Banks Face Overdraft Legal Challenge
The High Court is being called upon to issue a "declaration" that bank charges are illegal.
Stephen Hone, law student from Plymouth, Devon and member of the anti-charges Bank Action Group, has issued a writ against eight high street banks, including NatWest, HSBC and Halifax Bank.
He argues that bank charges for unauthorised overdrafts and bounced cheques are excessive and not related to the actual costs of unauthorised borrowing.
If Mr Hone's case is successful, banks could be prevented from levying such charges against customers, with borrowers then able to back date compensation claims for the past six years, the Guardian reports.
Banks typically charge around £38 for a bounced cheque or unauthorised overdraft and it is estimated that the fines net the banks around £3 billion every year.
Mr Hone has already successfully sued Abbey National for levying a £32 overdraft fine against him. He won by default after Abbey declined to defend the charge.
Stephen Hone, law student from Plymouth, Devon and member of the anti-charges Bank Action Group, has issued a writ against eight high street banks, including NatWest, HSBC and Halifax Bank.
He argues that bank charges for unauthorised overdrafts and bounced cheques are excessive and not related to the actual costs of unauthorised borrowing.
If Mr Hone's case is successful, banks could be prevented from levying such charges against customers, with borrowers then able to back date compensation claims for the past six years, the Guardian reports.
Banks typically charge around £38 for a bounced cheque or unauthorised overdraft and it is estimated that the fines net the banks around £3 billion every year.
Mr Hone has already successfully sued Abbey National for levying a £32 overdraft fine against him. He won by default after Abbey declined to defend the charge.
posted by Your Friends @ Myvesta.org.uk at
2/22/2006 10:29:00 pm
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