Dec/090
Supreme Court Rules in Favour of Bank Charges
A Supreme Court judgement could be disastrous for millions of bank customers. The judgement has overturned earlier rulings that allowed the Office of Fair Trading to look into the fairness of charges for unauthorised overdrafts. Supreme Court president Lord Phillips stated that bank customers agreed to pay overdraft charges as part of the price of having a current account. As a result banks can continue to charge high fees when customers go overdrawn without authority, in order to subsidise the cost of providing accounts to other ‘good’ customers.
Although disappointed with the ruling the OFT has not yet made the decision to stop investigating unfair bank charges. Research undertaken by the OFT, showed that unarranged overdraft charges were “difficult to understand, not transparent and not subject to effective consumer control”. The continuation of investigations into unfair bank charges has also been supported by Gordon Brown. The advice offered by the banks to their customers at this time is to arrange an overdraft plan on opening an account to avoid any charges.
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