Latest Articles

Supreme Court Rules Against OFT in Bank Charges Litigation (January 2010)

On 25th November 2009, in Office of Fair Trading v. Abbey National plc and others the Supreme Court dealt a blow to consumers seeking to challenge their bank's fixed charges for use of unauthorised overdrafts, returned payments and other similar services.

Allowing the banks' appeal against the decision of the Court of Appeal, the Supreme Court held that it was not open to the OFT to investigate the fairness of the level of the banks' fixed fees for the services referred to above.

Lords Phillips, Walker, Mance, and Neuberger and Baroness Hale unanimously held that the level of the fees in question are covered by Regulation 6(2)(b) of the Unfair Terms in Consumer Contracts Regulations 1999, which provides that the assessment of the fairness of a term in a contract "shall not relate ...to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."

Effectively, this means that the level of the charges cannot be used as a factor for determining their fairness.

It remains to be seen whether the OFT will seek to challenge whether it is fair for the banks to impose any charge for the relevant services.

Print this article