22nd February 2010
The consumer campaign to reclaim billions of pounds in excessive
bank overdraft charges could be back on after a customer won the
right to challenge their bank in court.
A client of the Govan Law Centre has been giving the go ahead to
challenge the Bank of Scotland's bank charges under the Consumer
Credit Act.
The legal challenge represents a fresh approach after the
Supreme Court ruled last November that bank charges could not be
challenged as unfair under consumer contract rules.
Bank of Scotland will now have to prove in a court case - due to
commence in June 2010 - that its charges are not excessive.
Mike Dailly of Govan Law Centre said: "Over the last few weeks,
UK banks have been telling one million customers that there were
now no grounds to reclaim bank charges, standing November's Supreme
Court's decision.
"The Bank of Scotland now faces a fresh challenge that charges
were excessive and unfair under the Consumer Credit Act.
"That is a potentially devastating case for them to answer,
because under this new law, the onus of proof is on the bank to
show that charges were fair."
November's ruling led to regulator Office of Fair Trading (OFT)
throwing in the towel in its bank charges fight after over two
years of legal battles with the banks.
That is a potentially devastating case for
them to answer, because under this new law, the onus of proof is on
the bank to show that charges were fair.
Despite winning the argument at both the High Court and Appeal
Court stages, it ultimately lost at the highest court in the land,
the Supreme Court.
As a result, hundreds of thousands of bank charges victims who
were waiting for their banks to refund them years-worth of bank
charges were left disappointed and without a legal leg to stand
on.
But Glaswegian Jennifer Sharp, whose case has been on hold since
2007, has now breathed life back into the campaign after the
Glasgow Sheriff revived her case last Friday.
Her lawyers argued that under the Consumer Credit Act, there had
been an unfair relationship between her and her bank, which was
illegal.
They argued that it was unfair because her charges had been used
to subsidise the free banking of customers who stayed in the
black.
A Bank of Scotland spokesman said: "It would be inappropriate to
comment on any customer case before the courts as it is still part
of an ongoing legal process."
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