Banks defend current account charges

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Banks including HSBC have filed a formal defence of the accusations made by the Office of Fair Trading (OFT) that they impose unfair current account charges on their customers, it emerged this week.

The OFT is pursuing a test case in the high court to clarify the legal situation regarding penalty charges on current accounts.

Papers filed by the industry body assert that contractual terms which are not individually negotiated must not cause "a significant imbalance" in the duties of the bank "to the detriment of the consumer".

This is stated in the Unfair Terms in Consumer Contracts Regulations 1999, the OFT observes.

But the banks argue that contractual terms which are agreed with the customer should be enforceable.

HSBC explains: "The charges cannot be contrary to the requirement of good faith or unfair provided that the bank deals with the customer fairly and openly at the time of the conclusion of the contract."

And Angela Knight, chief executive of the British Bankers Association, adds that "the banks have always been firmly of the view that the fees they charge customers are fair and clear".

Meanwhile, some judges have been accused of misinterpreting the Financial Services Authoritys permission that complaints may be put on hold until the case is resolved.

While the ruling applies to current account charges only, some credit card complaints have also been frozen, it is claimed.

James Cook of Barclaycard tells the Times: "The problem is arising where customers go straight to the courts and judges mistakenly think the stay on claims applies to credit cards.

"We have even taken up customers cases and gone back to the courts to tell them that they have put a hold on a claim in error."

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