The OFT Case

[HSBCrusher]

Herewith extract from BBC website :-

 

 

The RBS NatWest bank is planning to refund overdraft fees to customers "pro-actively" if it loses the continuing test case over bank charges.

An internal bank document reveals for the first time the preparations banks are making should they lose their case.

The document acknowledges the group may have to refund past charges, which could run to many millions of pounds.

The bank said it was just drawing up contingency plans to deal with one possible outcome of the test case.

Refunds

The RBS NatWest is waiting, with seven other banks, for an Appeal Court judgement on whether or not the Office of Fair Trading (OFT) can decide if their overdraft charges are unfair.

All customer accounts that are due a refund will be calculated as accurately as possible

 

 

RBS/NatWest

 

 

The bank document, passed to the BBC, indicates that many customers can expect refunds if the banks eventually lose their case.

It says a team from the bank is "preparing systems and processes to pro-actively refund charges to the group's customer base."

The bank currently has about 13 million customers, though not all will have been charged overdraft fees in the past few years.

"All customer accounts that are due a refund will be calculated as accurately as possible," the bank document says.

"Any monies will be accurately accounted for and reconciled," it adds.

The document says the bank aims for "avoidance of group reputational damage and/or loss of funds."

Contingency plan

An RBS spokesman denied the bank was planning to throw in the towel if it lost the current appeal.

He said its plans simply reflected the fact that it was obliged by the Financial Services Authority (FSA) to deal "efficiently and swiftly" with the customers' complaints if it eventually lost the legal argument.

"This work stream has absolutely no bearing on how we see the outcome of the test case," he said.

"With an organisation of our size and our different brands, complying with these requirements demands careful contingency planning and this document merely confirms that RBS is taking its obligations in this respect seriously as it has done throughout the whole test case process," he added.

Sharon Coleman of the campaign group Legal seagulls said: "We would welcome a pro-active approach if they intend resolving the matter without further appeals."

"Consumers have become increasingly frustrated by the apparent lack of progress in the test case, especially those affected by financial difficulty," she added.

Unfair?

For the past three years the UK's banks have been besieged by hundreds of thousands of angry customers aided by high-profile internet and media campaigns.

The customers have been demanding the return of high charges, levied by the banks whenever customers go overdrawn without permission.

In 2007, eight financial institutions and the OFT agreed to stage a test case in the High Court to resolve the legal issues.

At that point all cases in the county courts, and with the Financial Ombudsman, were suspended.

The first round of High Court hearings, earlier this year, was a defeat for the banks.

Mr Justice Andrew Smith ruled that the Office of Fair Trading (OFT) had the power, under the 1999 Unfair Terms in Consumer Contracts Regulations (UTCCR), to decide if the banks' charges were fair or not.

A subsequent appeal was heard in October and the judgement is now expected in the New Year.

An analysis of the 2007 annual reports for the five biggest banks suggested that up until the summer of that year, all UK banks had between them paid out £784m in refunds to nearly 378,000 customers.

 

mmm, you missed the best bit at the end of the article..

 

Marc Gander of the Consumer Action Group (CAG) said that it was worrying that RBS NatWest was planning to take its own responsibility for calculating its customers' losses.

"We will be watching this very closely. The banks have shown that they are not to be trusted," he said.

"We will be encouraging all bank customers to calculate their own losses and to insist on getting all of it back plus interest."

[yourbank]

Some things never change

[sacerdos]

Just really trying to catch up on things here but if the automatic stay on court rulings now runs to 26th January 2009, can we expect a decision on the Test Case Appeal to filed before then or are we looking at another probable extension?

[mailmannz]

The ending of the stay isnt a good indicator for when we can expect to have a judgement (ie. banks arent actually above the law when it comes to dealing with their customers!).

 

Expect the stay to roll indefinately until the case is concluded, some time in 2020!

 

Mailman

[car2403]

Just really trying to catch up on things here but if the automatic stay on court rulings now runs to 26th January 2009, can we expect a decision on the Test Case Appeal to filed before then or are we looking at another probable extension?

 

Or, we'll see the Courts dismissing claims based on Claimants not contacting them, assuming they are "in the know" about the appeal status of the TC.

