Letter to MP

[dar£n]

Using the template on this site, altered very slightly, I have contacted my local MP to see what his views are on this topic of banks charging.

Lets see what happens....

for those of you who have not seen this template:

Dear Peter Luff,
I am writing to you to ask you to let me know what your views are on the serious problem of unlawful penalty charges which are levied against their customers by Barclays Bank & other UK High Street Banks.

It is a well established rule of Common Law that contractual penalty charges which exceed the actual losses suffered, in this case by the banks when a customer exceeds limits or a direct debit or cheque are returned, are invalid and will not be enforced by the Court. A series of judicial decisions going back over 100 years shows this to be true.

More recently, The Unfair Terms in Consumer Contracts Regulations 1999 has confirmed that a disproportionate penalty would be an example of an unfair term and that this would therefore be unenforceable at law.
The Director General of the Office of Fair Trading announced in 2005 that any penalty charge which exceeded actual losses was disproportionate.

Yet despite this, the Banks continue to apply these charges, and of course the vast majority of bank customers accept the banks’ authority that these excessive charges are valid and they pay up without a lot of fuss.
It is not possible that the banks do not realise what they are doing?

A survey reported this year by the BBC and others, concluded that one in five bank customers suffered from these charges in 2005. This is a large proportion of your constituency. Most of these people have incurred penalty charges because they are in difficulty. Many of these people are vulnerable and already have difficult lives.

The OFT, which is empowered to investigate, shows signs of being reluctant to do so.

Following recent tv programs highlighting this issue, many people, myself included, have taken or taking legal action against the banks. The banks almost never go to court. Fearing a formal judgment against them they bluff and threaten, but eventually settle before the day of the trial. Through the Internet sites at The Consumer Action Group & Bank Action Group - Fighting unlawful practices and bank charges. I am in touch with many people who are challenging the banks, some of whom are beginning legal actions.

The Unlawful Penalty Charge racket is apparently worth £3 billion per year. It is not surprising that they are not anxious to give it up.

I would be grateful if you would reply to me and let me know what your views about this are, and what steps you would be prepared to take to bring this scandal to an end.

Can you think of any reason why, by their dominant position the UK, banks should hold themselves above the civil rule of law?

Thank you for your time.

if you agree, why not do the same?? lets bombard them with this letter.

[MARTIN3030]

Good.
I think the government should,as many are calling for,impose a windfall tax on them all.
Cant see the current Chancellor doing it since he wont want to make any enemies in the city BEFORE his challenge for P.M.
Money from the windfall tax should then be used for creation and help for new businesses.

[dar£n]

Maybe you should run for P.M
LOL

[dar£n]

C'mon you guys, its not just about YOU!, do this for EVERYONE who has a bank account,
The more letters sent the more chance of action.
dont just sit there waiting for the next guy to do it.

[dar£n]

Letter received today:

Thank you very much for your recent email concerning bank charges. I read the points that you raised with interest.

I understand your concerns regarding bank charges on unauthorised overdrafts. Although these charges may be considered unfair, I do think it is reasonable for banks to make a charge to cover the administration costs they incur when their customers are overdrawn. I also believe that bank charges on unauthorised overdrafts can act as a disincentive for people to go overdrawn, which is important in the current climate of rising personal debt.

You may be aware that last year the Office of Fair Trading said that a default charge of more than £12 for late payment of credit card bills will be considered unfair. Given that the OFT's investigation into charges by credit card companies started in 2004 and took two years to reach the conclusion that a maximum charge of £12 was fair, it would not be right for me to give a figure that I think would be a fair charge on other banking products, such as unauthorised overdraft. However, it is important that whatever banks charge reflect their costs and do not impose unfair penalties on their customers.

In light of the concerns raised in your email I have made further representations on your behalf to Ed Balls MP, Economic Secretary at the Treasury, who has responsibility for financial services including banking. My office will contact you as soon as i receive a response.

Thank you again for writing to me about this important issue.
PETER LUFF MP

[dar£n]

well I dont know about you but I read that as he is either on their side or is clearly not in possession of the fact that todays consumers are clearly not happy.
but then i dont suppose HIS bank account gets slapped with charges does it?

[dickeggsy]

it just goes to show how out of touch with the public these people are , and not just concerning bank charges , the whole country is in a mess and they just bury their heads in the sand.
well while their heads are in the sand someone should shove a size ten boot up their arses and kick them into reality.
what planet are they living on.
my letter is going off tomorrow to my local MP and also to that other well known politician Tony Blair who will probably blame it all on Maggie Thatcher.
oh well nearly time for bed said zebedee.

