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| Version 1 | Version 2 |
|---|---|
| Judge calls halt to bank charges | Judge calls halt to bank charges |
| (about 1 hour later) | |
| A judge has stopped Barclays bank taking any more penalty charges and interest from a customer who sued for their return. | A judge has stopped Barclays bank taking any more penalty charges and interest from a customer who sued for their return. |
| Judge Abrahams, at Luton County Court, has ordered Barclays to stop applying the charges until a High Court test case settles the legal issues involved. | Judge Abrahams, at Luton County Court, has ordered Barclays to stop applying the charges until a High Court test case settles the legal issues involved. |
| Barclays said it will be entitled to reclaim any further charges from Nadine Fry should the test case be successful. | Barclays said it will be entitled to reclaim any further charges from Nadine Fry should the test case be successful. |
| The five main banks have handed back almost £400m in charges since January. | The five main banks have handed back almost £400m in charges since January. |
| Barclays itself has so far repaid £87m in overdraft charges this year. | Barclays itself has so far repaid £87m in overdraft charges this year. |
| The judge suspended Ms Fry's claim until the outcome of the test case. | |
| John Fry, who pursued the case for his daughter, explained how he persuaded the judge also to suspend any further penalty charges. | |
| "I argued that a stay would have serious financial implications for my daughter as she would have to continue meeting interest payments on her debts, whereas the sum in question (£1,384) would have been sufficient to clear her debt entirely," he said. | |
| 'Not general policy' | 'Not general policy' |
| Judge Abraham's decision is likely to be deeply disturbing to the UK's banks, in case other judges around the country adopt a similar line. | Judge Abraham's decision is likely to be deeply disturbing to the UK's banks, in case other judges around the country adopt a similar line. |
| Luton county court's order against Barclays bank | Luton county court's order against Barclays bank |
| A spokesman for the Judicial Communications Office (JCO), which speaks on behalf of judges, said: "This is not a general policy - each case is assessed on its own merits." | A spokesman for the Judicial Communications Office (JCO), which speaks on behalf of judges, said: "This is not a general policy - each case is assessed on its own merits." |
| In the past year, tens of thousands of bank customers have been winning refunds of overdraft penalty charges from their banks, amounting to millions of pounds. | In the past year, tens of thousands of bank customers have been winning refunds of overdraft penalty charges from their banks, amounting to millions of pounds. |
| To resolve this vexed issue, the banks, along with the Office of Fair Trading (OFT), agreed at the end of July to stage in the High Court next year a test case on the legality of the charges. | To resolve this vexed issue, the banks, along with the Office of Fair Trading (OFT), agreed at the end of July to stage in the High Court next year a test case on the legality of the charges. |
| The OFT believes they are an unfair and illegal penalty under consumer protection regulations. | The OFT believes they are an unfair and illegal penalty under consumer protection regulations. |
| The banks say they are a fair charge for providing a service to their customers while their accounts are in the red. | The banks say they are a fair charge for providing a service to their customers while their accounts are in the red. |
| Waiver win | Waiver win |
| At the same time as announcing the test case, the banks won from the Financial Services Authority (FSA) a waiver from the current rules so that they can largely stop processing new claims against them until the legal issues are sorted out. | At the same time as announcing the test case, the banks won from the Financial Services Authority (FSA) a waiver from the current rules so that they can largely stop processing new claims against them until the legal issues are sorted out. |
| Likewise, the Financial Ombudsman Service (FOS) decided to stop dealing with the thousands of similar complaints it has been receiving. | Likewise, the Financial Ombudsman Service (FOS) decided to stop dealing with the thousands of similar complaints it has been receiving. |
| The banks also asked the courts to suspend all existing legal actions against them for the time being. | The banks also asked the courts to suspend all existing legal actions against them for the time being. |
| However, any decisions on cases that are already before the courts have been left up to local judges to decide. | However, any decisions on cases that are already before the courts have been left up to local judges to decide. |
| Marc Gander of the Consumer Action Group said the Luton judge's decision was both just and encouraging. | |
| "This is what should have been done from the start to maintain fair play." | |
| "This waiver adopted by the FSA and the Ombudsman has been profoundly unjust because it is so one-sided," he said. |