Written by John Kruse, one of the leading experts on Bailiff Law, this consumer friendly guide is essential reading for anyone who comes into contact with a bailiff.
The book is easy to understand and clearly explains the rights
a bailiff has, and also what they cannot do when collecting debts and repossessing goods etc.
The Fundamentaly Supine Authority are due to announce the conclusions
to their investigation into Payment Protection Insurance.
The PPI market is huge and so are the figures. It is estimated that there are 20 million current policies in the UK, although it is widely believed that
figure for those policy holders who realise they have one is significantly
less.
The profit margins for the PPI industry are eye-wartering. From the income
received from PPI the payout for claims is just 20 percent compared to motor insurance of 80 percent. Only 1 in 5 PPI claims are paid.
The FSA has conducted it's investigation into PPI with it's customary break-neck speed and has taken a mere two and a half years to conclude.
Thur 27 Sept. FSA Waiver Review
The FSA will announce it's 2 month review of it's complaints handling waiver. ''We will review the waiver in two months to ensure the criteria for granting the waiver are being met, including whether banks and building societies are complying with the conditions set out in the direction. If we are not satisfied that these criteria are being met after two months or at any time after that, we can revoke the waiver''.
Their flagship condition for the waiver are the ''safeguards'' which are
''designed to protect the consumer'' including the request for banks to
''identify cases of hardship'' and deal with their claims. Unfortunately
the FSA couldn't find the space in the waiver directions to explain what
is meant by hardship to either the banks or consumers. When challenged
on this be Which? the FSA ''suggested'' they use the criterea set out in
The Banking Code which, as everyone will know, is on page 24 section 14
paragraph 14.1. So that's alright then.
Fri Sept 28 OFT Test Case: Banks To File Defences
'' Each Bank (or if considered appropriate, all banks together) to serve
a defence and counterclaim by 28 September 2007''. This should make
for very interesting reading.
I think i heard the case conference is in October?
And I notice today A&L have announced re-structuring of charges - What a co-incidence
I smell a definite deal coming up
Can we lay bets on the hearing actually happening?
Jan
Please note I am not an expert - I am not offering opinions or legal help - Please use all the information provided on the site in FAQ- step by step instructions and library- thanks Jansus
[IMG]http://www.consumeractiongroup.c o.uk/forum/images/icons/icon1.gif
offer from A&L 24/8/07 - after case stayed
"What makes the desert beautiful is that somewhere it hides a well." - Antione de Saint Exupery
Even if there is a deal over future charges, it's hard to see how it can work retrospectively. There's a huge amount of old charges still to be claimed.
Even if there is a deal over future charges, it's hard to see how it can work retrospectively. There's a huge amount of old charges still to be claimed.
I think you're right. I don't think any mechanism exists to deal with past charges in the event of a deal or for that matter if the OFT win the test case and go onto prove the charges are unfair.
Look at this interview with FSA's Clive Briault, although the subject is mortgage exit fees he makes it clear that ''We don’t have the powers under the unfair contract terms to instigate a past business review''
Also any deal between the OFT and the banks on a level of charge will have to take into account the OFT's own threshold of £12 on credit card default charges. As the OFT seems to have swallowed the banks 'service charge' argument for current account defaults, the charge must have to be more than credit card defaults as with missing a credit card payment cannot be deemed as generating much of a service.
Q: How can a bank charge at £35 ever be justified as a 'service' rather than as a punitive charge. It offers nothing of benefit to the end user. In fact it can only be seen by any rational person as providing a disservice in so much as it puts them further in debt.
There is an argument that banks make that states they need the charges to rein in overspending customers. But this argument hold no merit either because all the bank has to do is disable the customers ability to spend by pressing a button or even automate the process. Every bank has the ability to WARM or HOT an account. WARM is when the ability to charge to an account is cut so that no more debit card transactions can be made, no more DD's can go out and no more cash can be withdrawn. HOT is the same but in the event you put your card in the hole-in-the-wall it is swallowed up. All this is possible without charging the end customer a bean - bank charges exist to profit from someone elses misery - to kick someone when they are down so to speak- any other agrument is a false.
