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LegalBeagle Wins Bank Charge Case - Lloyds Overdraft Terms deemed Unfair
Lloyds Overdraft Terms deemed Unfair in new Bank Charges Victory
Lloyds Bank in Taunton
Lloyds TSB has been ordered to pay a customer over Ł1700 after it unfairly applied bank charges to his account and damaged his credit file.
In what we believe is the first bank charges court claim victory since such cases were stayed in July 2007, LegalBeagles member Oliver Foster-Burnell (‘orfoster’) has been successful in his claim for a refund of charges and interest.
The claim was brought against Lloyds TSB at Taunton County Court where Mr Deputy District Judge Stockdale held that despite the Supreme Court judgment, the unarranged overdraft charges levied on Mr Foster-Burnell were contrary to the requirement of good faith as per section 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 and, as such, unfair.
Oliver Foster-Burnell, the Claimant in this case said: “It is unfair that the banking industry are allowed to profit while anyone suffers financial hardship by applying these charges and allowing charges to snowball out of control, it skews the imbalance between the banks making huge profits and consumers around the country suffering difficulties, I am so pleased that in my case the judge awarded in my favour”.
Mr Oliver Foster-Burnell
Oliver continued: “I’ve had such amazing support from the LegalBeagles forum and my legal team who have done an excellent job in supporting me”
The bank was ordered to re-imburse the claimant Ł743 in charges plus interest. The court also awarded the claimant non-pecuniary damages of Ł1000 for a related incorrect default to his credit file.
We consider this County Court Judgment to be highly significant and although it can only be persuasive as authority currently it will almost certainly be subject to appeal and could be ground breaking.
The ruling does not effectively overturn the Supreme Court Judgment made back in November 2009 but adds a further dimension to future claims, particularly to customers who have suffered from financial difficulties whilst in an overdraft situation with their current accounts.
Taunton County Court
Mr Foster-Burnell’s case was brought using relatively new case law established in the European Court of Justice: Nemzeti Fogyasztóvédelmi Hatóság v Invitel Távközlési Zrt C‑472/10 (“Hatóság”)
In the Hatóság case the ECJ found that price variation clauses in consumer contracts must have reason for and method in their mechanism clearly set out. In Orfoster’s case, as with all standard current account contracts, Lloyds simply increased his overdraft charges without reason or method.
The claimant was also awarded damages for an incorrect default registered on his credit file. Although the judge held that no damage had been done to the file by the ‘default’, the fact that Lloyds had agreed to the claimant repaying the overdraft by way of a debt management plan it meant that no default had in fact occurred.
Nick Spooner, co-owner of the LegalBeagles consumer forum stressed that ‘’until the appeals process in this case is exhausted we do not recommend anyone using these arguments in litigation. We would like to congratulate Oliver and thank his legal team of Kate Briscoe (Howlett Clarke Solicitors and co-owner of LegalBeagles.info), and counsel Tom Brennan for their dogged determination in continuing the fight for fairness .”
Lloyds Bank in Taunton
In what we believe is the first bank charges court claim victory since such cases were stayed in July 2007, LegalBeagles member Oliver Foster-Burnell (‘orfoster’) has been successful in his claim for a refund of charges and interest.
The claim was brought against Lloyds TSB at Taunton County Court where Mr Deputy District Judge Stockdale held that despite the Supreme Court judgment, the unarranged overdraft charges levied on Mr Foster-Burnell were contrary to the requirement of good faith as per section 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 and, as such, unfair.
Oliver Foster-Burnell, the Claimant in this case said: “It is unfair that the banking industry are allowed to profit while anyone suffers financial hardship by applying these charges and allowing charges to snowball out of control, it skews the imbalance between the banks making huge profits and consumers around the country suffering difficulties, I am so pleased that in my case the judge awarded in my favour”.
Mr Oliver Foster-Burnell
The bank was ordered to re-imburse the claimant Ł743 in charges plus interest. The court also awarded the claimant non-pecuniary damages of Ł1000 for a related incorrect default to his credit file.
- You can read the full judgment here
We consider this County Court Judgment to be highly significant and although it can only be persuasive as authority currently it will almost certainly be subject to appeal and could be ground breaking.
The ruling does not effectively overturn the Supreme Court Judgment made back in November 2009 but adds a further dimension to future claims, particularly to customers who have suffered from financial difficulties whilst in an overdraft situation with their current accounts.
Taunton County Court
In the Hatóság case the ECJ found that price variation clauses in consumer contracts must have reason for and method in their mechanism clearly set out. In Orfoster’s case, as with all standard current account contracts, Lloyds simply increased his overdraft charges without reason or method.
The claimant was also awarded damages for an incorrect default registered on his credit file. Although the judge held that no damage had been done to the file by the ‘default’, the fact that Lloyds had agreed to the claimant repaying the overdraft by way of a debt management plan it meant that no default had in fact occurred.
Nick Spooner, co-owner of the LegalBeagles consumer forum stressed that ‘’until the appeals process in this case is exhausted we do not recommend anyone using these arguments in litigation. We would like to congratulate Oliver and thank his legal team of Kate Briscoe (Howlett Clarke Solicitors and co-owner of LegalBeagles.info), and counsel Tom Brennan for their dogged determination in continuing the fight for fairness .”
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