The UK’s banks lost the much anticipated
and controversial test case last month, against the Office of
Fair Trading (OFT) over the fairness of banks’ overdraft
charges. The judge that oversaw the case ruled in favour
of the OFT as the body with the power to determine the fairness
of the charges.
While this does not necessarily mean that the charges are unfair,
it does pass the decision making power over to the OFT, who can
determine what is a fair sum to charge an individual for exceeding
an agreed overdraft limit.
Customers have had cases against the banks frozen until 22nd
May, when the test case and appeals procedure is concluded. Provided
the banks aren’t successful in any appeals against the
decision, it is up to the OFT to determine a reasonable charge
for an unauthorised overdraft.
There is wide speculation that, should the banks be defeated
outright in this case, the face of ‘free banking’ for
customers in credit will change.
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