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Overdraft Charges
What is happening?
On 27 July 2007, the Office of Fair Trading (OFT) and the major UK banks and a building society started a court case to decide on the legality of unauthorised overdraft charges.Together, we provide more than 80% of current accounts in the UK. http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=145&a=10108.
This case is being called a "test case" because the decision will clarify the law in this area and is likely to apply to all current and new claims against current account providers about unauthorised overdraft charges.
We will continue to post updates on our website to keep clients informed of progress on the test case as this could run for at least a year.
What will happen to client complaints about unauthorised overdraft charges?
Most banks and building societies will not be dealing with or resolving client complaints on unauthorised overdraft charges while the test case is running.
If you do complain about your unauthorised overdraft charges, we will write to tell you that we have received your complaint and that we will record it on your file. When a final decision is reached in the test case, we will contact you as soon as possible to tell you how we will resolve your complaint. We will apply the decision in the court case to all complaints we receive.
Why are the banks allowed to stop dealing with unauthorised overdraft charge complaints during the test case?
We applied to the Financial Services Authority (FSA) for a suspension of the normal timetable for dealing with unauthorised overdraft charge complaints. The FSA decided that, in the circumstances it was appropriate to grant us a suspension of our obligations under the FSA's complaint handling rules while we sought legal certainty on this issue (which is now affecting more than 100,000 UK clients). The suspension is subject to a series of conditions designed to protect clients' rights. You can read the form of the FSA suspension (direction) here: http://www.fsa.gov.uk/
All clients who have made a written complaint on unauthorised overdraft charges but who have not yet had their complaint resolved will receive a letter to explain the position with respect to their complaint.
Can I make a court claim for a refund during the test case?
Yes, but we will apply to the court to put your case on hold while the test case is running. This is because the issues being raised in client complaints on unauthorised overdraft charges are being considered in the test case.
Can I complain to the Financial Ombudsman Service about my bank charges?
The Financial Ombudsman Service (FOS) has decided not to review complaints while the test case is running. If you do complain to the FOS, you will receive a letter explaining that.
What if I have already been made an offer?
We will stand by any offer to settle a complaint or court claim that we have already made to our clients. If you have received an offer to settle from us, we will be writing to you again shortly. Our letter will explain that clients have two months to decide whether to refuse our offer and wait for the decision in the test case. If you do choose to refuse an offer, your complaint or claim will be held and recorded by us until there is a final decision in the "test case". We will then contact you again as soon as possible to finally resolve your complaint.
I have already accepted an offer from you. Will my claim be revisited?
If you have accepted a 'full and final settlement', we believe it unlikely you would be awarded a further sum even if the test case indicates a potentially larger amount. However, this does not preclude you from asking for repayment of any new charges incurred if the courts find they are unlawful.
How long will the "test case" take?
At this time it is too soon to give any exact timescales for a conclusion to the "test case" but it could go on for more than a year.We have agreed with the OFT and the FSA to conduct the test case in an efficient, prompt and orderly way.
Where can I find out more?
We will update this page with any developments in the proceedings
You can contact us by calling on 020 7753 1000. Lines are open 24 hours a day, 7 days a week.
Alternatively, you can find more information through the following links: