Banks' appeal comes off its hinges

THE bank charges gates have been unbarred and are creaking loudly as hordes of reclaimers pushing to get their money back are now restrained only by the smallest of latches.

The biggest consumer revolt since the poll tax riots is nearing its conclusion, and hopefully it won't be long before millions claw back £2-3 BILLION unfairly snatched from them.

HISTORIC DECISION

THURSDAY was a momentous day in bank charges reclaiming history, and I was privileged to be sat at the back of the test case courtroom to listen to the Court of Appeal's Sir Anthony Clarke read out an unequivocal statement.

His words? That banks' attempts to overturn the original victory for reclaimers and the Office of Fair Trading (OFT) had been dismissed.

It was so final, he said, all the judges considering the case had unanimously decided NOT to grant banks permission to appeal to the House of Lords.

At that moment, it was all I could do to stop myself cheering to avoid the frowns of gowns and grey suits.

Yet sadly, the judge clarified that banks could ask the Law Lords DIRECTLY for permission to appeal- and now it's confirmed they will do so.

A THREE-YEAR BATTLE

I FIRST heard about bank charges reclaiming in January 2006, after a couple of clever chaps approached me for support after spotting lenders' hidden law-breaking.

I took up the cudgels after witnessing the hideous damage being done by these charges-when people get caught and can't repay, penalties may snowball into thousands, with charges added to charges.

Within two years, the revolt exploded: 5.6 million template letters for how to reclaim charges have been downloaded from my website alone. The banks paid out an estimated £1 BILLION, with some people getting back £30,000.

Then suddenly in July 2007, the test case was launched, and the Financial Services Authority regulator halted all reclaims. Now, after Thursday's result, that is closer to ending.

Q. DOES THIS MEAN BANK CHARGES ARE UNLAWFUL?

NO. Thursday's ruling was about deciding whether fairness laws apply to bank charges.

Campaigners have always argued that charging £35 for going a couple of quid over your overdraft limit isn't proportionate. But banks have pinned their hopes on the argument that "it doesn't have to be proportionate, as those laws don't apply". Now it's been confirmed again that the laws DO apply and bank charges must be FAIR.

Q. WHAT HAPPENS NEXT?

WE wait for the House of Lords to decide whether banks can appeal. Assuming they can't, the Office of Fair Trading (OFT) must decide whether charges actually are unfair-and judging by the smiles on it's representatives' faces as they left court I'm in no doubt that they will press on.

The OFT has revealed it has already written to banks setting out its concerns that charges may be unfair and expects to reach its final decision later this year.

Then it must convince banks to agree on a remedy. This will tend to be about future bank charges but it will also have a huge impact for reclaimers, as it should set out what's fair. If they can't agree, then it's back to court.

Q. HOW FAR BACK CAN I CLAIM?

YOU can claim back six years in England and Wales (five in Scotland), although when the test case began in July 2007, the clock was STOPPED. So you should be able to claim back all charges since July 2001. It could be more than you think-just two charges every year could add up to a total of £500.

Q. IS THIS THE END OF 'FREE BANKING'?

RECLAIM opponents argued this while the banks were paying out, but we still haven't seen it. Even if £3 billion is paid, it's a fraction of our taxpayer bill for bailing out the banks.

If anything sees off free banking, it will be SHAMBOLIC management decisions that cost hundreds of billions-NOT reclaiming. Yet we don't actually have free banking, we have 'fees-free' banking for customers in credit. And with the market hugely competitive (some banks offer £100 for switching) fees are still unlikely.

Q. IS THIS GOOD OR BAD FOR THE ECONOMY?

IT could be great. Imagine billions being taken out of banks' safes and put into the hands of rightful owners for them to spend. What a stimulus to the economy in times of need.

Q. CAN I RECLAIM NOW?

THE FSA-imposed hold on reclaims is still on and the judge said the court's equivalent should remain until the Lords decide whether to allow an appeal (and if they do, until THAT decision is made). I think it's likely the FSA will follow their lead, keeping reclaiming on hold.But get in the queue to get your money sooner once it's all resolved. Free template letters at www. moneysavingexpert.com/bankcharges

Q. I'M IN REAL TROUBLE, CAN I RECLAIM NOW?

YES. There's an exemption for extreme hardship such as being unable to pay your main bills or being hit with more than £500 of charges in the last year. If that's you, go for it. Full rules at www.moneysavingexpert.com/bcnews

TV Money Guru Martin Lewis is the creator of the Consumer Revenge website www.MoneySavingExpert.com which is packed with info on how to get more money in your pocket.

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