FSA and Hardship

**yourbank** · 29th June 2008 14:21

Hope this is the right place to put this discussion but please feel free to move it if it is required. There is reports on other bank charges forums that the FSA are proposing that hardship is defined as incurring £500 worth of charges. The banks are looking at alternative approaches.
Two questions really,
1) How is hardship defined NOW?
2) Is £500 too high or too low a figure that is being proposed?

Similar Threads:

**JOSH_IOU** · 29th June 2008 14:41

i pulled this off one of the forums but not sure if we can name which one.

The category of benefit that the Claimant is receiving is deemed as inalienable under the Social Security Administration Act 1992 (s.187) which states as follows:

187.—(1) Subject to the provisions of this Act, every assignment of or charge on—
(a) benefit as defined in section 122 of the Contributions and Benefits Act;
(b) any income-related benefit; or
(c) child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of a beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors.

In addition the claimant relies on the principles of

Woods v. The Royal Bank of Scotland 1913 1 S.L.T. 499

"A weekly payment, or a sum paid by way of redemption thereof, shall not be capable of being assigned, charged, or attached, and shall not pass to any other person by operation of law, nor shall any claim be set-off against the same."

**yourbank** · 29th June 2008 14:48

The problem with a definition of hardship is the problem of defining whether it is specifically JUST for someone on benefit or whether someone working and picking up even two charge a month could be classed as being in hardship.
The definition of £500 would have that effect.

**JOSH_IOU** · 29th June 2008 14:52

You would have to look at the scale of the debt.

What I mean by that is the way the debt helping companies work.

They look at how many creditors you have and then look at how much you owe to each.

But as for the £500 claim this sounds like a way to sift through cases fast.

**veester** · 30th June 2008 10:06

That's a bit harsh....i have incured about £75 to £150 per month for the last year.

I know no longer have enough money to pay my bills/fuel to get to work
The bank is not listening to evidence of illness (i am writing to the fos icon

)
I am opening a parachute account icon

That's to the tune of over £1500.....thats caused me hardship!!!!

**woodwa5** · 30th June 2008 13:35

I know what you mean mate. I was incurring charges up to £850 per month and lost my house as i couldn't pay the mortgage icon

......that's caused me real hardship

**MARTIN3030** · 30th June 2008 17:40

The guidance for this can be so confusing.In applications to lift stays using the hardship arguement,some defence teams are arguing that allowing the claim to continue would not in itself solve the debt problems of the claimant.

Insofar as guidance from the FSA goes-they make clear that if the account holder fails to get a response from their bank after making a request using the harship arguement-then they should contact the Banking Code icon

to complain...and only THEN if there is still no satisfaction to contact the fos icon

.The last update to the sites advice and guidance was 30th.May.

**JOSH_IOU** · 30th June 2008 17:46

HI Martin yes it certianly is confusing.

And the defence would be half correct.

If the court ruled in favour of the claimant on the grounds of hardship then wouldnt the claimant have case law to support other hardship cases in cases with other creditors?

Just a thought...

**yourbank** · 30th June 2008 18:00

I should point out that what I have tried to get some discussion on is the idea that the FSA when considering to prolong the waiver icon

will try to define cases for hardship on the basis of £500 worth of charges a year, rather than a wishy washy concept that no one can find out what THEY(FSA) actually consider to be hardship. That could be said to be easy to get to, ie 2 charges a month. With regards to the court aspect, the FSA issue was not in my thinking at all. Hope that clarifies the point I made on post one.

**veester** · 1st July 2008 12:52

Woodwa5...Sorry to hear of your troubles, i can sympathise...My parents (and me at the end of the day) lost there house and business in 1992 following the then interest rates and RIP off charges.

It was heart wrenching to see them go through that....they struggled against the charges for years, until it all became to much.

I don't have a lot of sympathy or wamrth towards bankers/repo-men/ and those who use "government auctions" and insider information to sell repo'd houses at undervalue - They are leeches (i'll get off my soap box now!!!)

I think most banks a greedy pigs who have forgetten the difference between STAKEHOLDER AND SHAREHOLDER value.

Back the point....
Ah ok - £500 per year..Thanks for clarifying Yourbank.

