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The History of Reclaiming UK Bank Charges.

Todays Date: November 16, 2018

The phenomenon of reclaiming of unfair bank charges began in late 2005, and since then it is estimated that 1 billion pounds has been successfully reclaimed from the banks. Also the website moneysavingexpert.com has claimed that over 6 million downloads have been made of its template letters by people wanting to claim back unfair bank charges paid.

The final appeal to the House of Lords is scheduled for the 22nd of June this year, and scheduled to last no more than three days. It will be worth looking back and examining how this case has progressed and take a look forward to see where it should go from here.

The central argument made by the banks is that the regulations the ‘Unfair Terms in Consumer Contracts Regulations’ should not apply to bank charges. The consumer’s argument is that the charges applied historically by the banks for overdraft interest and charges are not fair and proportionate. The banks have not argued that charges are fair, but that this law should not apply to bank charges.

The high court and the court of appeal do not agree with the banks. The court of appeal in February 2009, stated that the law does apply to bank charges. As well as the courts, we also have the Office of Fair trading who need to decide whether the charges are unfair or not. They have still not made a definitive ruling on this, but it is expected that they will state that the charges are unfair.

A brief outline of the timeline of this case; the first test case made in late 2005, with online communities picking up the issue early in 2006, and the wider media covering the issue in spring and summer 2006, becoming front page news by March 2007.

By July 2007 the Office of Fair Trading and the banks agreed to push a test case through the courts. The Financial Services Authority then created the waiver, which has placed all bank charge claim cases on hold. This waiver was initially for 12 months but has had two 6 month extensions applied to it, whilst the case has been going through the high court, the court of appeal and now the House of Lords. This waiver is expected to be left to expire after the latest appeal is completed by the House of Lords.

The test case by ruled against the banks. In April 2008, they processed with an appeal to the Court of appeal and were ruled against in October 2008. The court of appeal denied the right to appeal to House of Lords in the first instance, but the House of Lords overturned this decision in Apr 2009 and the case has now been scheduled for a June hearing.

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