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The case brought by the OFT to challenge the way in which banks levy charges on their customers for a variety of "events" including going overdrawn, is being heard in the High Court and will probably run a full 15 days in total.
The case is being defended by representatives of seven banks and Nationwide Building Society. The result of the hearing will have a huge impact on the prospect of claims for the refunding of bank charges. Of course many claims have already be lodged and some of those have even been settled, but when the decision was made to hear the case in the High Court a stay was made on any further settlements until conclusion of the hearing. There are however thousands of these pending claims resting on the decision which could see millions of pounds being refunded with the prospect of even more claims being lodged in the future.
However, once the decision is reached, if one is, then the claims gravy train doesn't quite start up yet. No, all a decision against the banks would allow is for the OFT to rule whether their charges are fair or not. And who's to say there won't be a strong appeal if the banks lose - the value of this revenue stream to them is thought to be in excess of £10million per day.
The OFT claims that many of the banks have been rapidly re-writing their terms and conditions recently, in the hope of making themselves immune from future claims. But if you have received a new set of conditions they may not be that easy to understand. One customer of NatWest was prompted to read 24 pages of online terms and conditions with no indication of what, if anything, had changed. It is this type of confusing communication between banks and customers that the OFT is trying to stamp out. Fairness and Transparency rules are sweeping across the financial industry and it seems the powerful banks are slightly reluctant to fall into line.
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