Wednesday 9th July 2008
Historic contracts are the latest element to be considered by the high court as it continues to address the legality of bank charges, according to the BBC.
The hearing represents the second stage of the legal process, being presided over by Judge Mr Andrew Justice Smith.
Previously, he ruled that the Office of Fair Trading (OFT) should be permitted to decide whether charges for unauthorised overdrafts on current accounts are legal.
As a result, the market watchdog may be able to refund any charges made under contracts currently operational between financial services providers in the UK and their customers.
The BBC notes that this equates to around £3.5 billion each year for the eight major banks opposing the ruling.
Now Judge Smith is to consider historic contracts - which could see the OFTs jurisdiction extended to allow refunds to be made against accounts which are no longer active.
Under the terms by which the test case was brought into the courts, the OFT may be able to refund individual charges of up to £35 each.
The BBC adds that the eight defending banks represent about 90 per cent of all accounts currently active in the UK.
Following the high courts previous ruling in April, the OFT asserted that it would work with the eight banks to decide the appropriate course of action to ensure the changing financial services market continued to serve customers well.
The organisation pointed out that the verdict did not include any ruling as to whether overdraft charges themselves are unfair, but referred only to "points of legal principle".
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