| Banking charges are now integral to our business and | | | | agreement and not penalties for breach of a |
| personal accounts; recently however the banking | | | | contract, the banking industry cannot be held |
| industry has been facing court cases on the fairness | | | | accountable, and subsequently should not have to |
| of some bank charges. | | | | refund charges. |
| There are many in the business world that believe | | | | The decision will affect personal account holders |
| the banking charges put in place by many banks are | | | | more so than those with business accounts. The |
| unrepresentative and therefore should be scrapped. | | | | outcome of the ongoing investigation is set to |
| One argument has highlighted the overdraft as vital | | | | revolutionise the current account market within the |
| to many people's personal and business banking | | | | UK; both sides, the Banking industry and the OFT are |
| needs and to charge unfairly for it is not just immoral | | | | standing firm on their positions and hence the hearing |
| but bordering upon illegal. | | | | is likely to go on for some time. |
| A High Court hearing is looking into allegations that | | | | It has originally been scheduled to last for eight days |
| the banking industry is acting illegally and has come to | | | | but this figure is wholly unrealistic. The huge volume |
| the conclusion that providing customers with credit | | | | of evidence will delay the case further, while a |
| was a substantial element to business and personal | | | | decision is expected around Easter time the appeal |
| account services. | | | | process is likely to continue for at least another year. |
| The whole debit and cheque cashing business would | | | | Some personal and account holders have actually |
| come to a halt without account credit and hence the | | | | been recorded as saying that they are actually |
| consumer economy would suffer greatly. The banks | | | | contented with the current system of charges. Only |
| argue that if they did not honour customer debit | | | | being charged for being in the red is seen by many |
| payments and then charge accordingly, purchasing | | | | as ideal; overdraft charges can be viewed as |
| would take a backward step to hard currency | | | | payment for an entire collection of services provided |
| payments once again. | | | | by the banking industry not as penalties for entering |
| This is the fundamental argument of the banking | | | | the red. |
| industry; they believe these credit charges are | | | | This can however be seen as a bi-polar argument as |
| perfectly legal as they are classified as banking fees | | | | there will always be a split of account holders in |
| rather than penalties. It may seem an argument | | | | credit and in their overdrafts. For those in credit, |
| based purely upon the different use of language, but | | | | paying fees for going overdrawn is not an issue |
| when lawyers are concerned arguing vocabulary | | | | whereas those who are constantly on the |
| differences may make or break a case. | | | | subsistence level will see overdraft charges as unfair. |
| The Office of Fair Trading (OFT) has waded into the | | | | Depending upon which argument the High court |
| case and demanded that business and personal | | | | decides to follow will have major repercussions. If the |
| account charges be reigned in, the High Court | | | | OFT's argument is upheld the banking industry will be |
| however has come to another conclusion. | | | | forced to refund billions of pounds worth of penalty |
| The High Court has concluded that the arguments on | | | | charges. This may seem a positive for consumers but |
| both sides depend upon one factor. This factor is the | | | | this outcome is unlikely to be of financial gain for |
| contract signed when opening a business or personal | | | | account holders. If banks are forced to repay |
| account. The High Court has stated that as long as | | | | charges it will surely result in increased contractual |
| the payments are for services within the contractual | | | | charges and the end of free banking services. |