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Here is some good news for all of those current account customers trying to get their bank to refund unauthorised overdraft charges.


A legal test case that caused bank charges complaints to be thrown out of the courts has been settled.

The case, which we revealed a week ago in Money Mail, was against Lloyds TSB brought by a customer trying to reclaim thousands of pounds of bank charges and was scheduled to be heard by London Mercantile Court.

This would have provided grounds for a precedent that other similar bank charges cases being heard by the small claims court could have followed. As a result many were thrown out or stalled.

However, after a chat with a spokesman for Lloyds TSB I discover that they have now paid back the dipsuted charges. She says that Lloyds had not been aware that its legal argument was being considered as a test case.

The case passed on from the small claims court to the higher Mercantile Court because it had been so technical.

This had alerted other regional courts where judges had decided to put claims to refund bank charges on hold.

However, after the case had been transferred to the Mercantile Court it was settled by Lloyds. Now all the other cases that had been delayed by judges have been . Many have now been settled by the banks.

It means that no bank has yet defended a court claim from a customer seeking to have bank charges refunded.

I passed this good news on to Marc Gander, from bank charges website Consumer Action Group. This group has done some sterling work in helping current account customers understand their legal rights when it comes to unauthorised charges.

Mr Gander says: 'I think that this goes to show that the banks really don't want to go to court and are in disarray.'

And he could well be right. During our campaign Fair Play on Charges we have entered into a bit of a circular conversation with banks.

Every time I ask them about charges they reply that they are part of the terms and conditions of the account. But that doesn't mean they are fair, I reply. That doesn't mean that they reflect the true cost of operating the unauthorised overdraft.

And you can guess what the response is. 'They are part of the terms and conditions of the account.'

And so it goes on. I'm sure you'll be hearing plenty more on this from me....

James Coney, Money Mail