Banks Repay £560 Million in Charges
High Street banks have reportedly repaid over £560 million to customers who feel they have been overcharged for unauthorised overdraft fees or unpaid item charges.
Banks have settled with hundreds of thousands of customers after receiving claims last year, before the issue was taken to the High Court last summer.
The extent of the payouts has been revealed in annual results statements issued by the banks. the largest payouts so far have been from the Halifax Bank of Scotland (HBOS), which has refunded £122 million.
Other refunds announced include The Royal Bank of Scotland at £119m, Barclays £116m, HSBC £115m and Lloyds TSB £76m.
Abbey has not revealed how much it has refunded, along with the Nationwide Building Society.
Future repayments remain a matter of speculation, but HSBC admits it may have to pay out a further £303m. Some estimates put total future repayments at over £10 billion. The Office of Fair Trading reckons banks make between £2bn and £3.5bn each year from these charges.
Because of the volume of customer refund claims, the banks agreed to go to the High Court for a test case last summer in order to find out what was considered a fair charge for breaching overdraft limits. The judgement from the case is not yet in, and they have permission to put all subsequent claims on hold until a ruling is made.
It is expected that, if the ruling goes against the banks, they will introduce current account fees as a way of recouping lost revenue.