Reclaiming Bank Charges Final Court Case Date Set.

Since the Reclaiming bank charges phenomenon began in late 2005, it estimated that 1 billion pounds has been reclaimed from the banks, and the website moneysavingexpert.com claims that close to 6 million template letters have been downloaded from its website alone.

As the final appeal to the House of Lords is due to be heard on the 22nd of June this year, and scheduled to last three days. It may be worth looking back and examining how this case has developed and looking forward to where it should go in the future.

The basis of the banks case is that the consumer regulations known as the ‘Unfair Terms in Consumer Contracts Regulations’ do apply to bank charges. The logical counter argument by consumers is that the charges applied by banks for charges and overdraft insurance are not fair and proportionate. The banks’ counter argument is solely that this law does not apply to bank charges.

So far the high court and the court of appeal do not back up the banks and have ruled with the consumer. The court of appeal in February 2009, ruled that this law does apply to bank charges. In conjunction with the courts we also have the Office of Fair trading who need to rule whether the charges are unfair or not. Though we are waiting for a definitive ruling on this, it is expected that they will rule that the charges are unfair and that charges can be reclaimed.

A short outline of the timeline of this case is that the first test cases were made in late 2005, with certain online communities picking up the issue early in 2006, and the mainline media covering the issue in spring and summer 2006, becoming front page news with the newspapers by March 2007.

By July 2007 the Office of Fair trading and the banks agreed to push a test case through the courts. And the Financial services Authority then created the waiver, which has placed all bank charge claims on hold. This waiver has been extended by 12 months, in addition to the original 12 months whilst the case has been processed by the high court, the court of appeal and now the House of Lords. This waiver is expected to be waived after the latest appeal is completed by the House of Lords.

The initial test case ruled against the banks In April 2008, they proceeded with an appeal to the Court of appeal and were further ruled against in October 2008. The Court of Appeal denied the right to appeal to House of Lords in the first instance, but the House of Lords overturned this decision in Apr 2009 and the case has now been scheduled for a June hearing.

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