It's an interesting point you raise about defence teams MARTIN3030; and the point you raise is exactly what i am going through with my other creditor, in particular the SLC. I am solving the debt issue, in fact it is well on its way to be solved if it was not for the charges.

The bank is clearly onto a good thing and has a policy that knows it;
ME "Bank, i need another £200 on my £1000 overdraft icon

to cover my bills, as you can see i have gone over by this much for the last 2 months"
BANK: "No"
ME: "Why?"
BANK: "Because of internal blah blah"
ME: "What?"
BANK: " We can't tell you"
ME: "So, you allow me to destory my credit rating, leech my bank account through charges...on a premise you cannot explain or justify??? It's because you know you provide an essential service and can extort money."
BANK: "Quiet"

With respect to the SLC, I am asking for relief under Section 9 of the Loans Regulations.

So we'll see

**tawnyowl** · 9th July 2008 20:43

Good move starting this thread.
Am in business -just.
Been to court for repo managed to get suspended only because of help on here.
Living from week to week-praying that i make the months mortgage icon

payment.
Food-one slice of bread in house other day.
Debts- taken to court more times than the Maxwell brothers.
Will not give in-fight to the bitter end-with help given on this site.
Just want this case finished and won for the ordinary people and business people.We deserve nothing else.
I have 900 pound charges on Abbey icon

business account and other charges on ordinary accounts.Hope it all ends soon even if only to reduce debts.
I know there are many people in the same boat-feel it will start leaking knowing our luck.
Thank god for the people who started Consumer Action Group.
And for the people who offer advice.
Good luck to everyone lets hope it is all over soon.Tawnyowl.
Hope this is on right thread it felt right.

**woodwa5** · 10th July 2008 11:08

tawnyowl,
you do know the court case doesn't cover business accounts don't you? if you didn't you need to claim on that asap

**indebtstudent** · 10th July 2008 17:22

I don't have a clue what hardship is defined as, but then again I haven't really researched this.

What I do know is that the overwhelming majority of the customers I see who ask for charges to be refunded get more than one because of the way the system works.

It can be as long as two months after the charge is incurred that it comes out, and this can take you overdrawn. You get billed again for an unauthorized overdraft icon

(even though the bank, at least on some level MUST have authorized it).

The other alternative is that the bank puts charges on straight away which makes it harder to bring the account back under the limit.

I am sceptical that the FSA is really bothered about looking after the vulnerable. There again what is the FSA actually good at?

Thier logo is quite easy on the eye, little else springs to mind.

**abroadgirl** · 10th July 2008 20:14

hello im not to sure if this is the correct thread for my post but here is where i am up to on the grounds of hardship ty abroadgirl

.....

**abroadgirl** · 10th July 2008 21:10

Dear xxxxxxx

YOUR COMPLAINT ABOUT Abbey icon

XXXXXXXXXXXXXXXXXXXXXXXX

Thankyou for your recent letter received in respponse to my emails dated 15/16th april 2008.

I have considered the additional information you have supplied but even after taking it into account I still consider it unlikely that more investagation would result in a different outcome.

I say this for the following reasons:

. My understanding is that you are seeking compensation as you believe that the bank closed your account in retaliation to your claim for a refund of bank charges.
In light of this I have made futher enquires.

The bank has now responded to us the bank says that your account was closed in june 2007 when it was reffered to its debt recovery dept in respect of an ourstanding overdraft icon

of £329-75. the bank says that the debt had been these circumstances since feb 2007 and you had not made any payments to it in these circumstances I am persuaded that the bank closed your account due an outstanding unpaid debt rathen than in retaliation to your claim for a charges refund as such I am unable to uphold your complaint in this reguard.

I futhure understand that you think the bank should refund the charges you dispute as you Meet the criteria for finacial hardship in this regard I should explain that neither the bank nor this service dispute the financial difficulties you are currently experiencing however this does not mean that the bank is oblidged to refund the charges you have disputed ahead of the finall outcome of the current legal proceedings relating to bank charges.

Having said this the Banking Code icon

requires that banks should treat customers in finacial difficulty postively and sympathetically so I have considered whether or not this has happened in your case.

