OFT - Proposed Letter

[dave]

Dear Sir,

On xx/xx/xx your office released paper refxxxxx, regarding credit card default charges. In your report it was stated that the £12 'limit' was not a limit but a threshold above which you would take legal action. It was also stated that you expected the credit card companies to lower their charges to a lawful level (i.e. to be a true reflection of their administration costs in the event of a breach of contract), and did not expect them to merely reduce their default charges to £12.

We are not suggesting that default fees should be set at £12, and a court will certainly not consider that a default fee is fair just because it is below the threshold.

It would seem that the credit card companies have not done this. Most have just reduced their charge to £12 to avoid legal action.

I would be grateful if you would furnish me with information as to the next course of action the OFT intends to take in light of this blatent disregard for your ruling.

I sure you will agree that it seems far too coincidental that the credit card companies have reduced their charges to a true reflection of their admin costs, that happens to be the exact same amount as your threshold.

I believe that for the credit card companies to do this, is effectively 'laughing in the face' of the OFT and believe that further action should be taken.

yours faithfully,






A few gaps.

Any comments?

[Bookworm]

Yes, lose the quote marks, it looks sloppy. "laugh in the face" is a perfectly acceptable analogy and does not need further defining by quote marks.

I would be grateful if you would furnish me with information as to the next course of action the OFT intends to take in light of this blatent disregard for your ruling.

Surely it would be worth adding something to the effect that you, and the 60000 people behind you, would like to know.... Oh, and "blatAnt", not "blatEnt".

I sure you will agree that it seems far too coincidental

I AM sure...

[Niklowe]

Should you add something about Banks as well?

[JonCris]

I keep saying this with little response.

Copy all the lenders "get stuffed" + perhaps derisory offer letters & send them with your letter of complaint to the OFT That way instead of the occasional compliant which they will ignore they will begin to see just what contempt the money lenders hold the OFT in.

Now if most members disagree could they give reasons please so we can at least debate the subject

[dave]

Especially the letters where they claim that the OFT has stated £12 as a fair charge - which it clearly hasn't.

[JonCris]

Yup Dave

We could inundate the OFT with compliants & copy letters which they could hardly ignore.

Also they might be sparked into some firm action (at last) because they are peed off with the money lenders

[Bookworm]

Originally Posted by JonCris

I keep saying this with little response.

Copy all the lenders "get stuffed" + perhaps derisory offer letters & send them with your letter of complaint to the OFT That way instead of the occasional compliant which they will ignore they will begin to see just what contempt the money lenders hold the OFT in.

Now if most members disagree could they give reasons please so we can at least debate the subject

That's why (this was in response to my complaining about Halifax threatening to close my account if I sued them again), I have highlighted the relevant bits:

Dear Mr & Mrs xxxx,

Enterprise Act 2002 ('the Act')
Unfair Terms in Consumer Contracts Regulations 1999 ('the Regulations')
Halifax Plc ('the Company')

Thank you for your letter of 11 April regarding default charges imposed by the above bank. Your complaint has been logged for our records in order to further our understanding of this market and to inform this and any future investigations we may conduct in relation to this matter.

I am sorry to hear about the difficulties you have experienced. Unfortunately the Office of Fair Trading does not have the power to provide advice on individual complaints, or to help consumers to seek redress. Our primary duties include the enforcement of Competition Law, the regulation of the consumer credit market through a licensing system and the application of consumer protection legislation in respect of matters that adversely affect the collective interests of UK consumers.

As you are already aware, the OFT is currently looking at the issue of penalty charges for credit cards. Please follow this link to our press releases for further information:

http://www.oft.gov.uk/News/Press + releases/2005/135-05.him

and more latterly

http://www.oft.gov.uk/News/Press + releases/2006/68-06.htm.

However this investigation does not include charges for other areas such as personal banking and other sectors where financial penalties are incurred for breaches of contract.

The Financial Services Authority (FSA) is responsible for the banking sector. It has responsibility for the application of the Unfair Terms in Consumer Contract Regulations 1999 ('the Regulations') in respect of personal banking contracts. The OFT and the FSA have agreed that the FSA will take the lead on complaints such as those which relate to unfairness in contracts relating to personal banking. The FSA's address is:

25 The North Colonnade
Canary Wharf
London E14 5HS
Telephone: 0845 606 1234
Website: FSA.

The FSA do not have the power under the Regulations to intervene in individual disputes but the Financial Ombudsman Service can adjudicate if the company is unable to resolve matters satisfactorily. Their address is:

Financial Ombudsman Service
South Quay Plaza
183 Marsh Wall
London E14 9SR
Tel: 0845 080 1800
Website: Financial Ombudsman Service.

