There have been further developments ahead of the Supreme Court’s judgment in the bank charges litigation, which is due this term following the hearing before the House of Lords in June. Last week, the OFT announced that it had cut a deal with the UK’s retail banks to ensure that the charges they applied to current accounts were clearer and that it would be easier to switch accounts between banks.

Since the House of Lords hearing back in June (see our coverage here) the OFT has been expected to win the right to assess bank charges for fairness. The developments since then – RBS and other banks reducing their fees, Gordon Brown urging an early settlement and the FSA asking banks to prepare to refund fees – all point to the Supreme Cout ruling in favour of the OFT over the banks. 

Of course, Britain’s banks are easy targets at the moment. Attacking them overdraft fees, which have no direct economic justification and fall to be paid by some of the banks’ most vulnerable customers, is one thing. Working out where the banks will replace the billions of pounds of income that those fees generate is another. As the bank charges litigation has progressed, there has been commentary (for example, in The Telegraph here) that if the banks are deprived of this income, they will have to start charging for current accounts. So the Supreme Court’s judgment is unlikely to be the end of the story.

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