There is definately a cost to running a current account: Based on an average of 10 cash withdrawals per month, 10 debit card transactions, 1 phone call and 3 internet visits, the unit cost is as follows:
CASH OUT x 10 = £3
10 DC TANSACT: = £0.50
1 phone call: £3.00
3 internet logins: 0.60
Total Cost to bank to run current a/c: £7.10 per month
I think most people who currently get hit for charges running into the 1000's per year - given the choice - would rather just pay the bank what it costs to run an account. In any case - because banks can make money on lending the deposited cash out and can cross sell to their customers - competition should mean that banks compete to offer the lowest fees or none at all - depending on how successful they are at profiting from their customer base. This is not happening currently. There is little or no competition among ANY banks let alone the big four. This is the main problem - and it is one that I hope the FSA and the OFT will solve.
In any case: Past bank charges were inheriently unfair and most probably illegal. The should be stopped immediately and an agreement on how much to return to customers should be reached. Any delay by the banks to move to a new charging model and keeping a hold on pipeline claims is only building up bigger problems down the line.
alecmac thats brilliantly put. I totally agree and have always thought, why do the banks still pay out when customer is at their limit - for profit of course. Where did you get your costings from?
The costings have been around for a while. You can usually make a case for a current account operational cost of anywhere from £5 to £25 depending on what factors you take into account. For instance: Do you include the cost of maintaining a branch network? Or is that a marketing expense? (in that it will bring in new custom).
How you calculate costings is missing the main point I suppose. The best way is probably to take profit directly and indirectly derived from retail operations and divide the figure by the number of customers at the bank and see how much profit is generated by each customer. A bank without customers is not much of a bank (as Northern Rock shows).
I find it incredible that banks see retail deposits as a cost overhead rather than the gift horse that they are. The attitude within banks (that customers are a cost) is changing. They now realise (or soon will) that they need to foster new customer relations in order to keep their deposit base. It is unlikely that bank charges (in their current form) will continue for much longer.
The FSA should probably try and kick start a bit of competition by making switching current accounts (even with an overdraft) very, very easy. They could also make communiction with customers regualtions sufficiently onerous so as to deter banks from charging overdraft fees. Advertising regulations should be impoved so as to allow the total cost of running an account to be clear to the consumer.......they have many, many tools at their disposal to push the banks in the right direction. It would greatly help matters when instant transfers are introduced, instead of the 3-5 day wait we have at the moment.
But the main thing they need to do is move now. If they sit around and wait, customer discontent will grow and grow at the expense of their brand. This will make it much easier for new entrants to come in and steal their pie in the years to come. The current situation of toying with the wording of new charges and putting claims for previous charges on hold is simply delaying the day of reckoning. By settling claims now and moving forward by engaging with their customers they will be able to prosper and win market share. The later banks start this process the worse they will fare.
''We don’t have the powers under the unfair contract terms to instigate a past business review''
I think what he means is that the FSA don't have the ability to force lenders, banks etc to proactively reach out and contact customers with refunds. No sane bank would ever agree to such a thing. But the FSA CAN rule that a certain level of charge was unfair and apply the ruling retrospectively (as with mortgage exit fees).
Just read the above transcript you posted CRFX. You could take almost every argument made by the FSA and replace 'mortgage exit fee' with bank charges and it would still make sense. Why has the FSA not followed the same procedure with bank overdraft charges?
The costings have been around for a while. You can usually make a case for a current account operational cost of anywhere from £5 to £25 depending on what factors you take into account.