In our recent statement about credit card default charges which we published on 5 April, we have said that, in our view, the principles embodied in the statement will apply to other default charges - and that the banks and other finance businesses are expected to consider the wider implications of
these principles and bring any similar charges they impose for breach of contract into line with them, where and as appropriate, bearing in mind the different legal and practical contexts in which they operate.

In essence, although we are confident that the high level legal principles applicable to charges in other areas may be analogous, we are conscious that that they will probably require some modification or fine tuning to reflect the practical differences, or separate legislative framework or jurisprudence, in those areas.

Essentially, analogous charges would be where the supplier of a product is entitled under the terms of the contract to make a charge to the consumer who has breached the contract, (those terms would then be subject to the test of fairness in the UTCCRs so that the charge is not an unfair penalty) As we have not done the detailed work in the area of other charges, such as mortgages, we could not say at this stage with any certainty exactly which charges would fall to be considered and whether the current level of charging is fair, in our view.

Sorry I cannot be any more specific at this stage, but as you know we have focused our investigation to date on credit cards, and more work would be required to be able to give any further detail.

Yours sincerely

Kathryn Gresty
Consumer Regulation Enforcement Division

In other words, you can bombard all you like with correspondance from the bank, their answer will be: Not our job.

So, whereas Dave's letter does address something which falls squarely within the OFT's remit, yours doesn't, and it will get the brush-off. Sorry. (It's not just me, btw, when BF first suggested that everyone who has had the same kind of threats writes to the OFT, everyone who did write got that response.) And these people have an infinite capacity to pass the buck.

[JonCris]

I know this & it wasn't my intention that they should investigate individual cases.

It was my intention that they should become aware of whats going on & we as consumers are entitled to tell them no matter how much they try to wash their hands of the whole affair.

It has already been said by someone here who spoke on the phone at some length to an officer of the OFT who stated that if they receive enough complaints it WILL be investigated

& because at first we did not succeed is I think no reason not to have another go. Ithink we should make it clear that we don't expect them to investigate each compliant just that we are passing on information

[kevb0444]

Hi all,

I sent the OFT a letter yesterday asking them about bank charges. It was basicly the same as your "letter to your MP" template but with a few things tweeked (i hope you don't mind) to make it more relivant to the OFT.

If you want i'll let you guys know what they heve to say.

[thewifeandI]

I've been wondering if we (as in the Bank Action Group) shouldn't be negotiating with the OFT to allow us to represent the consumer's point of view. After all we have 62,000 members and rising, with all aspects of banking and consumer credit experience. We could put together a dossier of lies, delaying tactics, underhand tricks and other evidence of general wrongdoings and badness by the very companies who are currently accepted to be fit to hold a consumer credit licence. Statements like: -

"We've never paid out to anyone else, so don't expect us to pay you",
"Your statements are in the post",
"Our charges are fair and transparent",
"Suddenly it only costs us £12 to process a breach",
"We'll close your account",
"The Data Protection Act doesn't apply to ...",
"Microfiche means never having to send your data" and many more.

[JonCris]

& not before time may I say. We probably have more members than "Which" has circulation

[meagain]

If it makes any difference, my bank has now told me that it cannot refund my charges unless I give them a valid reason why I missed the payment. Really, should I have to give them a valid reason to reverse charges they're not allowed to apply?

I'm not convinced that any of this is going to work at all. The OFT has been found in dereliction of its duty. Can't we do something a little more effective than whine some more?

[thewifeandI]

The valid reason is that you didn't have enough in your account - obvious really...!

[meagain]

Originally Posted by thewifeandI

The valid reason is that you didn't have enough in your account - obvious really...!

... all of which is irrelevant. Why should I have a valid reason to ask for my money back beyond the fact that it's my money?

[JonCris]

meagain

I think thewifeandI was being somewhat sarcy.

Of course it irrelevant. Its a stalling tactic & they are hoping your a thick moron like them.

As for the OFTossers. I agree I think we should begin to turn our attentions to these so called regulators