Office Of Fair Trading Test Case

[Wild Billy]

The Office of Fair Trading: OFT launches test case on unauthorised overdraft charges

[mattyb13]

Somebody has just told me, and this could be nonsense, that claims in progress could be suspended until the outcome of this is known.

[crfx250]

Wow! This is great news

[bernard coleslaw]

!!

[tifo]

Originally Posted by mattyb13

Somebody has just told me, and this could be nonsense, that claims in progress could be suspended until the outcome of this is known.

Could they?

Both the court and FOS?

[mattyb13]

Like I said it could be nonsense. I have not seen anything that supports this. I certainly hope not anyway

[crfx250]

Here's the BBA's reaction:




Banks join OFT in test case to establish legal clarity on overdraft fees

26/07/2007


Tomorrow morning a number of banks and financial services organisations(1) are taking the initiative, working jointly with the Office of Fair Trading (OFT) and the Financial Services Authority (FSA), to ask the UK courts to clarify the legal position regarding bank overdraft fees.
Court process

Banks believe the fees customers pay for unarranged overdrafts are fair and clear. However, this is clearly an issue where customers, as well as the banks, would welcome legal clarity. This is why banks have joined with the OFT to approach the courts for a ruling on this issue. It is unclear how long the case will last as that will depend on the court process.
Working together

The banks have approached the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) to agree a way forward to handle existing customer complaints. The FSA has agreed to issue a waiver(2), with immediate effect, to suspend the handling of customer complaints on this issue pending a decision by the court. Other banks who are not party to the court action will be applying to the FSA for a waiver and as such will be bound by the outcome of the court case.
What this means for the customer

The FSA has agreed that all existing or subsequent customer claims for refunds of bank charges will be recorded by the customer's bank or building society but any decision about potential refunds will be put on hold until the outcome of the court case. Offers which have already been made to customers will be honoured if the customer chooses to accept.
Banks will be writing to the UK courts requesting a stay(3) of all claims pending the outcome of this test case. The banks will be writing to customers with outstanding complaints advising them personally of their position.
Angela Knight, chief executive of the British Bankers' Association (BBA), said:
"Establishing legal clarity on the issue of bank charges is of paramount importance, not only for the banking industry, but for all customers now and in the future."
"The banks have always been firmly of the view that the fees they charge customers are fair and clear. The court case will clarify these points and provide certainty for customers and banks alike."



For further information, please contact:
Press Office (020 7216 8970 )
Out of hours contact (020 7216 8888 )


Notes to Editors:
(1)The BBA's members involved in the legal action are: Abbey; Barclays; Clydesdale; HSBC; HBOS; Lloyds TSB; Royal Bank of Scotland/NatWest; and Yorkshire banks; and Nationwide Building Society.
(2) The FSA this morning issued a press release announcing the details of this waiver. This can be downloaded from the FSA website (see link below).
(3) Banks will apply for a Stay of Proceedings on all current and pending cases to the Master of the Rolls for England and Wales, to the Attorney-General for Northern Ireland and to the Sheriff Courts in Scotland.

Related Links

FSA website (External Link)
OFT website - questions & answers (External Link)

[12thdomino]

Well it has been confirmed

So what do we do in the mean time, do we still put in our claims in or wait?

[noomill060]

Yup, just keep piling on the pressure. The banks have to record each and every claim, but once the waiver is granted by the FSA, they wont need to respond with an offer until after the test case.

[tifo]

does this apply to only bank current accounts or credit cards as well?

[judi3]

AA

[hootcube]

To what stage should we continue upto? The LBA still to be sent in or just the first letter? Also how long do we think until this case goes to court? (i appreciate this may be guess work at moment but hopefully somebody with more experience than myself will be able to make an educated estimate)

[PeterAnderson]

I have just read the Notice at the top of this forum

http://www.consumeractiongroup.co.uk...php?f=11&a=107

Does this mean that ALL claims are now suspended ??
OR is there are date when this suspension of claims comes into effect ??

Oh dear, or dear - this could take ages (years even, knowing how quick the OFT are [NOT])

What happens next ??

[tifo]

Originally Posted by hootcube

Also how long do we think until this case goes to court?

high court cases take a long time. Could be up to 2 years or over 1 year.

[crfx250]

How the OFT works

So why is it the OFT have taken the plunge now?

Could it possibly be related to the two threats of legal action looming over
them for not taking action sooner? I rather think it could.

Here's their record on default charges so far:

Credit cards - April 2006: ''We wanted to bring about a swift change across the whole market in the shortest possible timeframe''

Bank charges - April 2007: ''There is no quick fix''

Bank charges - July 2007: ''The OFT considers that a quick determination of this point of principle will assist in securing a clear and orderly resolution of the fairness of these charges.

[tifo]

does it apply to all banks and for both current accounts and credit cards or only the banks listed as "Abbey; Barclays; Clydesdale; HSBC; HBOS; Lloyds TSB; Royal Bank of Scotland/NatWest; and Yorkshire banks; and Nationwide Building Society"?

[noomill060]

Only applies to current accounts.

Carry on regardless with credit card claims.

[noomill060]

The other banks can apply for a waiver, allowing them to suspend dealing with your claims and hold on to you money until the test case is over.