 

I only say this because this just happened to me. (Mine should be reinstated in the next few days, fingers crossed!)

 

If you've been stayed, check the Court Order and comply with it by writing to the Court to ask for the stay to be lifted/extended, or face having your claim dismissed.

[Aequitas]

The extract from the BBC website quoted above contains serious misinformation. It is not true that the first round of High Court hearings was a defeat for the banks. It was a 1-1 draw.

 

The banks won on the question of whether or not their charges were contractual penalties, at least according to their current terms. I quote from the judge's conclusion:

 

As for the position at common law, I accept the Banks' submission that none of the terms which I have considered (the terms now generally used by the Banks for personal current accounts other than basic accounts and also certain of the terms used until recently by Clydesdale and RBSG) could be unenforceable on the grounds that they are penal (paragraph 323 above).

 

The OFT did not win on whether it had the power to decide that the charges were fair or not under the UTCCR - only the court has that power. The only power the OFT has under the UTCCR is to apply to the court for an injunction to prevent the continued use of unfair terms. The point that was won was that the banks' terms are subject to assessment as to fairness under Regulation 6 (2). Once again I quote from the judge's conclusion:

 

I reject the Banks' contention that the Relevant Terms are exempt from assessment as to fairness under Regulation 6(2) of the 1999 Regulations (paragraph 421 above). This does not mean that the Relevant Terms are necessarily to be regarded as unfair under Regulation 5(1) or that they are not binding upon consumers under Regulation 8(1): those are not questions for me to decide in this judgment.

 

The present state of play is quite clear: no court has yet decided that bank charges are (a) contractual penalties or (b) unfair under the UTCCR. It is though the case that we know that the current terms are not contractual penalties and it follows from this that any non-current terms that are to the same effect must also not be contractual penalties.

 

So what would be your position if your case were heard by a County Court judge tomorrow? On contractual penalties the only guidance the court will have is the decision referred to above so you will not get far with that unless the term you complain of is substantially different from any current term and the court considers it penal. On the UTCCR the Court will have no guidance. Since the court will have no guidance its decision may go against you. If you lose, how will you feel if a higher court later decides that the very term you contested was in fact unfair, given that you cannot have your case retried? Will you regret not waiting?

 

Finally, can we please knock on the head any idea that the fact that banks have refunded charges says anything about what the law is?

[Bigmac versus]

Aequitas the real issue was LOST by the banks, (make no mistake) this is why there is currently an appeal. The only people who would claim they didnt lose would be ardent supporters of the banks of which you are one.

 

Finally, can we please knock on the head any idea it was a draw as you know fine well what was the important issue.

[Aequitas]

Just because I happen to believe the law favours the banks does not mean I support the banks. The law is not my fault. I say it as I see it.

 

The problem I have here is that, in my view, bank customers and consumer groups occupy the moral high ground, but the legal low ground. The approach has been wrong. There has been an insistence that victory can be achieved by using the existing law, when there should have been a campaign for change - not necessarily in the law (which would have problems) but in the banks' practice. All it needed was for one bank to break ranks under pressure or in the hope that it could steal a march on its competitors. It is regrettably forgotten that the inequity in the system partly arises because those in debit finance banking services for those in credit and that free-if-in-credit banking came about as a result of consumer pressure.

 

Look what happened with contractual penalties. Someone somewhere suggested that they might come into it. The idea was siezed on with relish and became an article of faith. It was discussed knowledgeably at bus stops. When Mr Justice Smith pulled the rug from under the feet of all the faithful and ruled that bank charges were not contractual penalties it was blithely asserted that they were never really an issue. Excuse me! I still bear the scars of my first foray into that issue on this site.

[Bigmac versus]

Just because I happen to believe the law favours the banks does not mean I support the banks. The law is not my fault. I say it as I see it.

 

So do I.

 

The problem I have here is that, in my view, bank customers and consumer groups occupy the moral high ground, but the legal low ground. The approach has been wrong. There has been an insistence that victory can be achieved by using the existing law, when there should have been a campaign for change - not necessarily in the law (which would have problems) but in the banks' practice. All it needed was for one bank to break ranks under pressure or in the hope that it could steal a march on its competitors. It is regrettably forgotten that the inequity in the system partly arises because those in debit finance banking services for those in credit and that free-if-in-credit banking came about as a result of consumer pressure.

