Originally the case which begain on January 17th was expected to take 8 days. Now though, due to the large amount of material that needs to be considered by the court, its expected to last well into February.

The purpose of the court case is to ascertain whether or not the ‘Unfair Terms in Consumer Contracts Regulations’ (UTCCRS) apply to unauthorised overdraft charges.

The banks involved in the case are: Barclays, Abbey, Clydesdale, HBOS, HSBC, Lloyds TSB, Royal Bank of Scotland and the Nationwide Building Society.

We were struggling to make payments and there were late payment fees and bank charges that crippled us. John said there was only one way out and that was to fake his own death. I pleaded with him not to do it, I said it was the wrong thing to do. I didn’t know what he’d planned or for when.

Mr Darwin was today charged with 2 offences of deception; making an untrue statement to obtain a passport and offences relating to insurance fraud.

The OFT is currenly embroiled in a test with the UKs 8th largest banks to assertain the legailty of the charges banks imposed breach their contract, such as going overdrawn.

The British bankers Association though has warned that if the banks loss this case banks could imposed yearly service charges as well as transactional fees, as many banks do abroad.

(Banks) could follow patterns abroad where banks charge for transactions such as ATM usage, direct debits and standing orders, in addition to an annual fee” if the courts ruled in the OFT’s favour.

The OFT though are less than impressed by the suggestion,

There’s no excuse for the £300 charge. It would raise between six and 10 times the amount the penalty fees cost consumers.

Many feel the release of the £300 figure is a ploy by the banks to get customers use to the idea of beieng charged for banking services, before reducing the actual amount customers would be charged if such a system were introduced.

The OFT has stated that if it wins the test case that this will not remove all bank charges across the board in the future, some of the charges banks imposed are fair in some cases.

UK banks still maintain that all the charges they currently imposed and have done so in the past are fair and just.

These charges are typically incurred when agreed overdrafts are exceeded or when cheques and direct debits bounce due to insufficent cleared funds. In 2006 the top 6 high street banks netted an estimated £4.5 billion in bank charges alone.

These charges amount to anything between £19 to £39 and are only increasing the amount of people who find themselves in debt which is slowly creating a society consumed by debt.

Under the Unfair Terms in Consumer Contracts Regulations (1999) all penalty charges have to truly reflect the cost of administration, which is approximatly £2.50 - £4.50. This has now sparked the National Housing Federstion to call for the removal of excess charges for those on low income who use basic accounts.”Bank charges have a disproportionate effect on people already on low incomes,” remarked Tony Herbert of Citizens’ Advice.

The investigation has just begun and it will be interestng to see the feedback from the people who have benefitted from such changes.

Now typically when this happens banks charge anywhere up to £35 for these breaches in contract but this is estimated to be way over what it actually costs them! BBC2 recently had a group of senior bank staff estimate the real costs and their projections came out at between £2.50 and £4.50.

All things considered this makes bank charges unfair and therefore unlawful. The banks do not have the right to charge this money and the worst thing is that they take it out of your account without your permission. Can you imagine if any other company did this, you would go through the roof but we seem to accept that it’s OK for banks to behave this way.

This same law and set of circumstances applies to credit cards too, by following the same steps laid out for bank charges you can reclaim any unfair charges on your credit cards too!