27 July 2007
High street banks will today be the subject of a High Court trial brought about by the Office of Fair Trading (OFT) in a bid to prove that overdraft fees charged by banks are unlawful.
The banks under scrutiny are Abbey National, Barclays, Clydesdale, the HBOS group, which includes Halifax, HSBC, Lloyds TSB, the Royal Bank of Scotland Group, which includes NatWest, and Nationwide Building Society.
Both banks and credit card providers have come under fire in recent years for the seemingly extortionate fees they charge as a penalty for customers breaching their agreed overdraft.
The OFT has been investigating the charges in light of the Unfair Terms in Consumer Contract Regulations Act, which protects the consumer against small print shocks.
Previously the OFT had tried to encourage banks to lower their fees through a voluntary scheme but the lack of support has led them to a court case.
Some fees for a single bounced cheque for instance had reached 39, despite the estimated cost to the bank of such a slip-up falling at around two pounds.
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