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Seven high street banks and a building society have won the right to charge customers who use unauthorised overdrafts.
The banks were appealing against an earlier ruling that charges for the overdrafts come under “unfair contract” rules and are therefore subject to regulation by the Office of Fair Trading (OFT).
But today the Supreme Court accepted the banks’ argument that free banking on current accounts was only made possible by charging customers who went into an unarranged overdraft.
The decision will come as a major blow to millions of customers whose refund claims may now be chucked out.
Customers who go into unauthorised overdraft can be charged as much as £35 or more for a single bounced payment - but campaigners claim the actual cost to the banks could be as little as £2.50.
Consumer group Which?, which led a campaign encouraging people to reclaim the charges, called the ruling a "bitter blow"
Which? chief executive Peter Vicary-Smith said: “This is a bitter blow for the millions of people who have been patiently waiting to get their bank charges back.
“Not only does it give banks licence to charge what they like for unauthorised overdrafts, but it could have ramifications for other areas of personal finance. The banks now have no excuse for introducing other fee charges.” express.co.uk/http://www.express.co.uk/posts/view/142421/Overdraft-charges-Banks-given-green-light-to-continue-rip-off
The banks were appealing against an earlier ruling that charges for the overdrafts come under “unfair contract” rules and are therefore subject to regulation by the Office of Fair Trading (OFT).
But today the Supreme Court accepted the banks’ argument that free banking on current accounts was only made possible by charging customers who went into an unarranged overdraft.
The decision will come as a major blow to millions of customers whose refund claims may now be chucked out.
Customers who go into unauthorised overdraft can be charged as much as £35 or more for a single bounced payment - but campaigners claim the actual cost to the banks could be as little as £2.50.
Consumer group Which?, which led a campaign encouraging people to reclaim the charges, called the ruling a "bitter blow"
Which? chief executive Peter Vicary-Smith said: “This is a bitter blow for the millions of people who have been patiently waiting to get their bank charges back.
“Not only does it give banks licence to charge what they like for unauthorised overdrafts, but it could have ramifications for other areas of personal finance. The banks now have no excuse for introducing other fee charges.” express.co.uk/http://www.express.co.uk/posts/view/142421/Overdraft-charges-Banks-given-green-light-to-continue-rip-off