Does your bank's defence say that the charges are to cover their admin costs?

[Gez]

I just wonder how many claims that are currently tied up in the system have a written defence from the bank that states that the charges are to cover their admin costs.

 

Given that this no longer their defence as we all know, & not the basis on which they are attempting to defend the oft case, I wonder if there is any way for someone, somehow, to lobby the OFT to force these cases to be examined rather than be swept under the carpet.

 

I think it is an absolute must that OFT should compare the old system of "to cover our costs" with the new system of "fees for a service" to see how/if they differ in terms of cause & action.

If these services generate a profit, and the cause & actions are operated no differently than before, then it would follow that their costs couldn't possibly be what they were charging, and they still have claims tied up where this is their written & signed defence..

[mattyb13]

I have a claim with Abbey which is stayed and the defence states that I broke my contract and the charges were to recover costs

[Bookworm]

My defence from Barclays says that it is to recover their costs too. Claim is stayed, and they didn't comply with courts direction as regards disclosure... When this claim gets unstayed, they're going to have problems!

[celebrity debtor]

although the following relates to GE storecards .....

 

35. GECF's application of fees and charges on store cards differs from that of many credit card issuers. Fees and charges are applied by GECF only to cover costs. GECF believes that many credit card providers apply late payment fees and over-limit charges to a much greater proportion of customers in any particular month than is the case for GECF and that for some of these providers fees and charges represent a significant source of net income20.

however the author has reason to believe that GE in fact did/do not charge default charges or overlimit fees ....? .... could someone verify this

 

the conclusion being that the the 'costs' are virtually nil

 

see

 

Store Card Credit Services - Initial Submissions - Responses from store card providers

 

GE Consumer Finance Limited

Document: submission from GE Consumer Finance Limited (pdf, 274kb)

initial_subs_providers_gecf.pdf

[Bookworm]

It's kind of irrelevant as this is for a store card and there is no argument that o/limit and late payment charges are for a breach of contract.

 

But yes, GE has always charged and still does, I don't know where the author's info has come from, but it's total nonsense. :-?

[celebrity debtor]

36 Consumers who borrow on credit cards are more likely to have fees and charges applied to their account during the life of an outstanding balance, compared with customers who borrow on a store card. Customers who use store cards typically make a payment five days late on the account 1.11 times each year21. As credit card fees for late payment are approximately £2022 this same repayment behaviour would, on average, cost a typical customer £22.20 per year on a credit card and nothing on a store card.

section 36 backs up what was suggested in section 35

of a formal document submitted by ge in 2004 which confirms that the cost to GE is actually virtually nil !!

[Gez]

Sorry, no offence, but I'm really just talking about bank charge claims here. Only those that are relevant to the OFT test case, or not as the case may prove.

 

What I'm trying to get at here is that these cases should not be overlooked in this test case. The OFT are trying bankers only on the basis of their existing terms & conditions & this ridiculous "fee for a service" goose chase.

 

What I'd like to get accross to the OFT is that if this is to be a "test case", these are real cases currently in litigation, so test them!

If, as claimed by the OFT, BBA, FSA, GBH e.t.c. that this test case has come about due to the overwhelming & unprecidented consumer litigation, in order to establish the legalities once & for all, then damn well test some real cases and examine the defence for these cases that are currently being defended on the basis that the charges are to cover costs.

 

Or just be a good little OFT & sweep them under the carpet & save the bankers the burden of having to answer to this..

[celebrity debtor]

the point i was trying to get over was that relating to storecards GE told the competition commission in 2004 to quote section 35

"Fees and charges are applied by GECF only to cover costs."

however in section 36

they say "and nothing on a store card. " meaning they do not apply late fees and overlimit fees to storecards -- this has been checked out and found to be correct.

 

the obvious conclusion is that the costs are extremely small indeed hence they make no charge.

 

Now it does seem reasonable that admin charges for overlimit default charges and late payment fees for a storecard credit card are of a similar order to the admin charges to cover the banks costs regarding a bank account.

The aim of the post was to suggest that the admin costs by GE's own admission are very negligable and not £12 and that banks admin costs HSBC etc are of a similar order in tending to zero

 

hope this makes it clear the point of the posting

[BigNick2]

the point i was trying to get over was that relating to storecards GE told the competition commission in 2004 to quote section 35

"Fees and charges are applied by GECF only to cover costs."

however in section 36

they say "and nothing on a store card. " meaning they do not apply late fees and overlimit fees to storecards -- this has been checked out and found to be correct.

 

the obvious conclusion is that the costs are extremely small indeed hence they make no charge.

 

Now it does seem reasonable that admin charges for overlimit default charges and late payment fees for a storecard credit card are of a similar order to the admin charges to cover the banks costs regarding a bank account.

The aim of the post was to suggest that the admin costs by GE's own admission are very negligable and not £12 and that banks admin costs HSBC etc are of a similar order in tending to zero

 

hope this makes it clear the point of the posting

 

 

Are you saying they were found to be correct in stating that they don't apply late playment fees on store cards? Ive got a GE store card with a few hundred pounds of charges on it, so dont know how they can say that?

[tifo]

i have a store card through GECF and they DO charge the usual £12.

[Bookworm]

they say "and nothing on a store card. " meaning they do not apply late fees and overlimit fees to storecards -- this has been checked out and found to be correct.

But it is NOT correct, as everybody is telling you. GE does levy charges, always has, and still do! :-?

[tifo]

my latest statement for Jan 08 (Asda storecard run by GECF) states that a £12 will now be charged for late payments, but they've always charged that anyway. I've been charged a few times in the past.

[Gez]

Ok point taken. Back to the topic of the thread though, if you have got a claim tied up in the system, what is the written defence from your bank?

 

How many people have a claim in the system that has been stayed pending the outcome of the test case, where the written defence is that the charges are to cover costs? Which bank is it?