The UK’s largest banks have lost a test case about how much they charge customers for unauthorised borrowing. The High Court ruled this week that fees for going into overdraft or bouncing cheques should be governed by the standard legal rules on contracts. The banks had been arguing that these fees were at their discretion.
The Office of Fair Trading (OFT) is now expected to demand that banks cut their charges. If the banks charges are found to be unfair, they could be forced to refund customers as much as two billion pounds, according to the Independent newspaper which had been leading a campaign on the issue.
One million customers won refunds before the OFT and the eight big British banks brought the test case to see if the charges were legal. Customers reported snowballing bank fees which saw them owe the bank thousands of pounds.
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