£100,000 fund will help bank customers fight unfair charges
- From: Robin T Cox <nomail@xxxxxxxxxx>
- Date: Wed, 30 May 2007 07:40:22 GMT
£100,000 fund will help bank customers fight unfair charges
By Helen McCormack
Published: 30 May 2007
Independent
http://news.independent.co.uk/uk/legal/article2594153.ece
Campaigners have pledged £100,000 for a fighting fund to encourage people
to launch legal challenges against what they say are illegal bank charges.
The money has been pledged by MoneySavingExpert.com and the Consumer
Action Group as well as private individuals.
It is hoped the funds can be used for claims that could set a legal
precedent in the fight against excessive overdraft charges. The move comes
after two county courts ruled against two customers of Lloyds TSB.
In the first, a district judge at Birmingham County Court dismissed a
claim Kevin Berwick brought against Lloyds TSB on the grounds that charges
were a legitimate part of the current account service and found that he
had failed to lodge sufficient evidence.
The ruling, on 15 May, led to concern that people would be deterred from
reclaiming fees levied by banks, which can be up to £38. Campaigners say
the real cost is £2.50 and argue that the fees are unlawful.
The second ruling, made against a claim for £3,000 brought by Julian Rudd,
came on 11 May but details only emerged on it last night. A judge at
Lancaster County Court also found Mr Rudd, a builder, had failed to state
an adequate claim.
The news of the second case came after Martin Lewis, the creator of
MoneySavingExpert.com, announced the fund. Speaking on the Berwick
decision, he said that although the ruling was not binding for other
courts, banks were using it to "scare people away from reclaiming".
Despite that, Mr Lewis said "hundreds" had received claims since the
ruling and urged customers to continue claiming and courts were "ignoring"
the Berwick ruling. "This case has no bearing in law and in practice sets
no precedent", he said.
Claims from customers have soared by 40 per cent in the past year,
according to the Financial Ombudsman. The Independent has been encouraging
the claims against the charges, which according to the consumer
organisation Which? are earning British banks £4.75bn from penalty fees a
year.
"This is a desperate attempt to scare people away and it is important that
we do not allow their spin and spiel to put people off," he said. "It is
almost laughable. In football parlance, the banks are crowing about the
fact that they are now only losing 100,000 to one and not 100,000 to nil.
I'd urge everyone who has already had a payout to act as reclaiming
ambassadors and persuade others to take up the gauntlet."
Anti-charges campaigners said that they would activate the legal fund if a
customer with a strong enough case that could set a precedent comes
forward. It would be held in a trust by the Govan Law Centre.
Marc Gander, the co-founder of the Consumer Action Group, said that
although most claimants were given refunds without going to court, it was
vital that cases that did end up in court were properly prepared.
"Those who do go to court usually win by default. Yet for the rare few
where the bank does put up a defence, the big lesson to learn is that even
where [the banks] don't show up in court, it is still worth doing proper
preparation."
Mr Berwick said: "It is important people understand that the bank had
already offered me a settlement before going to court. I decided I wanted
to go ahead".
The first high-profile case was brought by the barrister Tom Brennan. Mr
Brennan wants the High Court to award exemplary damages against NatWest
Bank for causing him practical and emotional hardship by charging him
£2,500 in fees during his legal training. A decision over whether his case
will proceed to trial is expected in weeks.
.
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