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  • Update on unlawful bank charges campaign and the new ultimate guide.

    Attachment 6693The Reclaiming Bank Charges Campaign started by Stephen Hone back in 2004/05 has grown to be perhaps the biggest consumer revolution ever. It is estimated banks have repaid almost £2bn and Stephen Hone's templates have been used by millions of consumers and appeared on many web sites, including the BBC. Although some so-called experts at the BBA thought that the recent Supreme Court decision was a major setback, thankfully Stephen soon pointed out the error in this and the fight for justice was quickly put back on track.


    Update on unlawful bank charges

    Penalty Charges Forum has been campaigning against what (we believe) are unlawful bank charges for almost five years.

    The campaign was kicked off by Stephen Hone after his victory was picked up by the media almost at the same time as Penalty Charges launch, the Consumer Action Group(CAG) joined the campaign, followed by Money Saving Expert(MSE) and Legal Beagles(LB). , these consumer groups have been fighting for justice against unlawful charges that consumers face for going beyond their overdraft, by way of a bounced cheque or failed direct debits.

    In 2007, after three protests organised by Penalty Charges were held outside the Office of Fair Trading (OFT) and after the banks paid back roughly two billion pounds, the banks finally agreed to go to court against the Office of Fair Trading . The case looked at whether the OFT could assess the fairness of these charges under regulation 6 of the Unfair Terms in Consumer Contract Regulations 1999 (UTCCR). If so, it would be within the OFT’s remit to decide if they actually were unfair - provisionally the OFT had said they were not.

    The banks first lost in the High Court and then in the Court of Appeal, but in November 2009, the new Supreme Court overturned the earlier judgments and decided that ‘under regulation 6 the OFT could not assess the fairness of those terms as they may relate to their adequacy as against the services supplied.’ Yet, this was not the end, as the Court prominently stated that the ruling didn't stop the OFT assessing fairness on other grounds including regulation 5 and other forms of assessment under regulation 6.

    As the OFT said it will take time to examine whether to continue, four consumer group joined forces to consider new legal arguments. Money Saving Expert hired a top banking QC to examine what these new legal grounds could be, and to potentially redraft the template letters in light of them. It is understood that Money Saving Expert has received similar advice from the QC that the other consumer site had focused on.

    Taking all the above into account, we believe that there are substantial new areas under which the legality of Bank Charges can be assessed.

    We, along with the other Consumer Sites, are united in the fact that the right and correct way forward is for the OFT to take action and bring the consumer into the litigation by using the new legal arguments – this is important for consumers, as it will mean they do not have the burden of going to court.

    However, should the OFT refuse to take action, we have template letters prepared and will be publishing these if the OFT refuses to take action, so people can once again seek justice through the courts. We are also going to be asking members to join us in a group or as a class action, particularly seeking members who are entitled to Legal Aid. If you’re on benefits or anything that allows you to qualify for Legal Aid and would like to be involved, then please email Stephen@penaltycharges.co.uk with class action in the header.

    However, we must stress that it would be better if the Office of Fair Trading (OFT) does take action, and we will be waiting for that decision before commencing with any litigation, but we want to be in a position that we can move forward should the OFT decline.

    On the forum you find new Q and A section within the Ultimate guide forum, and a brief outline of the new legal arguments.

    Click here to jump to the forum
    Comments 1 Comment
    1. stuffed's Avatar
      stuffed -
      Is there an update to this as yet please??
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