Overdraft fees court case
What is happening?
On 27 July 2007, the Office of Fair Trading (OFT) and 7 UK banks and a building society started a court case to decide on the legality of unarranged overdraft charges.
Full details of the announcement 
This case is being called a "test case" because the decision will clarify the law in this area and is likely to apply to all current and new claims against current account providers about unarranged overdraft charges.
The Financial Services Authority (FSA) has confirmed that it is extending its waiver regarding unarranged overdraft charges complaints until January 2009 – further details are provided below.
We will continue to post updates on our website to keep customers informed of progress on the test case.
What will happen to customer complaints about unarranged overdraft charges?
Most banks and building societies will not be dealing with or resolving customer complaints on unarranged overdraft charges while the test case is running.
If you do complain about your unarranged overdraft charges, we will write to tell you that we have received your complaint and that we will record it on your file. When a final decision is reached in the test case, we will contact you as soon as possible to tell you how we will resolve your complaint. We will apply the decision in the test case to all complaints we receive.
Why are the banks allowed to stop dealing with unarranged overdraft charges complaints during the test case?
In July 2007, the FSA granted HBOS, and other banks, a waiver of our obligations under the FSA's complaint handling rules regarding unarranged overdraft charges while we sought legal certainty about these fees. The waiver has been extended until January 2009 and is subject to a series of conditions designed to protect customers' rights.
The FSA's waiver direction can be found on their website: www.fsa.gov.uk
Can I make a court claim for a refund during the test case?
Yes, but we will apply to the court to put your case on hold while the test case is running. This is because the issues being raised in customer claims about unarranged overdraft charges are being considered in the test case.
Can I complain to the Financial Ombudsman Service about my overdraft charges?
The Financial Ombudsman Service (FOS) has decided not to review complaints about overdraft charges while the test case is running. If you do complain to FOS, they will respond to you confirming their position directly.
How long will the "test case" take?
It is not yet possible to confirm when the test case process will be concluded but the Banks are working closely with the OFT and the Court to bring a conclusion to the test case process as soon as possible.
Where can I find out more?
You can find more information from the following websites:
The Financial Service Authority: www.fsa.gov.uk
The Office of Fair Trading: www.oft.gov.uk
The Financial Ombudsman Service: www.financial-ombudsman.org.uk
You can also obtain a copy of a consumer fact sheet from the Financial Ombudsman Service website.