Funny you should say that, I was thinking along the same lines the other day:
I was making an international bank transfer the other day. This involved filling in a long form, take it to the counter, where the chap got a check list out, checked every code and bit had been filled in properly, then phone someone to get an authorisation code for the transaction, photocopy 2 forms of ID, then fax it all through, wait for confirmation. The whole procedure probably took 15 - 20 mns (even allowing the guy was not very experienced, I can't see it taking less than 10 mns anyway), and for this, I was charged £20.
Assuming that I am being charged for a real service here (which I do not dispute), the bank is entitled to, and presumably is, making a profit on this transaction. At least 2 people have worked on that transaction, plus phone call/fax etc... Yet at £20, they are still making a profit.
How then is the habitual £30 - £35 fee for an automated letter going to fit into that scenario? :-?
Apologies to people who I was in the process of helping, I may be gone some time.
If claims are currently entered into court alleging Unfair Terms & Contracts.....
What would happen to a case where.....
A claimant does not dispute the contract and does not dispute the level of charges but claims that the 'service' which was paid for was not provided after a gas bill brought the claimant over their overdraft limit (for which there were charges of £35 - the payment was reversed and the gas bill was not subsequently paid and therefore the 'service' that was paid for was not provided.
I'd say not. Their "service" argument is based not on whether they pay out or not, but on the fact that the service provided is receiving the request, examining that request, deciding whther to honour the payment or not, actioning accordingly, and either way, they have provided the service. Don't look at me like that, that's their theory, not mine!
Apologies to people who I was in the process of helping, I may be gone some time.
How then is the habitual £30 - £35 fee for an automated letter going to fit into that scenario? :-?
Ahh but you havn't been listening to Angela Knight have you. Didn't you
know that a current account default triggers ''all sorts of manual interventions'' like ''complex judgemnt calls, credit checks and account
reviews'' ?
CRFX: So under the data protection act can I see copies of these complex judgement calls, credit checks and manual account reviews relating to my account? And I hope they recorded the supposed manual credit checks properly like they are supposed to.
Just going back to our chums at the FSA for a mo, during a session with
the Treasury Select Committee hearing Hector Sants said that ''naming and shaming firms'' was an ''important weapon in our regulatory armoury''.
Shame then that this weapon dosn't seem to have been issued to Clive Briault who refused to identify firms who had been missellingmortgage
endowments:
CRFX: So under the data protection act can I see copies of these complex judgement calls, credit checks and manual account reviews relating to my account? And I hope they recorded the supposed manual credit checks properly like they are supposed to.
Ahh but you havn't been listening to Angela Knight have you.
I try not to, as it is not good for my blood pressure. Sadly, I now recognise her voice from another room and my left eye starts twitching.
Didn't you know that a current account default triggers ''all sorts of manual interventions'' like ''complex judgemnt calls, credit checks and account reviews'' ?
Amazing how 18 months or so down the line, we are back to the auld "manual intervention" angle, which they had given up as a bad job, isn't it?
alecmac18Hmmmm - I see, tricky ones these banks.
Definition of service:
"work done by one person or group that benefits another"
Sooooooooo - where is the benefit to the end user in these 'service' arrangements?
Well, they save you the embarrassment of having your card declined at the checkout if they accept the transaction, and save you from going over your limit if they decline it. Yes, I know you are going to say that their charge then takes you over the limit, so what's the point, but hey, it's your fault for being irresponsible with your money, don't go blaming the bank for paying themselves for providing a service! No-one would be there if it wasn't for your irresponsible behaviour in the first place!
Apologies to people who I was in the process of helping, I may be gone some time.
What are you trying to say. lol. I've got no charges......but I know many who do, I see the effect and its not pretty.
All I'm saying is......lets take the DD example only and forget about bounced cheques and card payments. In paying a DD for 30 minutes, charging £35 and then reversing the DD so that the 'service' that was paid for does not produce any effect. I fail to see how you can translate this as a 'service'.
What A Week!
Ivestigation
Reply With Quote
Originally Posted by jansus
I've got no charges......but I know many who do, I see the effect and its not pretty.