Lloyds Banking Group has said that it will ask local courts to dismiss outstanding overdraft charges claims from consumers, in accordance with Wednesday’s ruling by the Supreme Court.
Many thousands of claims had been on hold after the Financial Services Authority granted a waiver to banks in 2007, allowing them to stall payments until the test case against the Office of Fair Trading had reached a conclusion.
The OFT had sought to establish its power to assess overdraft charges for fairness, but the Supreme Court has now overturned two previous judgments to rule in favour of the banks. As a result, the FSA waiver on bank charges reclaims has been lifted.
Overdraft claims may be dismissed
Lloyds Banking Group owns Lloyds TSB, Halifax and Bank of Scotland. In a Q & A article on the Halifax and Bank of Scotland websites, it states: ‘During the test case, we agreed with the FSA and the Financial Ombudsman Service (FOS) that customer complaints relating to unarranged overdraft charges would remain on hold.
‘As the judgment concludes the test case, the FSA has agreed that these complaints should no longer remain on hold.
‘This means that for those customers who currently have an outstanding complaint about unarranged overdrafts, we’ll be writing to them shortly to let them know what today’s judgment means for them.
‘We will be asking the County and Sheriff Courts to apply the Supreme Court judgment to dismiss any claims they currently have on hold.’
Reclaimers in financial hardship
Lloyds Banking Group says it will continue to ‘treat customers sympathetically’ where they are vulnerable or in financial hardship.
Which? chief executive Peter Vicary-Smith said: ‘If you’re in financial hardship, tell your bank. They’re unlikely to give you your money back, but they have to take your circumstances into account and may waive any future charges. If your bank refuses to help you, then go to the Ombudsman.’
Which? also urges anyone disappointed by Wednesday’s bank charges verdict to stay away from claims handling companies, who are still trying to win new customers by claiming they can help people win back their bank charges.
Mr Vicary-Smith commented: ‘The outlook is bleak for anyone with an outstanding claim and we’re concerned that yesterday’s ruling could drive people into the arms of unscrupulous claims handlers. Beware of companies who contact you promising to get your bank charges back, and never pay an upfront fee.’
The future for bank charges
For more information on what to do next if you’ve been affected by bank charges, read the Which? Bank charges update.
Meanwhile, if you’re angry about the verdict, why not join Which? in campaigning for reform of Britain’s banks by signing the petition on the new Britain Needs Better Banks website.
Which? Money when you need it
You can follow @WhichMoney on Twitter to keep up-to-date with our Best Rates and Recommended Provider product and service reviews.
Sign up for the latest money news, best rates and recommended providers in your newsletter every Friday.
Or for money-saving tips, and news of how what’s going on in the world of finance affects you, join Melanie Dowding and James Daley for the Which? Money weekly money podcast
For daily consumer news, subscribe to the Which? news RSS feed here. And to find out how we work for you on money issues, visit our personal finance campaigns pages.