OFT and bank charges

Tuesday, 22, Dec 2009 10:26

After two years of legal struggles, the Office of Fair Trading (OFT) has given up its attempt to force banks to give up overdraft charges on current accounts through the courts.

Its decision came after the supreme court ruled on November 25th that banks were entitled to charge customers if they went into the red without prior arrangement.

The OFT's concerns about the bank charges remains, however. It is now planning to explore alternative avenues to persuade banks to give up the charges.

Bankers are hoping to persuade the watchdog that voluntary action will suffice. But with a third of banks' revenue on personal current accounts depending on overdraft charges it will be reluctant to abandon them completely.

In the last resort the OFT could persuade the government to legislate on the issue to get its way.