Personal current account contract terms: unarranged overdraft charges

Office of Fair Trading (OFT) closed consumer enforcement case.

Case information

An investigation under the Unfair Terms in Consumer Contracts Regulations into the fairness of personal current account contract terms providing for unarranged overdraft charges.

In March 2007 the OFT the OFT opened an investigation into the fairness of certain charging terms relating to unarranged overdrafts under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCRs).

In July 2007 the OFT entered into a litigation agreement with eight PCA providers and commenced a test case to assist in securing a clear and orderly resolution of the fairness of these charges. Alongside this the investigation continued. The test case ultimately led to a Supreme Court judgment, dated 25 November 2009, which overturned previous High Court and Court of Appeal rulings that unarranged overdraft charging terms could be assessed in full for fairness.

In December 2009 the OFT set out the next steps for its PCA work. After detailed consideration of the judgment and of the various options available to it, the OFT concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the UTCCRs would have a very limited scope and low prospects of success. Given this, it decided against taking forward such an investigation.

OFT1154 - PCA unarranged overdraft charges decision document

Press release OFT announces decision and next steps on bank charges

22 December 2009

OFT announces investigation decision and next steps on bank charges.

Press release OFT announces decision and next steps on bank charges

25 November 2009

Judgment has been handed down by the Supreme Court in the test case on the application of the law in respect of unarranged overdraft charging terms.

Press release OFT announces decision and next steps on bank charges

18 November 2009

The Supreme Court judgment in relation to whether unarranged overdraft charging terms for personal current accounts can be assessed for fairness will be handed down on Wednesday 25 November at 9.45.

18 June 2009

There will be a hearing at the House of Lords at 10.30 on Tuesday 23 June that will last for three days. It will be held at the Houses of Parliament - St Stephen's Entrance, Committee Room 2A.

3 April 2009

OFT to focus investigation into unarranged overdraft charges on three banks.

Press release OFT to focus investigation into unarranged overdraft charges on three bank

26 February 2009

The OFT welcomes the Court of Appeal's very clear confirmation that the unarranged overdraft charging terms for personal current accounts can be assessed for fairness.

Press release OFT welcomes Court of Appeal judgment 

Court of Appeal judgment on bank charge test case (pdf 240 kb)

21 January 2009

The High Court judgment in relation to whether certain banks' historical charging terms are capable of amounting to penalties at common law is handed down.

5 December 2008

There will be a hearing at the High Court at 09:30 on 9 December to deal with further submissions from Abbey, Lloyds and RBSG relating to whether some of their historical charging terms are capable of amounting to penalties at common law.

9 October 2008

Judgment for the second preliminary hearing of the test case has been handed down in the High Court. The Judge has indicated that he will make a declaration that Banks' historic and other non-mainstream account unarranged overdraft charges can be assessed for fairness under the UTCCRs.

7 to 9 July 2008

The second preliminary hearing of the test case was held in the High Court.

23 May 2008

The OFT issues a statement on Case Management Conference.

Press release OFT statement on Case Management Conference

24 April 2008

Judgment has been handed down in the High Court test case on the application of the law in respect of unarranged overdraft charges.

Press release OFT welcomes High Court ruling on unarranged overdraft charges

8 February 2008

The test case hearing of the preliminary issues ended.

16 January 2008

The OFT's test case on unauthorised bank default charges will commence on Thursday 17 January at 10.30 at the International Dispute Resolution Centre. 

14 January 2008

The OFT’s application for a declaration on the law in respect of unauthorised overdraft charges is due to commence on Wednesday 16 January 2008.

Press release OFT test case on unauthorised overdraft charges - hearing commences in High Court

15 November 2007

The OFT has submitted to the High Court its reply to the banks defences and counterclaim in the forthcoming test case.

OFT's joint reply and defence to counterclaims (pdf 940kb)

Press release OFT publishes reply to banks defenceses

15 October 2007

The OFT has added to the original particulars of claim filed at the High Court in its proceedings for a declaration on the application of the law in respect of unauthorised overdraft charges.

Press release Statement: update on OFT test case

amended Particulars of Claim (pdf 278 kb)

31 August 2007

The OFT has today filed particulars of claim at the High Court in its proceedings for a declaration on the application of the law in respect of unauthorised overdraft charges.

Press release OFT files details of case against unauthorised overdraft charges

Particulars of Claim (pdf 55 kb)

26 July 2007

The OFT will tomorrow commence proceedings in the High Court for a declaration on the application of the law in respect of unauthorised overdraft charges. This complements the OFTs ongoing market study into personal current accounts, which addresses wider questions about competition and price transparency.

Press release OFT launches test case on unauthorised overdraft charges

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