Liquidated Damages - The Law Applied To Bank and Credit Card Charges

The Law Applied To Bank and Credit Card Charges

This law has recently been of great interest to UK bank and credit card customers who have been charged as much as £39 for a single transaction that took them over their credit limit. Consumers argued these charges were well beyond the cost of sending a computerised letter.

In 2007 the Office of Fair Trading investigated the excessively high charges being imposed on customers of credit card companies. In its report, the OFT confirmed these charges were unlawful under UK Law as they amounted to a penalty. It said it would be prepared to investigate any charge over £12, though this was not intended to indicate that £12 is a fair and acceptable charge. The OFT said it would be up to a court to determine such an amount based on the established legal precedent that the only recoverable cost would be actual costs incurred.

The credit card companies did not produce evidence of their actual costs to the OFT, instead insisting their charges are in line with clear policy and information provided to customers.

Following the ruling, many bank customers have made County Court claims against their banks and credit card companies for return of penalty charges for returned cheques, direct debits and unauthorized overdraft charges. To date no bank or credit card company, save NatWest on one occasion, has attended at Court for a Trial.

  • OFT v Abbey

Read more about this topic:  Liquidated Damages

Famous quotes containing the words law, applied, bank, credit, card and/or charges:

    Half the testimony in the Bobbitt case sounded like Sally Jesse Raphael. Juries watch programs like this and are ready to listen.
    William Geimer, U.S. law educator. New York Times, p. B18 (January 28, 1994)

    Any language is necessarily a finite system applied with different degrees of creativity to an infinite variety of situations, and most of the words and phrases we use are “prefabricated” in the sense that we don’t coin new ones every time we speak.
    David Lodge (b. 1935)

    That strain again, it had a dying fall;
    O, it came o’er my ear like the sweet sound
    That breathes upon a bank of violets,
    Stealing and giving odor. Enough, no more,
    ‘Tis not so sweet now as it was before.
    William Shakespeare (1564–1616)

    Especially with our first child, we tend to take too much responsibility—both credit and blame—for everything. The more we want to be good parents, the more we tend to see ourselves as making or breaking our children.
    Polly Berrien Berends (20th century)

    There is undoubtedly something religious about it: everyone believes that they are special, that they are chosen, that they have a special relation with fate. Here is the test: you turn over card after card to see in which way that is true. If you can defy the odds, you may be saved. And when you are cleaned out, the last penny gone, you are enlightened at last, free perhaps, exhilarated like an ascetic by the falling away of the material world.
    Andrei Codrescu (b. 1947)

    I have never injured anybody with a mordant poem; my
    verse contains charges against nobody. Ingenuous, I have
    shunned wit steeped in venom—not a letter of mine is dipped
    in poisonous jest.
    Ovid (Publius Ovidius Naso)