You can restart your bank charges claim

by Ed Bowsher on 25 November 2009  |  0 comments
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The bank charges saga hasn't finished. You can restart your claim and it might succeed.

Today's news on bank charges was extremely annoying, but it's been a fascinating day as more information has emerged. 

So here's what I've learned this afternoon: 

• The FSA has lifted its 'waiver'. It was this waiver that stopped the vast majority of bank charges claims progressing through the courts from 2007 onwards. The idea behind the waiver was that the courts shouldn't be blocked up with claims until higher courts had ruled on the Office of Fair Trading's (OFT) case. Now that the OFT's case has concluded, the waiver is lifted.
   
• So if you've already made a claim and your claim has been frozen up till now, things can start to move again. Your first step will be to write a letter to the courts asking for the 'stay' on your claim to be lifted. The courts aren't going to lift all the stays unprompted - presumably because they don't want to be flooded with bank charges cases.
   
• If you haven't made a claim before, you could start one now. The important point is that the claim should be under Section 5 of the Unfair Terms in Consumer Contracts Regulations 1999. Today's court case was all about Section 6 of those regulations and the Office of Fair Trading has lost on that point. But the Supreme Court dropped hints that campaigners have a stronger case under Section 5, and there's no reason why ordinary people can't claim under that clause now. In fact, many of the original claims were under Section 5 all along.
   
• The really interesting question is: what will the banks do now? Prior to the FSA's waiver, most bank charges claims were settled before they reached court. Indeed, the banks paid out something like £0.75 billion in settlements as a 'goodwill gesture.' As claims restart, will the banks start settling again, or will they fight? And if the banks fight, how will county court judges rule on the claim?
   
• Another question is what will the OFT do? Will it make a claim under Section 5? Does it matter what the OFT does? Can other groups pick up the baton if the OFT doesn't want to fight anymore?
   
• And what about the FSA? Could the banks persuade it to reintroduce the waiver if courts are flooded with claims? It's hard to know for sure, but I hope that the FSA will be tougher this time round and not put a freeze on claims for two long years. I also think the FSA would look pretty weak if it lifted the waiver and then reimposed it again.  

So it looks like the whole claims saga is starting again. Let's just hope that it doesn't get bogged down again in endless appeals and litigation. The whole thing has gone on for far too long already.

> Check out our Reclaim bank charges goal. It'll help you start your claim for compensation.

> Bank charges: The banks have won!

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> Many thanks to Marc Gander at Consumer Action Group for his help on this post.