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OFT Bank Charges Test Case

17 February 2009

[Updated: October 2009]

Q: Can you explain what the test case is and how it affects me in claiming my bank charges?
A: On 27 July 2007, the Office of Fair Trading (OFT) and seven UK banks started a High Court case to decide if the OFT can utilize the “Unfair Terms in Consumer Contract Regulations 1999” when investigating whether or not the charges are unfair. This case is being called a 'test case' because the decision will clarify the law in this area and will apply to all personal bank account claims, both new and pending. Until there is an outcome, all banks and building societies have been granted a “waiver” by the Financial Services Authority, which means they can and will hold your claim. The waiver, which was renewed on 22nd July 2008 will expire on 26th July 2009, at which time the Financial Services Authority will decide if they will extend it or not.

Q: The case was won by the OFT (consumer) in April 2008, what did they win?
A: Unfortunately, the Judge hasn't ruled whether the charges are unlawful. Instead, the Judge has simply ruled that the OFT is allowed to assess the charges for fairness under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

Q: What does the judgment mean?
A: On 26th January 2009 the High Court of Appeal confirmed what bank charges campaigners have been arguing for two years, that consumer contract regulations, known as 'Unfair Terms in Consumer Contracts Regulations' do apply to bank charges, meaning 'fairness' counts. While it's not the end of the line, the decision is a massive step and paves the way for the OFT to decide whether it thinks banks' charges are unfair.

Q: When will this finally be resolved, so that I can claim my money?
A: The OFT will now need to complete it's investigation, and it is then up to the FSA to decide if they will keep their waiver in place which is due to expire on the 26th July 2009. As you can see, although we are doing everything we can to get your money back, our hands are tied by the FSA waiver. However, we are keeping a very close eye on this case and will keep you updated as soon as there are any developments.

Q: What do I do now?
A: If you have incurred any further charges since initially logging your claim hold onto your statements until the waiver is lifted, at which point we will contact you so that we can add these charges to your claim.

Q: If I have not sent you my claim yet should I wait?
A: No, don't wait. You can only reclaim the last six years worth of bank charges due to what's called the 'statute of limitations'; and technically the date this starts is when you submit a claim. It is therefore crucial to send in your claim to us immediately. Click here to make a bank charge claim. Should the Waiver be lifted by the Financial Services Authority, thousands of people will begin claiming their bank charges, which is likely to cause a huge backlog. This could mean it would take months for them to respond to a new claim; however if your claim is already registered, you will be amongst the first in the queue.

Q: I have already accepted an offer from my bank. Will my claim be revisited?
A: If you have accepted in 'full and final settlement', we believe it is unlikely you would be awarded a further sum even if the test case indicates a potentially larger amount. However, this does not preclude you from asking your bank for repayment of any new charges should the waiver be lifted by the Financial Services Authority.

Q: Challengeyour.com has already started claiming my bank charges on my behalf. What happens now?
A: As explained above, all banks and building societies have been granted a waiver by the Financial Services Authority, which means they can and will hold your claim. When this announcement was made, The Financial Ombudsmen Service advised that it will not look at any cases until the Courts have made a Ruling. Furthermore, any cases currently being heard in the County Court have also been 'stayed' (frozen) until the High Court gives its Ruling. It is for this reason that our hands are tied until the legal proceedings are concluded. Challengeyour.com is committed to ensure that your bank adheres to its obligations and acknowledges receipt of your claim, and will press ahead with your claim as soon as there is a positive outcome from the test case.

Q: My bank has continued to charge me even though I have started my claim. What can I do about these charges?
A: If you have incurred any further charges since initially logging your claim with us, please hold onto your statements until the waiver is lifted. At which point we will contact you to update us so that we can add these charges to your claim.

Q: How can I keep up to date with all this information?
A: Challengeyour.com will keep you up to date with any news on the case and the waiver as soon as it breaks. However, you can also visit the following sites for further information about claiming bank charges:

The Financial Service Authority:	http://www.fsa.gov.uk/
The Office of Fair Trading:	www.oft.gov.uk
The Financial Ombudsman Service:	www.financial-ombudsman.org.uk