[dar£n]

what we need to do is get EVERYONE on this site to forward the EXACT SAME letter to their MP, flood these people with our opinions.
I think its wrong, that MP's are supposed to reflect the thoughts and concerns of its public and to run the country the way the public wants it run........oooh sorry im in cuckoo land again!!!!!!!
Lets sack the lot of 'em.
Its all our fault in the end tho, we're the ones who vote these idiots in.

[dar£n]

sorry CAGBOT
edited accordingly, [got carried away a bit - wont happen again LOL]

[brados]

My letter sent to David Winnick this morning, lets wait and see what the general opinion is now - after the whistleblower prog.

[dar£n]

Reply sent to LUFF:

Dear Peter Luff,
In response to your letter concerning my recent communication with you about unfair bank charges.
I must say that I am very disappointed with your views that you feel Banks are not in the wrong for imposing these extortionate amounts on their customers. And it clearly sounds like you are defending them, maybe you are misinformed?
I would like you to reconsider your views after reading the following.

UK high street banks have maintained their regime of unlawful charges by hiding the true costs of handling delinquent accounts.

The law says that contractual penalties may not exceed the actual costs incurred by a breach of contract.

The BBC Whistleblower program on 21st March revealed that the Clydesdale and Yorkshire (and at one time - Northern) banks operate a computerised costing system which shows that the cost to these banks of handling delinquent accounts is no more than £2 and normally far less.

The costing system is called CYNthesys - which stands for Clydesdale, Yorkshire, Northern - the system CYNthesys enables the detailed analysis of any manual operation which is carried out within the bank so that a precise costing can be obtained. The Whistleblower demonstrated a CYNthesys spreadsheet in operation.

It is convincing documentary evidence of the bank's true costs and that their penalty charges produce a profit margin as much as 1700% (seventeen hundred percent).

As you know, there has been a massive consumer movement over the last year. Well over one million bank customers have challenged their banks on the legality of penalty charges and have reclaimed their money.

Despite this, the banks continue to resist claims The banks continue to deny that they are breaking the law

~~ The banks continue to clog up the courts with sham defences

~~ The banks continue to apply their unlawful penalty charges

~~ Each bank claims that it is acting in line with all of the other banks

Despite all of this, despite mounting public pressure, despite mounting publicity, despite mounting condemnation from the financial ombudsman, the banks continue to defy authority and continue implementing their regimes of unlawful penalty charges contrary to Common Law and the Unfair Terms in Consumer Contracts Regulations 1999.

In December 2003 a Parliamentary select committee failed to discover the true costs of handling delinquent accounts: Transparency of Credit Card Charges (First Report, Session 2003-04, HC125).

In April 2005 a Treasury select committee again failed to discover the true costs of handling delinquent accounts: Credit Card Charges and marketing (HC274).

On 5th April 2006 The Office of Fair Trading published a report which called on the credit card companies and banks to comply with the law of penalty charges.

On 22nd May 2006 an early day motion EDM2227 called for compliance with the OFT report of 5th April 2006.

On 26th October 2006 The Competition Commission of Northern Ireland published a report which shows that approximately 12% of current account income was produced by penalty charges.

On 16th January 2007 Matthew Taylor MP stated to members of Parliament in an adjournment debate that bank charges were unlawful.

Are you content that Parliament and the Law continue to be defied?

Elected Members of Parliament have a duty to raise this matter with their colleagues, with the Government and in Parliament.

The Office of Fair Trading but surely now, perform their duty to take action under the Unfair Terms in Consumer Contracts Regulations 1999.
CAG 270307

[dar£n]

Reply from LUFF:

Thank you for your further email of March 27th. I have read all you have to say with interest and I will comment further in light of the reply i am expecting from Ed Balls.

In the meantime I wonder if you are writing to me from some personal experience that you wish to share with me, which might throw further light on your concerns.

[Trucker]

I have just emailed my MP Tony Cunningham. Hope you don't mind but i copied and pasted

[dar£n]

YOU CARRY ON,, THE MORE PEOPLE THAT DO IT THE BETTER FOR GUYS ON SITES LIKE THIS

[sorry about caps]

[dave]

I also believe that bank charges on unauthorised overdrafts can act as a disincentive for people to go overdrawn

Errr....the very point that makes the charges unlawful. So this MP is actually condoning the banks breaking the law????

[dar£n]

Yes, exactly my point in my reply to him, and to think the public supposedly voted this "person" in. [edited before CAG got to it - LOL].

But then I dont suppose HIS bank has ever slapped a charge on him, he wouldnt need an overdraft facility would he, Too much money - not enough action, typical MP