Unarranged Overdraft Bank Charges Update
Update 13 January 2010
On 25 November 2009 the Supreme Court confirmed that the Banks’ unarranged overdraft charges are an important part of current account services which the Banks provide to their customers and that the amount of those charges is not assessable for fairness.
The Banks acknowledge the unanimous decision of the Supreme Court to allow their appeal in respect of these charges. We recognise this issue has been of real concern to a large number of our customers and we are pleased that this decision now brings clarity for all parties.
The Bank will work with the regulators to ensure that the outstanding customer complaints are brought to swift conclusion.
The Supreme Court judgment can be found at www.supremecourt.gov.uk
What will happen to customer complaints about unarranged overdraft charges?
During the test case, we agreed with the FSA and the Financial Ombudsman Service (FOS) that customer complaints relating to unarranged overdraft charge would remain on hold.
As the judgment concludes the test case, the FSA has agreed that these complaints should no longer remain on hold.
The Supreme Court ruling supports the Banks’ view that there are no valid grounds on which customers can rely in order to reclaim the unarranged overdraft charges that they have paid.
Airdrie Savings Bank has now issued letters to all those customers who had filed a complaint about unarranged overdrafts, advising that in view of this judgement the Bank is unwilling to refund the unarranged overdraft charges applied.
The Banks’ will be asking the County and Sheriff Courts to apply the Supreme Court judgment to dismiss any claims they currently have on hold.
What will happen to new customer complaints about unarranged overdraft charges?
As the judgment concludes the test case, the FSA has agreed that the waiver on bank charges complaints handling should be lifted. This means we will handle complaints through our standard process. We will continue to treat customers sympathetically who are financial hardship.
Can I complain to the Financial Ombudsman Service about my unarranged overdraft bank charges?
Yes. Where a customer’s complaint is not accepted by a bank, the customer has the right to take their compliant to the FOS.
Where can I find out more?
You can find more information through the following links:
The Financial Service Authority: www.fsa.gov.uk
The Office of Fair Trading: www.oft.gov.uk
The Financial Ombudsman Service: www.financial-ombudsman.org.uk
