OFT drops bank charges investigation
OFT drops bank charges investigation
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Tuesday, 22, Dec 2009 12:17
By Richard James.
The Office of Fair Trading (OFT) has announced it is to drop its investigation into the use of bank overdraft charges.
Last month the newly-created supreme court ruled the issue did not come under the OFT's remit.
The regulator said on Tuesday it still had "significant concerns" about the way banks continue to operate current accounts.
There has been widespread public anger at the way in which high streets banks charge customers for going overdrawn.
Many have attempted to seek compensation or refunds, but over a million such claims have been put on hold since July 2007 and are now likely to be rejected.
In a statement, the regulator said: "The OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations (UTCCRs) would have a very limited scope and low prospects of success.
"Given this, it has decided against taking forward such an investigation."
The watchdog went on to say: "The OFT nevertheless continues to have significant concerns about the operation of the market for personal current accounts.
"Despite some recent and planned improvements by banks, particularly around transparency and customer switching, it believes fundamental changes are still required for the market to work in the best interests of bank customers."
Customers who go into authorised overdrafts or breach their agreed limit can be charged as much as £35 for a single bounced payment.
Campaign groups claim the actual cost to the banks stands at £2.50 and they generate around £2.6 billion of revenue every year from the charges.