Millions of customers hoping for refunds on overdraft charges were left disappointed today after Britain's high street banks won a landmark case, the Times of London reported.
The Supreme Court upheld the banks' argument that assessing the "unfairness" of overdraft charges is beyond the scope of the Office of Fair Trading (OFT), the consumer watchdog, which has been trying to use its powers to force banks to lower the penalties and repay the charges to customers, the paper reported.
About one million people have already filed legal claims for refunds. Those cases may now be dismissed.
The OFT confirmed that it cannot take an appeal to Europe, but Ed Crosse, a litigation partner in Osborne Clarke, the law firm, said: "As the Supreme Court's decision records, it remains an option for the OFT to assess the fairness of the charges according to other criteria," the paper reported.
In handing down the unanimous ruling today, Lord Phillips of Worth Matravers, the President of the Supreme Court, referred to another set of consumer protection regulations that could give the OFT the same power to clamp down on banks although the justices were careful not to say whether this argument would work in practice.