The newly appointed Supreme Court has given their long awaited decision today on 'unfair bank charges', causing a severe blow to an estimated 1.2 million people who have lodged claims.
In July 2007, all claims for refunds on unfair bank charges were put on hold (unless the claim involved financial hardship) until the test case determined whether the bank charges were fair and legal.
For many, this tribulation has put them in increasing credit problems, with some consumers looking for bad credit loans to help them pay for day-to-day expenses until this matter is resolved.
"The system of putting the claims on hold was originally installed as a temporary measure" said a spokesperson for Credit Problems No Problem.
"We have seen an increase in the number of customers looking for personal loans which have no penalty for settling the account early in anticipation of getting their bank charges refunded".
After losing before both the High Court and the Appeal Court, the banking industry took the case to the House of Lords.
Lord Phillips, president of the Supreme Court broadcast the unanimous ruling "that the relevant charges are charges that require customers to agree to pay as part of the price or remuneration for the package of services that they agree to supply in exchange"
In an attempt to add a positive note to this frustrating outcome, Lord Phillips added: "This will not close the door on the OFT's investigations and may well not resolve the myriad cases that are currently stayed [put on hold] in which customers have challenged the relevant charges".
"Banks have been able to charge large fees for their unarranged services, but this era was thought to be coming to an end" states a spokesperson for Credit Problems No Problem http://www.creditproblemsnoproblem.co.uk
"However, this ruling suggests the banks can charge what they like for unauthorised overdrafts which may now have implications in other areas of personal finance".
In 2007 the UK's banks refunded around ?784 million to almost 378,000 customers, helping many out of credit problems and avoiding their need for a loan.
Since then the Financial Services Authority put 1.2 million claims on hold, but the Financial Ombudsman Service has received over 10,000 complaints from consumers who claim to not have enough money for living expenses, yet their bank is refusing to consider refunding them.
After investigation, the Financial Ombudsman Service decided that around half of these cases involved financial hardship, and the Office of Fair Trading (OFT) has contacted the banks to make them aware they are breaking the rules in each case.
"We are being approached by people who are after bad credit loans to help them cover charges they had not been refunded for, but can't or no longer want to approach their bank for help with their credit problems" states Credit Problems No Problem
Ahead of the Supreme Courts decision on whether the Office of Fair Trading (OFT) can regulate the bank charges, some banks decided to implemented changes.
A study by the European Commission in 2009 showed that many people are unaware of their account's interest rate or what they pay in charges.
As a direct result of this lack of consumer awareness, only 9% of EU consumers switched accounts in 2007 and 2008, compared with 25% of car insurance customers.
In response to this the banks have now agreed a new system, thought to be integrated by 2011, where they will issue an annual summary to explain how much interest a customer has earned and a breakdown of fees which were charged for services such as overdrafts.
This will allow people to compare services and benefits, making it easing for them to find a better deal and possibly switch provider.
The decision handed down by the new Supreme Court today almost two and a half years since the enquiry began, is thought to be a disaster for thousands of families who were relying on a possible return of many hundreds of pounds of refunded charges for the run up to Christmas.
Credit Problems No Problem http://www.creditproblemsnoproblem.co.uk/ccj_loans.html helps out people who fear they have been blacklisted because of CCJ's and Defaults.
Credit Problems No Problem holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.
Credit Problems No Problem is also registered with the Information Commissioner's Office for Data Protection.
For rapid help, phone 08004125634 or visit
http://www.creditproblemsnoproblem.co.uk/bad_credit_loans.html
Notes for Editor:
http://www.creditproblemsnoproblem.co.uk
Credit Problems No Problem Ltd
Queensgate House
Exeter
EX4 3SR
United Kingdom
Tel: 0800 412 5634
Credit Problems No Problem was formed in 2003, bringing together a team of specialists that together offers 29 years of expertise to help applicants gain the unsecured loans they need.
From its UK head office in Devon, Credit Problems No Problem operates across Britain, sourcing loans for people with bad credit.
Credit Problems No Problem holds a Consumer Credit Licence issued by the Office of Fair Trading. The company is also covered by the Financial Ombudsman.
Credit Problems No Problem is also registered with the Information Commissioner's Office for Data Protection.
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