Bank to face penalty fees D-Day

Thousands of customers are suing their banks

Yorkshire Bank has been told that it may have to outline the "true cost" of bank penalty charges it imposes.

Judge Iain Besford made the order at Hull County Court when hearing seven claims for refunds of bank charges.

Originally, 44 claims were to be heard but most were settled earlier, some just minutes before the court hearing.

The remaining seven cases will be dealt with as small claims, where the judge said the banks would have to explain their charging structure.

Disclosure order

At the same time as deciding the cases should go forward as small claims, the judge agreed to a disclosure order.

This means Yorkshire Bank has until 28 September to decide if it will settle the claims or face having to outline its charging structure in open court.

The decision to proceed with the cases as small claims, and grant a disclosure order, was something of a surprise as the judge had previously told the claimants that he was minded to strike out their cases as having no basis in law.

However, the Consumer Action Group, which represents people looking to reclaim bank charges, had arranged for legal representation to be present at the hearing.

Across the UK tens of thousands of customers have been suing their banks for the return of overdraft charges, gaining millions of pounds in the process.

To date, the banks have been reluctant to contest such cases, usually settling out-of-court.

So far no bank has outlined the case for its charges in open court.

If a bank were to do so and lose its argument that the charges were fair, it could lead to many more bank customers getting refunds.