OFT test case on unauthorised overdraft bank charges

Agreement (8 pages, PDF) between the Office of Fair Trading and several major UK banks for a case brought to the High Court on the application of the Unfair Terms in Consumer Contracts Regulations 1999 to overdraft charges.

The OFT intends to seek a declaration that the fairness test under the regulations and the penalty test at common law apply to a (as yet undisclosed) “representative selection” of “charges to be imposed upon customers who seek to make payments for which they do not have available funds”. The intention appears to be to run the case in the abstract by reference to the banks' published terms and conditions, without any reference to any actual circumstances in which bank charges were levied.

The definition of the charges to be considered in the OFT test case appears to include the "returned item fees" that were found not to be covered by the fairness/penalty tests in the Berwick case (even though that case related mainly to overdraft excess fee which would not be covered by the OFT's test case).

For further information or advice please contact Franck Latrémolière.

Filed under OFT.

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