The BBA is the voice of the banking industry for all banks who operate within the uk
Banks join OFT in test case on overdraft fees
26/07/2007
Banks join OFT in test case to establish legal clarity on overdraft fees
Tomorrow morning a number of banks and financial services organisations(1) are taking the initiative, working jointly with the Office of Fair Trading (OFT) and the Financial Services Authority (FSA), to ask the UK courts to clarify the legal position regarding bank overdraft fees.
Court process
Banks believe the fees customers pay for unarranged overdrafts are fair and clear. However, this is clearly an issue where customers, as well as the banks, would welcome legal clarity. This is why banks have joined with the OFT to approach the courts for a ruling on this issue. It is unclear how long the case will last as that will depend on the court process.
Working together
The banks have approached the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) to agree a way forward to handle existing customer complaints. The FSA has agreed to issue a waiver(2), with immediate effect, to suspend the handling of customer complaints on this issue pending a decision by the court. Other banks who are not party to the court action will be applying to the FSA for a waiver and as such will be bound by the outcome of the court case.
For further information, please contact:
Press Office (020 7216 8970 )
Out of hours contact (020 7216 8888 )
Notes to Editors:
(1)The BBA's members involved in the legal action are: Abbey; Barclays; Clydesdale; HSBC; HBOS; Lloyds TSB; Royal Bank of Scotland/NatWest; and Yorkshire banks; and Nationwide Building Society.
(2) The FSA will tomorrow morning issue a press release announcing the details of this waiver. This can be downloaded from the FSA website (see link below).
(3) Banks will apply for a Stay of Proceedings on all current and pending cases to the Master of the Rolls for England and Wales, to the Attorney-General for Northern Ireland and to the Sheriff Courts in Scotland.
Related Links
FSA website (External Link)
OFT website - questions & answers (External Link)
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