In this regard the bank has told us that it has looked at your complaint about financial hardship however it does not accept that it is under any obligation to do any more than it has at this stage.
Having considered the position very carefully I am inclined to agree with the banks assessment I say this because the bank has told us that your account has veen suspended and it is currently not pursuing you for the outstanding debt as such the bank appears to be meeting its obligation under the banking code.

For the reasons stated above I think its approopiate for your complaint to remain on hold probably untill the legal position has been clarified however if you disagree please contact us by 8 july 2008 to expleain your postion

If you have not responded by this date I will assume that you are satified that your complaint about the charges applied to your account will remain on hold until the legal next steps have been sorted out.
You do not need to do anything else right now. We will be intouch with you when we have news to report.

END

Now for my comments to this letter……..
1. letter sent to sandra greene aplogising for the delay due to health and being in hosp with a servere angina attack………………………………………….
2. yes my bank account was closed without me getting any word to tell me they were closing my account. None of the debt recoveries would take on there case due to court proceedings and that the fact was/is these charges were for the same item cheque for £250 pounds my dissability went in the day after, the chatrges for this went on to feb march april may untill they closed my accdount 26 june 07, each month they were repeated charges that’s how they got the total to the amount they are speaking about, I stopped my dissability and moblity going in as they were taking charges out and I had enough of them leaving me with nothing to live on, one week they left me £1 to live on for the 2 weeks I went in crying and told them what has happened and they said sorry but they cannot do anything the lady still works there.
3. they have admitted hardship
4. they did not treat my case with sympathy at all.
5. the is not so the debt recoveries don’t want to handle there case with this they told me they were having nothing to do with it as I have said I spoke to he said that abbey were wrong in repeating the said charges for the same cheque…..
6. here are the dates 9th jan cheque £250 9th jan unpaid cheque £250 11th jan bal carried forward to next statement £124.75 feb-march –april2nd unauth o/d fee £20 2nd april clearence fee £20 april 2nd clearence fee £30 april 2nd clearence fee £30 april 2nd clearence fee £30 april 2nd clearence fee £30 2 april fee £30 unpaid d/d 2nd april £35 2nd april interest charge 38p 2nd april AGAIN £35

A/C Balance £295.73-
Available £295.73-

Same cont charges……….
April 11th 12 may
Balance brought forward from prev statement £295.73
3rd May charge £20 not authorised
3rd may interest £1-19
Balance brought forward £316-92

May june toal charges up to closing account
Bal brought forward £316.92
Interest £6.02 = £322.94

I wrote oro abbey on the 14th and 19th july 07
To close my account as I knew then it was repeated charges from the 9 jan cheque £250.

------------------------------- merged -------------------------------
Dear xxxxxxx

YOUR COMPLAINT ABOUT ABBEY XXXXXXXXXXXXXXXXXXXXXXXX

Thankyou for your recent letter received in respponse to my emails dated 15/16th april 2008.

I have considered the additional information you have supplied but even after taking it into account I still consider it unlikely that more investagation would result in a different outcome.

I say this for the following reasons:

. My understanding is that you are seeking compensation as you believe that the bank closed your account in retaliation to your claim for a refund of bank charges.
In light of this I have made futher enquires.

The bank has now responded to us the bank says that your account was closed in june 2007 when it was reffered to its debt recovery dept in respect of an ourstanding overdraft of £329-75. the bank says that the debt had been these circumstances since feb 2007 and you had not made any payments to it in these circumstances I am persuaded that the bank closed your account due an outstanding unpaid debt rathen than in retaliation to your claim for a charges refund as such I am unable to uphold your complaint in this reguard.

I futhure understand that you think the bank should refund the charges you dispute as you Meet the criteria for finacial hardship in this regard I should explain that neither the bank nor this service dispute the financial difficulties you are currently experiencing however this does not mean that the bank is oblidged to refund the charges you have disputed ahead of the finall outcome of the current legal proceedings relating to bank charges.

Having said this the banking code requires that banks should treat customers in finacial difficulty postively and sympathetically so I have considered whether or not this has happened in your case.

In this regard the bank has told us that it has looked at your complaint about financial hardship however it does not accept that it is under any obligation to do any more than it has at this stage.
Having considered the position very carefully I am inclined to agree with the banks assessment I say this because the bank has told us that your account has veen suspended and it is currently not pursuing you for the outstanding debt as such the bank appears to be meeting its obligation under the banking code.

