The long awaited High Court test case into unauthorised bank overdraft charges is set to start tomorrow.
The case, brought by the Office of Fair Trading (OFT) against seven leading banks – listed in our table, below – and the Nationwide building society, will look into whether the fees are fair.
The watchdog will argue that the overdraft charges come under the scope of the 1999 Unfair Terms in Consumer Contracts Regulations.
If the judge rules that this is the case, the court could then decide at a separate hearing on what a fair charge should be.
The hearing is expected to last three weeks with judgment to follow some time later.
Banks are thought to make between £2 billion and £3.5 billion a year from the overdraft charges.
Fees can be as high as £35, but critics claim that the actual cost to banks is as little as £2.50.
Which? has long been campaigning against high overdraft charges, and many thousands of consumers have downloaded our template letters and factsheets on reclaiming.
In total, it’s estimated that several hundred thousand people have successfully reclaimed up to £1 billion of the charges.
With certain exceptions, banks have been allowed to suspend processing of customer complaints about these charges until the end of the test case.
Which? personal finance campaigner Doug Taylor said: ‘We strongly recommend anyone who has paid charges to get their claim in now and not wait until the court case is resolved.You can use the information and template letters in our bank charges step by step guide to make your claim.’
The Financial Services Authority (FSA) has told the banks that they must continue to process claims where a customer is suffering genuine financial hardship.
If you think you are in this category, make sure you state this clearly to your bank. If your bank ignores you or doesn’t take proper account of your hardship, contact the Financial Ombudsman Service.