Banks braced for charges defeat

[Taf]

The UK's biggest banks are bracing themselves for defeat in the High Court test case about overdraft charges.

Mr Justice Andrew Smith will hand down his judgement later on whether or not the Office of Fair Trading (OFT) can rule that bank charges are unfair.

If the OFT wins, it is then expected to decide that bank charges are too high.

Since the beginning of 2006 hundreds of thousands of bank customers have tried to reclaim their charges on the grounds that they were too high and unfair.

At stake is not only the ability of aggrieved customers to reclaim their charges but also the ability of the banks to generate an estimated £3.5bn a year in income from levying them.

http://news.bbc.co.uk/1/hi/business/7362856.stm

What's the betting the judge will rule mostly in favour of the banks?

[Taf]

If the banks eventually suffer a complete defeat on the issue, then it has been widely predicted that they will try to recoup their losses by abandoning the long standing policy of so-called "free banking" for customers in credit.

Instead, monthly or annual charges could be introduced as standard for running an ordinary current account.

They've been trying to do this anyway..... and with the crediot cruch, etc, hitting their profits they are liable to jump this way to make more money.

[RojBlake]

monthly or annual charges could be introduced as standard for running an ordinary current account.

welcome to what the scum banks have been doing here for years. though some do offer 8 free transactions a month, and some offer an account with no fees for pensioners

[Lisa]

if my bank starts charging for a standard account, that never goes over drawn or causes them any problem other than earn them profit on my money just sitting there, they will loose my buisness.

I think it is disgusting, they earn billions in profit and this will penalise those of us who do our best to keep our accounts in the clear, and the people who can ill afford to loose money. Especially those on benefits who HAVE to have a bank account ot recieve thier money!

[Taf]

The judge has produced a huge document which apparently says the OFT can decide if the charges are unfair or not... but the banks are getting another legal challenge ready... this could take years...

[Lisa]

since banking is essential, you literally cannot live without a bank account now. They mustn't be allowed to stop all free accounts

[Taf]

Brownose seems to think we should pay for banking....

[Lisa]

we do already.
they take profit on every penny that is sitting in their banks!

[fred]

they       pay 0.1% interest on current accounts and use that money to loan out at anything up to 27%.  if they try and charge me fees they'll have one less customer.

[Taf]

The other thing causing consternation to the OFT is credit card charges and fees... they have leapt in recent months.... some as much as 25% and £22.50 for going overlimit!!!!!

[fred]

mind you, I've never paid bank charges and not paid any CC charges or interest in many years.   simple really. keep the current a/c in credit and pay the CC bill on time.

[Taf]

Ditto... but HMG forced weak-minded people into having bank accounts, then insist on paying into them every 28 days.. a right problem when doing the accounts...

[Anna]

I claimed back all my charges the other year (I got in quick), I got £454 back, then I closed my account (as I didn't want it anyway).

I have a free bank account with Natwest, I have had it since I was 16.  Everytime I go in the bank they ask if I would like to 'upgrade' to a gold account (for £12 a month) and each time I refuse.  There is nothing within the 'perks' package that I want or need, so why should I pay £144 a year for it?