Banks Win Overdraft Charges Case

1st December 2009
Banks Win Overdraft Charges Case image

Banks Win Overdraft Charges Case

The long awaited Judgment from The Supreme Court on Overdraft Charges of banks arrived on 25th November.  Unfortunately the Court ruled that the Office of Fair Trading (OFT) does not have the powers that it thought it had to scrutinise the fairness of bank charges.

In explaining his ruling, The Supreme Court’s President Lord Phillips said that bank customers agreed to pay overdraft charges as part of the price of having a current account, so they fell outside the scope of the protection of the 1999 Consumer Contract Regulations.

However the OFT has vowed to fight on despite its disappointment with the Judgment.  It is thought that the OFT could still try to scrutinise bank charges in other ways, perhaps by way of a full Competition Commission enquiry.

The OFT said that it would make another announcement in December and hopefully more will be known at that point as to whether or not the OFT will fight on with the cause for consumers.

Grant Shackleston commented on the ruling as follows:-

“This is obviously an extremely disappointing result for all the consumers who have been waiting a number of years to see whether or not their bank charges are unfair.  Although the banks have clearly won on this occasion, it has become clear that the banks have not been thinking enough about their customers.  Hopefully this case will concentrate the banks’ minds on the welfare of their customers and lead to a review or changes in their bank charges.”

The banks must now start processing all the complaints that had been put on hold for the past two and a half years whilst this Judgment was awaited.  The British Banker’s Association has said that the banks will deal with the complaints “in an orderly fashion”.

It has however thought that these claims are now at an end.  It is believed that the likely outcome of the stayed cases is that they will now be struck out and there will be no chance of a refund for the consumer.

Some consumers have been fortunate enough in obtaining refunds prior to this Judgment.  It is felt that these payments were likely to have been made as “goodwill gestures”.  If so this means that the consumer will be allowed to keep these repayments and will not need to repay the bank.

If you do go overdrawn without the permission of the bank then this ruling clearly shows that the bank can still charge you a fee and set the level of that fee.  Therefore a customer should negotiate in advance with a bank regarding an overdraft facility or an extension thereof.

If you require any advice in light of this ruling then please contact Daven Naghen.

What is the Trust Registration Service? image

What is the Trust Registration Service?

Do you need to register a Trust?

All UK express in existence on or after the 6th October 2020 must now be registered with the UK Trust Registration Service by the 1st September 2022.   A Trust now needs to be registered regardless of whether or not it is subject to tax. 

What is the Trust Registration Service?

The Trust Registration Service compiles details about a trust including information about when the trust was created, details of the settlor (the person who created the trust) and the ultimate beneficiaries of the Trust. 

Express Trusts can cover all types of trusts including trusts created in a Will by a deceased settlor, life time trusts and declarations of trusts with regard to the beneficial ownership of land and properties. Registration can even been required for a bare trust so where one party holds an asset for another.

Certain types of Trust are excluded from the need to register including:

  • a trust create by the intestacy rules.
  • a trust created by a court order.
  • a trust of a life policy or pension policy that pays out on death/ terminal or critical illness
  • a Pilot Trust created before 6th October 2020 that hold less than £100 in it
  • a Will Trust wound up within 2 years of date of death.
  • a trust of jointly owned property where the Trustees and the Beneficiaries are the same people.
  • a bereaved minor trust
  • A personal injury trust

What information is required to register the Trust?

Trustees must enter details about:

  1. The Trustees and nominate a lead Trustee
  2. When the Trust was created
  3. The Settlor
  4. The Beneficiaries

What happens if I do not register the Trust by the deadline?

HMRC have indicated that initially they will send “nudge letters” to encourage Trustees to register a Trust but ultimately if the Trust is not registered on the system then the trustees will face penalties and fines starting at £100 for each Trustee.  Penalties will increase to £200 if registration is between 2 and 6 months late and £300 (or 5% of the tax liability whichever is  higher) if registration is more than 6 months late.

How can we help?

If you think you are a Trustee of a Trust that needs to be registered please contact us and we will assess whether or not you do need to register the Trust.  You can appoint us as your agent to register  the Trust on your behalf and then continue to maintain the Trust Registration on an annual basis.

If you would like to speak with one of our private client team please contact us on 01775 722261 and speak with Jane Mawer, Faye Blair or Jamie Dobbs.

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