In a move which has rocked the banking industry, a judge has ordered Barclays Bank to stop issuing penalty charges to a customer who is suing for repayment of “illegal” charges.  In a  welcome move for the consumer, Judge Abrahams at Luton County Court issued the order against Barclays in relation to a case involving Nadine Fry, who is looking to reclaim £1500 in charges from the financial giant.  So what does this mean?

There are two real issues to consider here which include :-

The Consumer’s Position

Over the last few weeks there have been reports of banks adopting aggressive strategies to try and stop customers pushing through with their claims.  People have seen charges added to their accounts, accounts frozen and in some case accounts have been closed altogether.

This freezing of additional overdraft of penalty charges has given many consumers some breathing space, and allows them to push forward with their claims without the threat of further repercussions.

The Banking Sector’s Position

The last 12 months have seen the banks adopt a number of strategies to try and influence the cases against them including, delaying tactics, the threat of chasing customers for court costs and an often heavy handed approach to the consumer.  The ruling by Judge Abrahams will have one major effect, it will ensure that the stalling tactics stop, and we finally get towards some kind of test case to clarify the situation once and for all.

Conclusion

While the recent ruling by Judge Abrahams has been welcomed, it is not an approach which all judges will take. However, it will have the effect of focusing the mind of financial sector a little more, and ensuring that we arrive at a definitive ruling in the not too distant future.  If the recent ruling was adopted by more judges, then the banks would see much of their profits on hold - something that would please neither the management nor shareholders alike!