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Bank Charges News & Analysis

All the information you need on the bank charges court case

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By Luke Culverwell - Barrister

1. OVERVIEW

The OFT said:                     

"Overdraft fees are unfair terms because the fees charged are excessive."

The Banks said:

"Overdraft fees are part of the price you pay for your current account, and the law says that you can't argue that a term is unfair just because it doesn't provide value for money - no-one would be able to make a profit on anything if that were the case."

The OFT said:

"Overdraft fees are peripheral charges - they aren't a price paid in exchange for a service."

The Court said:           

"Overdraft fees are a price paid in exchange for a service. You can't argue that that they are unfair because they are excessive but you can still argue that they are unfair on some other ground."

Possible routes forward are discussed on the following pages, but the options open to us will depend on how eager the banks are to prevent challenges on other grounds by settling on a case by case basis, and how much appetite the OFT has for another protracted legal battle or investigation.

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