FAQ - The New Bank Charges Position

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After  a rethink and having come through a pessimistic period about bank charges, it seems that there may well be  a chance of recovering historical bank charges more easliy than I had first imagined.

In line with my other article,  Bank charges - where to now,   it is necessary to prove some unfairness.  But it has occurred to me that probably most of the banks have misrepresented their charges in some way.

Certainly none of the banks have ever admitted before that they earn 30% of their current account revenue from bank charges and that this revenue is used to cross-subsidise "free-banking" for others.

However, the banks did make this admission in the Supreme Court.  The Supreme Court accepted this and it was for this reason that the banks won their case.

However, it may be possible to turn the tables.  It is the fact of this Supreme Court admission which finally and definitively gives the lie to all of the banks' earlier justifications that their charges were reasonable or that they merely represented their administrative costs.

The banks cannot go back on this admission.  To do so would be to admit perjury.

They may now be required to be obliged to explain why they they didn't tell this truth to their customers in the first place.

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The Bank Charges decision - where to now.

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However - please also read this new developement:-

Bank charges - important new development

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The Supreme Court bank charges decision in November 2009 effectively blocked the Consumer Bank Charges Revolution which was started in January 2006.
The Supreme Court's decision made it clear that the unfairness -- or otherwise -- on its own, of bank charges was not a ground for challenging their validity and for claiming reimbursement.
The Supreme Court said that the reason for this was that as bank charges apparently have become part of the UK banking industry's core business, they did not fall to be assessed for fairness under Regulation six of the Unfair Terms in Consumer Contracts Regulations by the OFT or by the courts.

(However, if your charges come from a loan company or some other non-current account provider/bank - then you may be able to claim your charges -see here)

However, the Supreme Court threw in a teaser: that their judgement did not necessarily block the way for bank charges refunds. The Court said that there were other avenues which could be explored under Regulation five of the Unfair Terms in Consumer Contracts Regulations.

Since then there has been an enormous amount of discussion as to how claims for bank charges refunds under Regulation five might successfully be made.
Regulation five deals with the quality of the supplier/consumer relationship. Regulation five is not directly concerned with the fairness of the bank charges. Regulation five is more concerned with the fairness of the circumstances in which the bank charges have been applied.
It should also be pointed out that Regulation five is not only concerned with bank charges. Regulation five refers to any term of any consumer contract which is imposed unfairly

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