The Financial Services Consumer Panel welcomes the announcement that the Office of Fair Trading and a number of banks have agreed to bring a test case in the High Court on unauthorised overdraft charges.

John Howard, Chairman of the Panel, said:
"It is terrible that the issue of bank charges has been allowed to rumble on for so long, with thousands of consumers having to threaten action to have their cases settled. The test case will provide certainty and consistency for consumers in the way firms are dealing with complaints. We understand and support the decision to allow banks to suspend dealing with claims until the test case has been decided, but will be pressing the FSA to revoke the waiver if the test case becomes protracted and consumers are exposed to undue risk."

The Consumer Panel also welcomed today's publication by the FSA of a letter to Chief Executives of firms providing current account services, in which it sets out how banks need to improve their handling of complaints about unauthorised overdraft charges.

John Howard, Chairman of the Panel said:
"We are glad that the FSA has carried out this work on complaints handling, over which it already has direct control. We believe the deficiencies this work has exposed reinforce our view that the FSA should regulate all aspects of retail banking, including imposing the requirement to treat customers fairly. The current self regulation of retail banking through the Banking Code does not seem to be coming up to the mark.

The wide range of criticisms in this letter to Chief Executives, especially in relation to closing the accounts of customers who complain, suggests that some banks are having difficulty making judgements about the fair treatment of customers."

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