Office of Fair Trading v Abbey National Plc: Fifteen All in the Game Between the Office of Fair Trading and the Banks

Abstract

The subject of bank charges has excited considerable press coverage, and some campaigning by consumer groups. Complaints have multiplied, and litigation at the County Court level has increased to worrying levels. Under the Unfair Terms in Consumer Contracts Regulations 1999 the Office of Fair Trading can consider whether terms in consumer contracts are unfair. The OFT have commenced an investigation into bank charges under the Regulations. In Office of Fair Trading v Abbey National plc and others the High Court was asked two questions: whether the contractual terms that imposed bank charges were liable to an assessment for unfairness under the Regulations; and whether the same terms constituted penalty clauses under the common law. The judge ruled in favour of the banks that the clauses were not penalty clauses, and in favour of the OFT that the contractual terms were liable to assessment for unfairness under the Regulations.