| OFT Continues Its Defence |
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Continuing the case on behalf of the OFT, Brian Doctor QC said that "by not telling customers exactly what their overdraft charges are for, this meant they fell within the scope of consumer contract legislation. In many cases, the banks’ own terms and conditions are nothing more than self serving propaganda". Following on from his arguments on Tuesday and Wednesday, Mr Doctor further emphasised that the banks had been re-writing their terms and conditions as ‘fees for a service’ in order to fall outside consumer contract legislation. This he said was artificial as the banks’ were now suggesting that going overdrawn was an informal request to the bank for it to consider granting an overdraft. "This is an entirely artificial concept based on a deemed request," he said. And further that "This is not a benefit at all or a new service," Mr Doctor then went on to say that "current consumer contract legislation requires that where a contract specifies a price then the service must also be specified, but that the banks’ literature did not do this". "It must be a price or remuneration in exchange for a service - none of them are," "The goods or services promised in exchange must be clearly identified". In an extended analysis of each bank’s own charges, which sorely tested the resolve of the judge, Mr Justice Andrew Smith, Mr Doctor argued that while the overdraft charges were listed, none explicitly said what the charges were for or why they were being levied. One by one he claimed that while the lenders had listed their overdraft charges, none of them said explicitly what the charges or fees were actually for, or why they were being levied. The charges were not fees for services but merely fees for a set of circumstances while overdrawn. The terms and conditions simply set out when the charges will be triggered. He argued that nothing had in fact changed in the fundamental contractual relationship between the banks and their customers. The case is now expected to last until next Thursday. |
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