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| Banks win on overdraft fees case | Banks win on overdraft fees case |
| (11 minutes later) | |
| Millions of bank customers hoping to be refunded overdraft charges have been dealt a major blow by a Supreme Court judgement. | Millions of bank customers hoping to be refunded overdraft charges have been dealt a major blow by a Supreme Court judgement. |
| The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts. | The court has overturned earlier court rulings that allowed the Office of Fair Trading to investigate the fairness of charges for unauthorised overdrafts. |
| The decision follows more than two years of test case litigation. | The decision follows more than two years of test case litigation. |
| At stake is an estimated £2.6bn of annual income for the banks, which had appealed against earlier rulings. | At stake is an estimated £2.6bn of annual income for the banks, which had appealed against earlier rulings. |
| Seven banks and one building society wanted the court to overturn two previous rulings that would have let the OFT investigate their overdraft fees. | Seven banks and one building society wanted the court to overturn two previous rulings that would have let the OFT investigate their overdraft fees. |
| In a three-day appeal in the House of Lords in June, the banks argued they would receive a "deluge of litigation" if the decision was made against them. | In a three-day appeal in the House of Lords in June, the banks argued they would receive a "deluge of litigation" if the decision was made against them. |
| Historic claims | Historic claims |
| All new claims against banks were effectively suspended in July 2007 when the OFT and the banks agreed to stage the test case to see if the overdraft charges were legal or not. | All new claims against banks were effectively suspended in July 2007 when the OFT and the banks agreed to stage the test case to see if the overdraft charges were legal or not. |
| This will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently [on hold] Lord Phillips class="" href="http://newsforums.bbc.co.uk/nol/thread.jspa?forumID=7271">Send us your comments | |
| The OFT has previously said that even if it lost, it would still try to use other powers, perhaps by instigating a full Competition Commission enquiry, to attack overdraft fees. | The OFT has previously said that even if it lost, it would still try to use other powers, perhaps by instigating a full Competition Commission enquiry, to attack overdraft fees. |
| In explaining his ruling, the Supreme Court's president Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the appropriate regulations. | In explaining his ruling, the Supreme Court's president Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the appropriate regulations. |
| But Lord Phillips added that this was not the end of the matter as the OFT could still try to scrutinise bank charges under other parts of the regulations. | But Lord Phillips added that this was not the end of the matter as the OFT could still try to scrutinise bank charges under other parts of the regulations. |
| "This will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently stayed [put on hold] in which customers have challenged the relevant charges," he told the court. | "This will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently stayed [put on hold] in which customers have challenged the relevant charges," he told the court. |
| The Supreme Court ruling will come as a bitter blow to the consumer organisations who have campaigned against what they considered to be unfair overdraft charges. | The Supreme Court ruling will come as a bitter blow to the consumer organisations who have campaigned against what they considered to be unfair overdraft charges. |
| The Court said it would not allow an appeal by the OFT to the European Court of Justice. | The Court said it would not allow an appeal by the OFT to the European Court of Justice. |
| The judge did not give any explicit guidance as to how the judicial authorities should deal with the frozen cases. | The judge did not give any explicit guidance as to how the judicial authorities should deal with the frozen cases. |
| "What is not clear yet is what happens to the refund claims that have been on hold since July 2007," said BBC personal finance reporter Ian Pollock, who was in court. | "What is not clear yet is what happens to the refund claims that have been on hold since July 2007," said BBC personal finance reporter Ian Pollock, who was in court. |
| "They may stay that way if the OFT attacks bank charges another way, perhaps by triggering a full Competition Commission inquiry. Alternatively, the judicial authorities may simply invite local judges to dismiss the claims that have stacked up before them." | "They may stay that way if the OFT attacks bank charges another way, perhaps by triggering a full Competition Commission inquiry. Alternatively, the judicial authorities may simply invite local judges to dismiss the claims that have stacked up before them." |
| 'Shock' | 'Shock' |
| Marc Gander, of the Consumer Action Group, said that he was "shocked" about the Supreme Court ruling. | Marc Gander, of the Consumer Action Group, said that he was "shocked" about the Supreme Court ruling. |
| Karen King: "I'm finding it really hard" | Karen King: "I'm finding it really hard" |
| "This is completely unexpected. It is a devastating blow," he said. | "This is completely unexpected. It is a devastating blow," he said. |
| Phil Jones, from the consumers' association Which?, said that he was "utterly outraged" by the ruling. | Phil Jones, from the consumers' association Which?, said that he was "utterly outraged" by the ruling. |
| Martin Lewis, Moneysavingexpert.com, said: "To lose this at this stage on a legal technicality is absolutely devastating. It should never have got here. The Court of Appeal said the banks should not be allowed to go to the Supreme Court. | Martin Lewis, Moneysavingexpert.com, said: "To lose this at this stage on a legal technicality is absolutely devastating. It should never have got here. The Court of Appeal said the banks should not be allowed to go to the Supreme Court. |
| "I think there are millions of disappointed people out there." | "I think there are millions of disappointed people out there." |
| But the British Bankers Association, which represents the banks, said: "We recognise this issue has been of real concern to a large number of our customers and we are pleased that this decision now brings clarity for all parties. | But the British Bankers Association, which represents the banks, said: "We recognise this issue has been of real concern to a large number of our customers and we are pleased that this decision now brings clarity for all parties. |
| "The banks will work with the regulators to ensure that the outstanding customer complaints are brought to a swift conclusion." | "The banks will work with the regulators to ensure that the outstanding customer complaints are brought to a swift conclusion." |
| Angela Knight, from the BBA, was asked whether they would continue to make unauthorised overdraft charges. | Angela Knight, from the BBA, was asked whether they would continue to make unauthorised overdraft charges. |
| "The banks are mindful of their customers, they know the concerns of those who have paid the unauthorised overdraft fees and those who have not," she said. | "The banks are mindful of their customers, they know the concerns of those who have paid the unauthorised overdraft fees and those who have not," she said. |
| "Individuals can avoid any charge by putting their overdraft arrangements in place first." | "Individuals can avoid any charge by putting their overdraft arrangements in place first." |