Supreme Court rules against OFT on bank charges

Thursday, November 26th 2009

The Supreme Court has ruled against the Office of Fair Trading (OFT) over whether it can investigate the fairness of bank charges.

In its ruling yesterday (November 25th), the court said that the OFT should not be able to assess the value for money offered by bank charges as the Consumer Contracts Regulations 1999 state that an assessment of fairness should not be linked to whether the price is adequate compared with the services offered in exchange.

Despite this, Lord Phillips said that it may be possible for the OFT to look at the fairness of bank charges - which primarily relate to fees for the unauthorised use of overdrafts - under other criteria.

The OFT said it was disappointed by the ruling and that it will further consider the details of the judgement before deciding whether to pursue its investigation into bank charges.

Meanwhile, Adam Phillips, chairman of the Financial Services Consumer Panel, said banks should work with the OFT and Financial Services Authority to come up with a fair way of resolving the issue.

"Consumers have been left in the lurch with complaints about bank charges for long enough," he commented.