What you can do about unfair bank charges

Have you paid unauthorised overdraft charges?
Find out what the Supreme Court ruling means for you
Help for consumers in financial hardship
Support the Which? campaign for banking reform

Black day for bank customers

For the millions of bank customers who were looking to reclaim unfair bank charges, 25 November was a black day. The Supreme Court ruled that the Office of Fair Trading could not assess the fairness of bank charges. For consumers who have been caught out by the onerous charges imposed by their banks, it looks like the end of the road. The OFT has stated that 'any investigation it were to continue into the fairness of current unarranged overdraft charging would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation.

What’s the situation now with bank charges?

The Supreme Court has overturned the decision of both the High Court and the Court of Appeal and found in favour of the banks in the charges test case, brought by the OFT. The Supreme Court decided that ‘fairness rules’ did not apply to unauthorised overdraft charges.

You can find out how to help our campaign on the Which? banking crisis homepage.

To find the best current account for you, including those with the most reasonable overdraft interest rates, check out Which? Best rate current account reviews.

What about people in financial difficulty?

Previously the banks were obliged to consider bank charges complaints where the claimant was in financial hardship, despite other claims being on hold under the terms of the FSA’s waiver on bank charges.

Although the waiver has now been removed and the Supreme Court has ruled against the OFT, the banks still have an ongoing duty to treat customers sympathetically if they are in financial hardship. This obligation is backed up by the Financial Ombudsman Service, who still look at all cases on their merits.

The FSA defines financial difficulty as being unable to pay for reasonable living expenses, such as rent, utility bills and council tax or being unable to meet financial commitments such as mortgage or loan repayments. If this applies to you should make this clear to your bank and give them the necessary information for them to consider this. If they do not treat you sympathetically, take your complaint to the Ombudsman, who may be able to help.

What does Which? want?

Which? wants the government to change the law so that overdraft charges can be assessed. This will help ensure a future where charges are clear, transparent and proportionate. There is a Bill going through Parliament which could include this change, and Which? is meeting politicians to ask them to support this. For more details, check out our guide to how you can take action.

Avoid claims handlers

Which? CEO Peter Vicary-Smith said: 'Consumers have been left confused by this decision. It looks like the big refund war is over but there is a narrow possibility that some people might be able to claim back their bank charges. The situation needs clarification and we're looking into it as a matter of urgency. We've been fighting against unfair bank charges for many years and will continue to try to get redress for consumers.

'Meanwhile, people should sit tight and avoid claims handlers, who'll charge a large fee for doing something you could do yourself.'

This is an area that Which? will continue to track very closely through our Future of Banking Commission and we're still looking at tangible ways in which we can help certain groups.