These charges are an illegal rip-off. One bank charges £39 for even minor infringements.
If an individual were to impose fines like this on captive customers they would probably find themselves charged with extortion and jailed. But these *ankers are the pillars of society and they think they are above the laws applied to the ‘little people’.
Thousands of ripped-off bank customers have demanded their money back, with interest and won! This was hurting the banks and they were squealing like stuck pigs so several banks agreed to submit to a test case by the Office of Fair Trading (OFT). In return the OFT, a body who is supposed to be protecting the public, allowed the banks to put settlements on hold until the test case was decided in the High Court. However, no restrictions were put on the banks to reduce or suspend the illegal charges.
Test case result announced
The test case started in July 2007 and the result was handed down on 24 April 2008, This case wasn’t about an individual claim but was to assess legal principle. It centred around two points: whether bank charges fall under unfair contractual terms laws and if they can be considered penalties.
The High Court came to a mixed decision but did decide that consumer contract regulations, known as ‘Unfair Terms in Consumer Contracts Regulations’ do apply to bank charges. Click this link for the full judgement.
So what’s next? A case conference is scheduled for May 22 and both parties will reconvene to decide how to proceed. This case isn’t over yet and being the *ankers they are, the pillocks-of-society, will continue to levy these penalties until it is. It could take years.
That shouldn’t stop you claiming though. Experts are of the opinion that the eventual decision of the OFT will go against the Banks. Putting a claim in immediately will ensure that you are can claim up to six years of charges from the day you claimed.
Martin Lewis of MoneySavingExpert.com has a very comprehensive section on his site explaining just how to claim. He has template letters you can download and an interest calculator. Oh and just for fun click on the Bank Charges Song below.
For more on the “Bank Charges Song” click here.
Links to organizations mentioned in this article
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