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Originally Posted by etccarmageddon
I suspect that they are refunding the fees but at the same time do not agree that these fees were unlawful. it's easier just to refund it rather than the expense of fighting the customer. if you go through the complains process and the banking ombudsman because they fail to refund then the cost to the bank will be £100s at least. also once an issue like this goes to the ombudsman and it rules in a consumers favour the banks would then be force to scrap or reduce these fees for all customers and then there might be the issue re back dating. so the last thing they need is a test case.
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Irrespective of the bank's opinion - penalty fees which are disproportionate and which do not represent the actual liquidated losses are illegal. This, enshrined in consumer contract law, has been proven in a court of law.
The banking ombudsman is, believe me, the last place a bank customer will get restitution. I am not aware of a single case where the ombudsman has ruled in the customers favour in respect of illegal charges.
The OFT, on the other hand.......
Have already told the banks what they need to do to comply with the law - and many of them are now shaking in their boots (as indeed are a lot of law firms and solicitors who have been party to hefty retainers to suppress the illegality / defend this practice by the banks for the past many years).
Thanks to "lemarsh" for your insight / input - you are absolutely correct about the early calling in of loans etc.