For the reasons stated above I think its approopiate for your complaint to remain on hold probably untill the legal position has been clarified however if you disagree please contact us by 8 july 2008 to expleain your postion

If you have not responded by this date I will assume that you are satified that your complaint about the charges applied to your account will remain on hold until the legal next steps have been sorted out.
You do not need to do anything else right now. We will be intouch with you when we have news to report.

END

Now for my comments to this letter……..
1. letter sent to sandra greene aplogising for the delay due to health and being in hosp with a servere angina attack………………………………………….
2. yes my bank account was closed without me getting any word to tell me they were closing my account. None of the debt recoveries would take on there case due to court proceedings and that the fact was/is these charges were for the same item cheque for £250 pounds my dissability went in the day after, the chatrges for this went on to feb march april may untill they closed my accdount 26 june 07, each month they were repeated charges that’s how they got the total to the amount they are speaking about, I stopped my dissability and moblity going in as they were taking charges out and I had enough of them leaving me with nothing to live on, one week they left me £1 to live on for the 2 weeks I went in crying and told them what has happened and they said sorry but they cannot do anything the lady still works there.
3. they have admitted hardship
4. they did not treat my case with sympathy at all.
5. the is not so the debt recoveries don’t want to handle there case with this they told me they were having nothing to do with it as I have said I spoke to he said that abbey were wrong in repeating the said charges for the same cheque…..
6. here are the dates 9th jan cheque £250 9th jan unpaid cheque £250 11th jan bal carried forward to next statement £124.75 feb-march –april2nd unauth o/d fee £20 2nd april clearence fee £20 april 2nd clearence fee £30 april 2nd clearence fee £30 april 2nd clearence fee £30 april 2nd clearence fee £30 2 april fee £30 unpaid d/d 2nd april £35 2nd april interest charge 38p 2nd april AGAIN £35

A/C Balance £295.73-
Available £295.73-

Same cont charges……….
April 11th 12 may
Balance brought forward from prev statement £295.73
3rd May charge £20 not authorised
3rd may interest £1-19
Balance brought forward £316-92

May june toal charges up to closing account
Bal brought forward £316.92
Interest £6.02 = £322.94

I wrote oro abbey on the 14th and 19th july 07
To close my account as I knew then it was repeated charges from the 9 jan cheque £250.

Sorry its taken so long I still cannot get scanner to work I have typed this out..
Tyvvm hugs
abg

**yourbank** · 10th July 2008 21:18

"Having said this the Banking Code icon

requires that banks should treat customers in finacial difficulty postively and sympathetically so I have considered whether or not this has happened in your case.

In this regard the bank has told us that it has looked at your complaint about financial hardship however it does not accept that it is under any obligation to do any more than it has at this stage.
Having considered the position very carefully I am inclined to agree with the banks assessment I say this because the bank has told us that your account has veen suspended and it is currently not pursuing you for the outstanding debt as such the bank appears to be meeting its obligation under the banking code."

This is the most interesting part of the email. I wonder whether if the bank after having been told that an account is in dispute icon

(maybe not hardship) and then goes after the alleged debtor(term of phrase) is in breach of its obligations under the banking code.

**jansus** · 10th July 2008 22:24

yes thats how i read it - the fos icon

are not under obligation to ask the bank to repay the charges - but they are saying in this case they (Abbey)are right not to chase for the debt or charge interest on the debt caused by the charges during the time of the waiver icon

.

Unfortunately they are not consistant as in other cases they have persuaded the bank to repay the charges in hardship cases.

If the waiver is not lifted at the next review I think it is vital to get this term of the waiver clarified - in other words - ironically -write it in PIL!!!

**JOSH_IOU** · 10th July 2008 22:36

I dont think we should wait that long

**yourbank** · 10th July 2008 22:38

Rapster, FSA review of that waiver should be by the end of July as they stated way back in November, I think, or was it just after the test case? Please someone refresh my memory.

**jansus** · 10th July 2008 22:58

as far as i know end of july

There have already been letters written to them about this condition of the waiver icon

and replies recieved.

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