More may need debt consolidation following bank charges decision
More may need debt consolidation following bank charges decision
Wednesday 25th November 2009
The battle over bank charges labelled 'unfair' has been going on for years, with all new claims against banks being suspended in 2007 pending the result of an Office of Fair Trading legal case.
Today, the Supreme Court ruled that the Office of Fair Trading (OFT), a government body which supports consumers, should not make decisions on whether charges were fair or not.
The fate of more than a million claims against 'unfair' bank charges, mostly on customers who went into overdrafts without getting permission, rested on today's decision.
People who had been counting on today's ruling for financial reasons may now need to look for debt management plans, as some of the charge claims ran into thousands of pounds.
Debt consolidation loans are another way in which people might choose to put their finances in order following today's decision.
The president of the Supreme Court Lord Phillips explained the court's ruling this morning. He said that paying a charge for going into an overdraft without warning was the price which consumers paid for a current account for free.
However, campaigners hope that today's ruling will not be the end of the war over bank charges, as the OFT could still try to rule on other regulatory aspects of the fees.
Lord Phillips said in his statement: "This will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently stayed [on hold] in which customers have challenged the relevant charges."
Prime Minister Gordon Brown has previously called on banks to pay back the charges.
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