Expert: Banking customers feel freeze

Fri, 31 Aug 2007

Banking customers who are hoping to claim money back from charges and penalties imposed by their banks and financial lenders will have to wait to see the outcome of a current high court case.

The Office of Fair Trading has launched a test case against high street banks which will be resolved in January next year, in the meantime the Financial Services Ombudsman and the Financial Services Authority have frozen any cases they were dealing with.

According to uSwitch.com, £713 million worth of claims were being dealt with and as a result of the freeze the banks will accrue a further £20.5 million in interest until the case is resolved.

Personal financial expert for uSwitch.com Mike Naylor states that the Office of Fair Trading's current test case could extend past the current account sector.

"The outcome of this battle will establish a clear benchmark for the banking industry on the legality of penalty charges and we hope that the same principles will then be applied to penalty fees for other financial products such as mortgages," he comments.

Abbey have released a statement in response to these figures, calling the survey "nonsense".

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