This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/8425766.stm
The article has changed 10 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Regulator drops bank charges case | Regulator drops bank charges case |
| (20 minutes later) | |
| The Office of Fair Trading (OFT) has decided not to take any further court action over the fairness of bank overdraft charges. | The Office of Fair Trading (OFT) has decided not to take any further court action over the fairness of bank overdraft charges. |
| Last month the Supreme Court ruled that the OFT could not use a part of the unfair consumer contract regulations to decide if bank charges were unfair. | Last month the Supreme Court ruled that the OFT could not use a part of the unfair consumer contract regulations to decide if bank charges were unfair. |
| However, the OFT said it still had "significant concerns" about the way banks operate current accounts. | However, the OFT said it still had "significant concerns" about the way banks operate current accounts. |
| It said "fundamental change" was still needed in the interests of customers. | It said "fundamental change" was still needed in the interests of customers. |
| "The OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations (UTCCRs) would have a very limited scope and low prospects of success," the OFT said. | "The OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations (UTCCRs) would have a very limited scope and low prospects of success," the OFT said. |
| "Given this, it has decided against taking forward such an investigation." | "Given this, it has decided against taking forward such an investigation." |
| 'Voluntary agreement' | 'Voluntary agreement' |
| Banks levy charges amounting to £2.6bn each year on their overdrawn customers and this makes up a third of their income from running current accounts. | |
| The OFT said the charges were "difficult to understand, not transparent, and not subject to effective consumer control". | |
| "We are committed to securing significant changes to unarranged overdraft charges going forward, whether through voluntary agreement with the banks or by other means," said the OFT's chief executive, John Fingleton. | |
| He threatened to ask the government to change the law if the banks did not co-operate, a stance supported by the Treasury. | |
| "We're working towards a voluntary agreement with the banks, but we don't rule out further action if this doesn't deliver the kind of changes we expect to see," said a Treasury spokesman | "We're working towards a voluntary agreement with the banks, but we don't rule out further action if this doesn't deliver the kind of changes we expect to see," said a Treasury spokesman |
| "Through the Financial Services Bill we are legislating to give consumers greater powers and protection for the future, including the ability to take a group action through the courts wherever there is mis-selling or abuse on the parts of banks," he added. | "Through the Financial Services Bill we are legislating to give consumers greater powers and protection for the future, including the ability to take a group action through the courts wherever there is mis-selling or abuse on the parts of banks," he added. |
| Supreme Court ruling | Supreme Court ruling |
| The banks and the OFT first agreed to stage a legal test case in July 2007, to decide if the OFT had the powers to rule on the fairness of bank charges. | The banks and the OFT first agreed to stage a legal test case in July 2007, to decide if the OFT had the powers to rule on the fairness of bank charges. |
| A consumer campaign on the issue had led to hundreds of thousands of complaints which threatened to swamp the UK legal system. | A consumer campaign on the issue had led to hundreds of thousands of complaints which threatened to swamp the UK legal system. |
| But after the High Court and Appeal Court sided with the OFT, the Supreme Court turned the tables. | But after the High Court and Appeal Court sided with the OFT, the Supreme Court turned the tables. |
| The five judges did not rule on the issue of fairness itself. | The five judges did not rule on the issue of fairness itself. |
| They decided that the parts of the 1999 Unfair Terms in Consumer Contract Regulations (UTCCR) that the OFT was trying to invoke did not, in fact, give it the powers it thought it had. | They decided that the parts of the 1999 Unfair Terms in Consumer Contract Regulations (UTCCR) that the OFT was trying to invoke did not, in fact, give it the powers it thought it had. |
| The judges said that overdraft charges were part of the price that customers agreed to pay for the package of services their banks provided, and as such were excluded from the scope of the regulations. | The judges said that overdraft charges were part of the price that customers agreed to pay for the package of services their banks provided, and as such were excluded from the scope of the regulations. |