Frozen Overdraft Claims Revealed

[Injin]

http://news.bbc.co.uk/1/hi/business/7880745.stm

It has been revealed that at least 65,000 people have had their claims for the return of overdraft charges frozen in the court system.

The figures, obtained from the Ministry of Justice, have been made public by campaigners for the first time.

The legal claims were halted in July 2007 by a general stay on overdraft cases, imposed by county court judges.

The stay was part of a wider agreement to allow a High Court test case to decide if bank overdraft fees are fair.

Litigation

A year and a half since the 2007 agreement, the High Court litigation, agreed between eight banks and the Office of Fair Trading (OFT), is still running.

The figures on the number of frozen cases, as of last November, were supplied to the campaign group Legal Beagles by the Ministry of Justice (MoJ).

A spokesman for the group, Julian Siddle, said the litigation agreement, which also allows banks to defer dealing with complaints made directly to them, was very one-sided.

"People are still incurring charges even though banks have obtained a waiver, so they don't have to deal with new complaints," he said.

A decision is expected soon on an appeal by the banks, who have objected to last year's initial High Court ruling that the OFT had the authority to decide if their charges were fair or not, under the consumer contract regulations.

But the second stage of the overall test case, on the main issue of whether or not the banks' charges are in fact fair, has yet to start.

Cases stayed

Until the summer of 2007, the UK's main banks had been besieged by an unprecedented consumer revolt.

Hundreds of thousands of disgruntled customers were suing their banks in the county courts, usually successfully, for the return of the overdraft fees they regarded as excessive and unfair.

In most cases the banks gave in to these claims, preferring to refund £784m to an estimated 378,000 customers in 2007, rather than run the risk of adverse judgements in any courts.

But the stay, a policy that has been agreed by individual county court judges, meant that unresolved and new cases were put on hold until a final High Court ruling.

"Pending the final outcome of this matter, the management of individual cases in the county courts is a matter for county court judges to consider based upon the circumstances of each individual case," said an MoJ spokesman.

"However, at the hearing in May last year, Mr Justice Andrew Smith confirmed that the reasons behind the original stay on such proceedings continue to apply, at least until the disposal of the appeal."

Piling up

Nick Spooner of Legal Beagles said many other cases, lodged with the Financial Ombudsman Service (FOS), were also on hold.

And the MoJ figures were, in his view, probably an underestimate.

"The 65,000 figure only applies to the cases which the MoJ was absolutely sure related to claims against banks for the return of overdraft charges," he said.

"There are others that the MoJ couldn't pick up when searching its data base, because of the different ways in which people had written their claims.

"Meanwhile thousands more claims are piling up with the banks themselves," he added.

The OFT has estimated that in 2006 12.5 million people paid some sort of overdraft charge.

Will the bankers still have the polical juice to not pay these claims?

[DEATH]

It is amazing that some 10 million a year get these charges but only 65,000 of the buggers have ever done something

about it to get them back.

[Guest eight]

It is amazing that some 10 million a year get these charges but only 65,000 of the buggers have ever done something

about it to get them back.

It's amazing that the charges never bounce due to lack of available funds.....

If the banks are so confident of these charges, why don't they invoice the customer and allow them to choose to pay or not (with possible recourse to the courts by the banks themselves) rather than just helping themselves to people's hard-earned?

eight

[Bloo Loo]

It's amazing that the charges never bounce due to lack of available funds.....

If the banks are so confident of these charges, why don't they invoice the customer and allow them to choose to pay or not (with possible recourse to the courts by the banks themselves) rather than just helping themselves to people's hard-earned?

eight

absolutely correct.

This is the banks dipping into your account without a by your leave...and the reason they do it is because YOU HAVE NO FUNDS....so they ensure you have even less!!!

helpful, these bankers...and that includes Natwest.

[Pindar]

absolutely correct.

This is the banks dipping into your account without a by your leave...and the reason they do it is because YOU HAVE NO FUNDS....so they ensure you have even less!!!

helpful, these bankers...and that includes Natwest.

And to think their advertising slogan used to be "Natwest, we're here to make life easier..."

British banks are nothing more than common thieves.

Edited February 11, 2009 by Mouse

[6538]

It is amazing that some 10 million a year get these charges but only 65,000 of the buggers have ever done something

about it to get them back.

There are far more people who have done something about it. These are only cases which were stayed when the High Court case was started. There were loads of people who got money back before that point due to the banks either simply just paying up or by getting judgements in default because the bank never defended the case.

[SNACR]

My guess is the courts will conveniently rule there can be no further retrospective claims for bank charges and the govt will annouce some new legislation to clamp down on them.

Loads of people won't have claimed for fear of upsetting the bank now the house has been repo'd they'll be more than willing to go after the bank for the charges. As the economy slides further into the abyss it will degenerate into and unseemly blizzard of litigation with neither the claimant or defendant having the funds to support it.

I want to say get a job as a litigation solicitor, but I doubt they'll get paid either at some point.

[SarahBell]

You can now claim that your loan is an Unenforceable Loan - presumably this clears the debt from that

And writing off credit card debt is getting popular.

Borrow and then don't pay it back. That's the nulabour way.

[Cogs]

absolutely correct.

This is the banks dipping into your account without a by your leave...and the reason they do it is because YOU HAVE NO FUNDS....so they ensure you have even less!!!

helpful, these bankers...and that includes Natwest.

I know there are arguments for overdrafts, but it has always been this specific element of it that I object to. They are using privileged access to your funds to enforce payment of a debt, which nobody else can do. They should write a letter demanding payment like anyone else. Which in turn would mean they'd stop offering overdrafts. Which would be a good idea in any case. The only time I've ever used an overdraft facility was when I was billed in error for something. It would have been better if the bank had just refused payment.

Edited February 11, 2009 by Cogs

[cht]

The bank wrote to me in January and demanded I contact them or they would cancel my overdraft facility. I never asked for it and never use it. Why would they want me to contact them and why don't they just cancel the facility and send me a letter to this effect?