It's probably not something that most Americans are following, but in England, the Supreme Court has been studying the legality of bank overdraft fees and whether the public should be refunded, and their verdict is in: the overdraft fees that have been soaking the British are legal.
Two courts had previously indicated that English banks might have to refund their fees, and I admit the thought made me rather gleeful, and last September in a WalletPop post, I started wondering if some similar lawsuit might make its way through the American courts. Why not? We borrowed The Office from England, and it's worked out so well here. Maybe we could take a real scenario in England and help us over on the other side of the Atlantic.
But it is not to be for English consumers. Bank fees aren't going anywhere.
One of the justices, Brenda Hale, said in her judgment, "The banks may not be the most popular institutions in the country at present, but that does not mean their methods of charging for retail banking services are necessarily unfair when viewed as a whole."
Soon after, the Royal Bank of Scotland chief executive Stephen Hester told the Scottish parliament that, "We should understand there is not a free lunch here, that banks have certain costs of doing business, and if you don't get paid, those costs in one way, then you have to find them in another way."
All of this sounds very logical, but I admit I'm sympathetic to the consumers and did enjoy the idea of banks, after what's been about two years of fighting this in courts, giving their customers millions of pounds in refunds.
The Office of Fair Trading, which initiated this legal battle, issued a statement, saying that they were disappointed and would consider whether to keep investigating overdraft charges. Whatever happens in the future, though, it's easy to see why British consumers are frustrated. British banks charge as high as 30 pounds ($50) and up to 30% interest to consumers who bounce checks or go into overdraft.
Overdraft fees ruled legal in England