The phenomenon of reclaiming of unfair bank charges began in late 2005, and since then it is estimated that 1 billion pounds has been successfully reclaimed from the banks. Also the website moneysavingexpert.com has claimed that over 6 million downloads have been made of its template letters by people wanting to claim back unfair bank charges paid.

The final appeal to the House of Lords is scheduled for the 22nd of June this year, and scheduled to last no more than three days. It will be worth looking back and examining how this case has progressed and take a look forward to see where it should go from here.

The Bank’s central argument is that the regulations known as the ‘Unfair Terms in Consumer Contracts Regulations’ do not apply to bank charges. The consumer’s argument is that the charges applied by bank for overdraft interest and charges are not fair and proportionate. The banks counter argument is not the charges are fair, but that this law does not apply to bank charges.

The high court and the court of appeal do not agree with the banks. The court of appeal in February 2009, stated that the law does apply to bank charges. As well as the courts, we also have the Office of Fair trading who need to decide whether the charges are unfair or not. They have still not made a definitive ruling on this, but it is expected that they will state that the charges are unfair.

A short outline of the timeline of this case is that the first test cases were made in late 2005, with certain online communities picking up the issue early in 2006, and the mainline media covering the issue in spring and summer 2006, becoming front page news with the newspapers by March 2007.

In July 2007 the OFT and the banks agreed to put a test case through the courts. And the FSA created the waiver that has placed all bank charge claims on hold. This waiver has been extended two times whilst the case has been heard by the high court, the court of appeal and now the House of Lords. This waiver is expected to expire after the latest appeal is heard by the House of Lords.

The test case by ruled against the banks. In April 2008, they processed with an appeal to the Court of appeal and were ruled against in October 2008. The court of appeal denied the right to appeal to House of Lords in the first instance, but the House of Lords overturned this decision in Apr 2009 and the case has now been scheduled for a June hearing.