Banks face court action

The competition watchdog has revealed plans to take the major banks to court over their unauthorised overdraft charges.The Office of Fair Trading will launch a test case in the High Court later to try to establish that the high charges are unfair.Tens of thousands of consumers have complained about the charges and many have already taken their bank to court.The OFT said: "The OFT considers that a quick determination of this point of principle will assist in securing a clear orderly resolution of the fairness of these charges."It added that it had decided to take action after being unable to secure voluntary compliance.The test case will involve Abbey National, Barclays, Clydesdale, the HBOS group which includes Halifax, HSBC, Lloyds TSB, the Royal Bank of Scotland Group which includes NatWest and Nationwide Building Society.Together these banks account for around 90% of the current account market in the UK.The British Bankers' Association said the banks were working with the OFT and City watchdog the Financial Services Authority to ask the UK courts to clarify the legal position regarding overdraft fees.But it added that the banks still believed the fees for unauthorised overdraft charges were clear and fair.© Independent Television News Limited 2007. All rights reserved.

ITN | July 26, 2007

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