Bank charges claim is turned down

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A bank customer has failed in his bid to force NatWest bank to justify its unauthorised overdraft charges.

Newly-qualified barrister Tom Brennan had asked the court for permission to sue the NatWest for damages, over what he claims are "unfair" bank charges.

Victory for Mr Brennan would have forced a bank, for the first time, to justify its fees in court.

However, City of London court turned Mr Brennan's application down and refused him the right to appeal the decision.

Allegations

Mr Brennan had alleged that the bank imposed overdraft charges knowing they were unjustifiably high and that in doing so it caused him economic harm by damaging his credit rating.

Mr Brennan has already had his overdraft charges of £2,548 repaid to him, and the bank has also offered him a further £1,600 to settle his claim, without an admission of any liability on its side.

But Mr Brennan was seeking to create a test case by claiming the right to sue, not on the direct grounds that his overdraft charges were too high, but for exemplary and aggravated damages to punish the bank's behaviour.

Barristers acting on behalf of NatWest argued that Mr Brennan's case was unsustainable in law and his arguments "bizarre".

Moved on

However, since the case was heard in May, events have moved on.

Last week, the Office of Fair Trading (OFT) came to an agreement with eight banks and building societies to take a charges test case to court.

The two sides - the banks and the OFT - will set out their arguments and a precedent-setting ruling will be made by the court.

The case is intended to bring clarity to the whole issue of fees for unauthorised overdrafts.