Some more news in the campaign to get back unauthorised bank penalty charges; and its’ not happy news.
It has been revealed that banks will not have to consider giving refunds to those of us who complain about unauthorised charges for another six months!
This because the Financial Services Authority (FSA) has extended a decision it put in place over a year ago. They said they had done it to help the courts decide the fairness of bank overdraft fees.
They originally put a waiver in place last July following an announcement from the Office of Fair Trading (OFT) and eight high street banks that they would seek a high court ruling on whether the charges were fair.
The FSA explained that it was extending the suspension of its normal rules, which require banks to deal with complaints promptly, because the High Court has still not decided if bank overdraft charges are unfair or not.
Banks "will not be required to handle complaints relating to unauthorised overdraft charges within the time limits set out in the dispute resolution manual," the FSA said.
- What does the waiver mean?
The FSA has made some changes to the waiver; under the new rules banks must not make any changes to the level or structure of unauthorised overdraft charges without the FSA’S permission. They must also consider the claims of those of us at risk of falling into financial difficultly because of bank charges.
The OFT won the first leg of the process earlier this year when the court ruled that the charges came under its jurisdiction, but the banks are appealing against the decision.
Last week, the OFT said banks were making £2.5bn a year from us having insufficient funds in your accounts.
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Marc Gander, of the Consumer Action Group, said banks should be stopped from continuing to levy overdraft fees on those of us who had lodged penalty charge claims. He said:
"It's about time that there was some reciprocal obligation on the banks to stop their enforcement procedures. They should be stopped from defaulting people on disputed sums and instructing debt collection agencies on a matter which the banks are likely to lose.”
The consumer group Which? described the waiver as a "necessary evil" with Head of campaigns, Louise Hanson, saying:
"Scrapping it won't get people their money back; only the banks can do that by conceding defeat and paying up instead of continuing to string out the process."
Lifting the waiver would actually cost us money, Hanson warned, as although we can claim charges dating back to July 2001 while it is in place, a 6 year limit on claims will resume when it is removed.
"The clock would start ticking again on people's claims even though they've no prospect of getting their money back until this whole issue is sorted out," Hanson added.
Before the waiver was put in place, millions of refund letters were downloaded by those of you wanting to reclaim charges you had made for bounced payments and unauthorised withdrawals.
Banks refused to contest the claims in the courts and some many of you were able to reclaim thousands of pounds you had paid in fees.
- Waiver’s effect on claims
Even if the banks lose their appeal and the waiver is lifted it is unlikely you will be able to reclaim as much in the future. This is because instead of repaying the full amount charged banks are likely to cap repayments at the amount above the level of an agreed "fair" charge.
The second round of planned High Court hearings involving banks and the Office of Fair Trading, which may finally settle the issue, is expected to start before the end of the year.
However, any appeals could drag out the issue far into next year which may lead the FSA to further extend the waiver from its rules.
And this means having to wait even longer for the outcome that most of us want; a refund of all of our money!
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