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The appeal hangs in the balance
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OFT and Banks back in Court
Writes Dan Drage dan.drage@consumerchoices.co.uk
Round two in the unfair overdraft charges test case kicks off today, with the banks likely to appeal against last month’s outcome.
Five weeks ago, the high court ruled in favour of the OFT, providing them with a gateway for investigating the legitimacy of unauthorised overdraft fees and cheque bouncing penalties.
Both parties will return to the courtroom today for a case management meeting. The timetable for the next steps will be set, and either party is allowed the right to appeal against the original ruling.
The meeting, typically around one or two hours in duration, is expected to run over into Friday due to the convoluted nature of this case.
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"In the current climate, with banks desperately trying to claw back every penny they can, they will not yield on this issue until there really is no alternative"
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Should the banks appeal; the case will be referred to the Appeal Court and the House of Lords before the full case goes to court. This would delay the court date by approximately two years.
Without an appeal by the banks, the OFT is clear to judge whether unauthorised borrowing fees are unfair. If, as expected, they decide these fees are unreasonably high, the OFT are additionally afforded the right to set a more suitable alternative.
Chris Eagle, Commercial Manager at Credit Choices, has a hunch:
‘I think the banks will string this out for as long as possible, hence an appeal is a stonewall certainty’
He continues:
‘In the current climate, with banks desperately trying to claw back every penny they can, they will not yield on this issue until there really is no alternative. Also, a two year gap would give them ample time to devise contingency plans.’
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