As UK banks loose overdrafts court case, what does it mean for us all?

                                                                                         

In the test case against UK banks overdraft charges, it was ruled that the OFT (Office of Fair Trading) can decide if bank overdraft charges are unfair or not and this means it's up to the OFT to decide what is a fair overdraft charge.

The banks have said "Further court hearings will be required before the test case process is concluded." Even if the OFT win and we can all claim back our overdraft charges you can bet that the banks will then be charging us all for our current accounts, meaning the end of free banking for everyone.

This stemmed from consumers anger with bank charges, sometimes running into hundreds of pounds, for unauthorised overdrafts. Back in 2006 the thinking was that these charges were, in-fact, illegal because they must be reflective of the actual costs incurred by the bank, i.e. the charges must be reasonable. Also the credit card industry had seen an amendment to credit card fees, backed up by the OFT (Office of Fair Trading) - So the question was asked 'why should banks get away with the same thing on overdraft charges?'

Whatever happens with this court case it looks like we'll all end up paying out in the long run as the banks will turn this ruling on it's head and introduce new fees that we have to pay upfront. Wonderful.

The banks will always find a way around the regulations imposed on them in order to skim more profits from their customers. It's just a shame that we all have to use current accounts these days in order to get paid and get credit. If there was some other way of holding your own, hard earned, money without allowing profiteering banks to get their hands on it, I'm sure millions of people would move away from banks...

About the author:
Simon Duffy writes for the Financial Blog a UK Finance Blog talking about all aspects of personal finance including loans blogs, credit cards blogs, tenant loans, credit cards blogs, mortgages blogs,

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