Architect bids to make legal history in bank charge battle
Harry Turnbull is attempting to prove that around 3000 of overdraft fees imposed on him in the past seven years were "fraudulent and deceitful". If successful, his case would set a legal precedent for banks in disputes with customers over charges.
At Edinburgh Sheriff Court yesterday, Mr Turnbull was told to amend his claim to include more specific allegations and to prepare evidence for a hearing in the middle of June.
With the backing of the Consumer Action Group (CAG), the 62-year-old is claiming that bank overdraft fees are "penalties" - because the charge to the customer is around 30, when the actual cost of an account exceeding its overdraft limit is no more than 2.
The dispute began when Mr Turnbull wrote to Clydesdale Bank to ask for a refund of the charges he has paid since 2000. When it refused, he raised an action to claim back 1500 - the maximum allowed under Scots law in a civil summary hearing.
Clydesdale agreed to pay back some of the money he had paid in the past five years - citing the Prescription and Limitation (Scotland) Act, which states a claim cannot be made more than five years after it happened - but Mr Turnbull refused the offer.
"Such a case against a bank has never got this far," CAG spokesman Robert Cumming said today. "Mr Turnbull was told to go back and prepare evidence that Clydesdale was acting in a fraudulent and deceitful way, and we are confident we can help him do that.
"He chose not to claim more than 1500 because he wanted to stay within this court to limit complications. Today was just a hearing. When the actual debate takes place we will have collected enough evidence to prove this."
Mr Turnbull, of Gayfield Square, said: "When you run your own business it can be hard to keep track of everything that's coming in and going out, whether it's just going two pence over your limit or having a direct debit not come off because you don't quite have enough money at that specific time. Until internet banking came in, it was near impossible to check this every day."
Bank charges have been under the microscope recently after the BBC aired an investigation as part of its Whistleblower series.
An undercover journalist spent nine months working in an English bank, where she found that customers were misled over bank charges.
A report from the Office of Fair Trading released last year will also be referred to.
That investigation found that default charges on credit cards "should only be used to recover certain limited administrative costs - these may include postage and stationary and staff costs". The OFT recommended these charges should not be over 12.
A spokesman for the Clydesdale Bank defended the charges, saying customers should be responsible enough not to regularly surpass a pre-agreed limit.
He said: "We maintain our position that our charges are legal, fair and transparent. They are part of the terms and conditions customers sign up to with the account, and this was a point emphasised by the sheriff.
"If people are concerned they are breaching their overdraft they just have to get in touch with the bank."
The hearing has been scheduled for June 20.