| OFT criticises banks for rewriting contracts |
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| Wednesday, 30 January 2008 | |
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Office of Fair Trading (OFT) QC Brian Doctor argued bank charges were unreasonable in the High Court on Tuesday.
Addressing the court on the eighth day of the momentous test case, Doctor said banks used a “strange language” to pretend their overdraft charges were fair. The case, involving Barclays, Abbey, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and Nationwide Building Society, commenced on January 17 with the banks denying charges of up to £38 on overdrawn accounts were unwarranted. Doctor accused some banks of rewriting contracts in the last year to stay clear from the 1999 unfair terms in consumer contracts regulations. Criminal offences The banks deny the claims and maintain the charges were in return for a service and therefore, the regulations were not applicable. The lenders’ barristers previously told the court that customers received a number of services and therefore where charged a group of prices. Doctor accused the bank’s QCs, however, of trying to “cast a spell” on the court. Last week, Barclays QC Iain Milligan refuted accusations made by the OFT that the way banks rewrite their terms and conditions, encouraged customers to commit criminal offences by knowingly writing cheques that went beyond their funds. Earlier in the trial, Laurence Rabinowitz QC blamed the OFT for encouraging a surge of litigation against the banks. Refund Originally scheduled for eight days, the case is expected to last for at least another week to give the lenders an opportunity to respond to Doctor’s arguments. If the OFT win the case, it could result in banks and building societies having to refund billions of pounds, as a result of charges customers over the past six years. No matter what the verdict, the losing side is expected to appeal, which could see the trial being taken to the House of Lords and not finalised until next year. Related articles
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