Lawfuel – The Law News Wire – The Financial times reports that this morning, Tom Brennan, a recently qualified barrister, will be back in court, fighting the latest round in the increasingly high-profile legal battle between banks and their customers over overdraft charges.
Mr Brennan’s grievance centres on the extent of the charges – totalling more than £2,000 – which were taken from his account with NatWest after he went into the red and then exceeded an overdraft limit while a law student.
That broad complaint, about the level of charging, is shared with thousands of other bank customers. Spurred on by consumer groups, they have also registered complaints and/or filed legal claims. As a result, small claims courts, up and down the country, are stuffed with these actions.
But while many consumers have subsequently accepted settlement offers from their banks (usually involving repayment of the charges without admission of liability), Mr Brennan believes there are issues which should be given to a judge to decide. Natwest, on the other hand, says that it has more than satisfied Mr Brennan’s claim by fully repaying the charges. It wants the judge to throw his case out.
In one respect, the omens for Mr Brennan – and other consumers who would like a judicial ruling on the fairness of overdraft charging – do not look good. The only case to find its way to a courtroom so far was decided last week in favour of the banks.
This involved a Lloyds TSB customer, Kevin Berwick, who represented himself in the proceedings in Birmingham County Court. There, he argued, the level of overdraft charges either breached the protections that governments have put in place against unfair contract terms, or failed to comply with the “reasonableness” criterion required for service fees under the Supply and Services Act 1982.