'Unfair Bank charges' taken to court
If reclaiming hefty interest charges from the bank seemed like a good way of curbing unwarranted debt, then the following news may come as a bit of a disappointment.
The Office of Fair Trading is taking a number of banks to court to prove that overdraft charges are illegal. Although this may sound like good news, the banks are retaliating and believe that their fees are justifiable.
As a result, the FSA and banks are heading to the High Court to find out if overdraft fees are legal in the UK.
If the banks are found guilty, they may be accountable for paying customers up to six years worth of backdated overdraft charges forced on customers who let their account go into debt.
However, the legal process is a lengthy business and banks have been told by the FSA that whilst proceedings are taking place, they no longer have to deal with gripes from customers about unfair bank charges. They also say that the Financial Ombudsman will cease dealing with requests for reimbursement along with all country courts.
Many people have been pushed into debt by unwarranted bank charges. The likelihood of them now receiving reimbursement could be thwarted for several years, whilst the matter is thrashed out in court.
The FSA has advised any claimants who have received offers from banks to either accept the figure and close the matter, or wait until the outcome of the court proceedings.
Whilst people are left on ‘hold’ for their potential payouts, debt accrued from bank charges will continue to increase and there will be nothing that anyone can do about it.
Savings News posted on 20/08/2007 09:20:03
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