In Office of Fair Trading v Abbey National plc & others [2009] UKSC 6, the UK Supreme Court decided that the OFT did not have the power to launch an investigation into whether the banks’ penalty fees were excessive.

Although the long running case was not about whether the banks’ charges for unauthorised overdrafts were fair, many of the comments made will be taken into account in Australian discussion of this issue.

In particular, the court confirmed that the charges were not concealed default charges designed to discourage customers from becoming overdrawn on their accounts without prior arrangement.

The decision does not mean that individual consumers cannot complain about bank fees and the UK Financial Services Authority has announced that these complaints can resume.