Bank Charges Decision To Be Made In Six Months
July 21 2008
Consumers in their thousands will now have to wait six months to find out whether or not they will be able to claim back unfair overdraft charges.
The Financial Services Authority (FSA) has announced that it will now be January, when the extension on banks being allowed to put of paying out on claims, will be lifted.
This waiver was introduced some time during July of last year. It began with the Office of Fair Trading (OFT) proceeding with court action against the banks, to prove that the amount that customers pay in charges are unfair. The waver was due to expire next Saturday, but it has now been extended by six months.
The director of retail policy at the FSA, one Daniel Waters, was quoted as saying "The FSA continues to work closely with the OFT and the banks in reaching a resolution on the fairness of unauthorised overdraft charges. The waiver will be for six months, by which time we expect to have a decision from the Court of Appeal."
The Financial Ombudsman Service was dealing with complaints, at the time of the waiver being issued, but has agreed to cease proceeding with its cases for the time being. County court proceedings have also been placed on hold.
Martin Lewis, who works for the consumer website moneysavingexpert, said "It is nearly a year since the FSA first kyboshed reclaiming, and people are still sitting on their hands, unable to try to reclaim money that was taken from their accounts without their permission. The banks, meanwhile, continue to make hundreds of millions of pounds in charges. How long are people expected to wait?"
A lot of consumer groups have welcomed the delay though, as it means that they claims that go back a longer period can be made.
The previous ruling stated that consumers would be able make claims for charges dating as far back as six years. As long as this waiver is in place though, consumers will be able to claim back as far as July 2001
There was an OFT report that surfaced last week. The report claimed that the high street banks are making a profit of around �2.6 billion a year, just from bank charges. The same report was critical of the complexity of such bank charges, as well as them being somewhat opaque, by making it difficult for customers to compare current accounts
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