You arrived at this page by selecting:Bank Charges — Consumers still have rights to challenge (03/12/09)
You may have heard on the news about the bank charges saga. It has been going on for some time and lots of people have been waiting for the final decision from the Supreme Court.
The Supreme Court overturned rulings in the High Court and Court of Appeal that bank charges were subject to fairness rules, under a particular regulation of the Unfair Terms in Consumer Contract Regulations (UTCCR). The Office of Fair Trading (OFT) has also lost its argument that it can assess charges for fairness on the this legal principle.
To explain, if something is deemed as unfair in a consumer contract then you can challenge to have it crossed out. Such as something in the small print for example. Lots of people and the OFT thought that these charges were unfair. However when it comes to a price of something it changes things slightly. You cannot agree to a price in a contract and then change your mind about it afterwards when you are charged it. The bank charges were considered part of the price of the agreement therefore they cannot be challenged on this price being unfair.
Regarding the OFT, their statute allows them to get involved and have power over certain things only. They do not have the power to get involved in anything they wish. Assessing charges for fairness under this particular principle was deemed something they did not have the power to get involved in.
So does that mean that all is lost for those people who deem the banks to be unfair? Well I don't think so actually. It only means that you cannot challenge the banks on this particular point regarding their charges being unfair and the OFT cannot act on behalf of the nation.
There are other options to challenge on different grounds. There is now talk of challenging under Regulation 5. These grounds relate to fees being agreed between both parties in good faith without causing a significant imbalance in the parties rights and obligations to the detriment of the consumer.
Challenges are open to individuals as well as the OFT for that matter. We individuals are not bound to large bodies like the OFT to do our challenging for us. Sometimes I think it can work against us. We are quite within our rights to challenge anybody ourselves if we so wish it. I don't think people should be put off making as many challenges as they feel they should when they believe something is unjust.
Of course the easier option in this would be for us all to manage our finances carefully enough to ensure that we don't get stung with these charges. Easier said than done. But after all this publicity I don't think anyone can claim they don't know about them.
By John Wilson
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