Regulator drops case on bank overdraft charges

(23/12/09)

The Office of Fair Trading (OFT) has dropped its investigation into bank overdraft charges, following a recent Supreme Court ruling.

In November, the Court ruled in favour of the UK's high street banks in an ongoing row concerning the 'fairness' of the overdraft fees levied on customers.

Over one million refund claims have been put on hold since July 2007, pending the investigation, and the majority of these are likely to be rejected.

The OFT has stated that any further investigation into the fairness of current unarranged overdraft charging terms 'would have a very limited scope and low prospects of success'.

Overdrawn customers pay bank charges of £2.6bn every year, representing a third of the income generated by running current accounts.

However, the OFT is calling for 'significant changes' to unarranged overdraft charges, either through voluntary agreement with the banks, or if necessary through changes in the law.