OFT drops bank charges investigation
Banks investigation dropped, but customers can still fight back
Tuesday, 22, Dec 2009 11:09
The Office of Fair Trading (OFT) has dropped its investigation into unauthorised bank charges, it has announced today.
The move comes following the OFT's defeat at the Supreme Court last month. The test case ruled the organisation could not use unfairness rules to help customers claim back charges for unauthorised overdrafts.
And while lawyers said the OFT could try the case again under different laws, the OFT thought its prospects of success were low.
The decision been described as a blow to consumers by industry experts, but the OFT said it was deeply concerned that the market for personal accounts was not working and vowed to continue supporting banking customers.
John Fingleton, chief executive of the OFT, said: "We are committed to securing significant changes to unarranged overdraft charges going forward, whether through voluntary agreement with the banks or by other means."
He said customers could play their own part by looking for the best value products and switching accounts if necessary.
This message was echoed by comparison website Moneysupermarket.com which said customers could vote with their feet and move to another bank if they were unhappy.
It described the OFT's climb down as 'inevitable' but said it was not all bad news.
Kevin Mountford, of the website, said the OFT's campaign had in itself forced banks to cut their charges. Therefore millions of customers would benefit in the future.
He added: "For those who are still trying to reclaim charges the OFT has left the door open for them to take the banks to the Financial Ombudsman and no doubt some will choose to pursue this, but many are likely to quietly drop their complaints.
The British Bankers' Association (BBA) welcomed the end of the investigation. It said it would work with the OFT in relation to the concerns it has raised.