Banks 'facing potential £1bn bill' in penalty charges case
Banks in the UK could be hit by a £1 billion bill, if the ongoing bank charges case in the High Court goes against them.A consumer revolt against the penalty fees for customers breaching overdraft limits, which came to around £30 each, led to the case being called.It will decide whether or not the Office of Fair Trading should rule on the charges' fairness.However, executives are thought to be worried about attracting additional negative publicity in fighting the payouts if they lose the case, the Observer reports.UK banks are blamed by many consumers for helping to bring about the credit crunch and economic downturn - and the government has been obliged to launch a £37 billion rescue plan to support three at-risk financial firms.Speaking to the newspaper, Sandy Chen at broker Panmure Gordon commented: "We estimate that the stock market-listed banks may have to shell out around £1 billion, if things go the wrong way for them."
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