 

A campaign for change would not return earlier charges and would have had no success IMO, banks stick together and none of them would have broken rank, the same could be said right now but are any of them breaking rank? snowballs chance in hell.

 

Look what happened with contractual penalties. Someone somewhere suggested that they might come into it. The idea was siezed on with relish and became an article of faith. It was discussed knowledgeably at bus stops. When Mr Justice Smith pulled the rug from under the feet of all the faithful and ruled that bank charges were not contractual penalties it was blithely asserted that they were never really an issue. Excuse me! I still bear the scars of my first foray into that issue on this site.

 

Obviously they were used but they were never the main point of any argument, but you know better eh, and as far as bus stops went I never heard such a thing being discussed.

[Bookworm]

And by gum, have you been ramming it down our throats ever since...

 

However, because Mr Justice Smith found it so may be unfortunate for the likes of us, but may I remind you that if the test case hadn't been precipitously put together, we could very well by now have had a very different outcome? In case you don't know, or have forgotten, cases were being pushed into Mercantile and there were judges there (whose name escape me now ) who if they had had their chance, would very likely have gone for very different findings. It is not a coincidence that the banks were settling these cases ahead of any other without argument, as they were very aware the outcome could have been very different.

 

So yes, this judge who found in favour of the banks may well have now created precedent, but it is unfortunate the OFT didn't see fit to appeal on that basis. For starters, having the Court of Appeals confirming his judgment would have helped appeasing the fears that this was just unfortunate it was this judge on this case.

 

Please remember that for one Justice Smith who found there was no penalty, there are plenty more who would have found different. In the same manner, we have seen county court judges finding one way, some another.

 

I'll add one more thing: From day one, you have said that your opinion was right because you were a lawyer and we were wrong because we weren't and didn't know what we were talking about. I just thought I would point out that the people who have led this crusade from the start were or are people well versed in the law at various levels: Bankfodder, Stephen Hone, Mike Dailly (Scotland), and I believe Bob Egerton too, and they didn't just make their argument up out of thin air.

 

[2p]

[Stornoway]

Aequitas

 

I agree that sometimes people can get carried away with believing what they want to believe. IMO the whole problem comes back to the greed of the banks - theyve been "screwing" the consumer big style over the last few years.

 

I moved abroad last year and I cant believe the difference in the way people are charged here for various penalties - €11 for a parking ticket (£35+ in the UK), €45 for a speeding fine (£100 in the UK), €8 for a bank charge (UK £40). In Britain we just seem to be ripped off left right and centre. However I acknwledge that there is a big difference between feeling that you have been ripped off and actually being able to prove that you have been legally disadvantaged (for want of a better phrase !)

 

I have a lot riding on a successful outcome of the test case (£15k in all) and would be genuinely interested to hear your view on what the eventual result will be.

 

Cheers

[Aequitas]

Please explain then what the argument is based on. It is presumably the UTCCR regulations. Which of the following "indicative and non-exhaustive list of terms which may be regarded as unfair" do you think apply to bank charges? If none, what terms would you consider come within the regulations despite not being included in the list? Please also explain how business customers will be helped since the UTCCR do not apply to them? Are they to be left out? (Please remember that you are not allowed to use the word "penalty" in your answer.)

 

INDICATIVE AND NON-EXHAUSTIVE LIST OF TERMS WHICH MAY BE REGARDED AS UNFAIR

 

 

 

Terms which have the object or effect of-

• (a) excluding or limiting the legal liability of a seller or supplier in the event of the death of a consumer or personal injury to the latter resulting from an act or omission of that seller or supplier;
   
  (b) inappropriately excluding or limiting the legal rights of the consumer vis-à-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations, including the option of offsetting a debt owed to the seller or supplier against any claim which the consumer may have against him;
   
  © making an agreement binding on the consumer whereas provision of services by the seller or supplier is subject to a condition whose realisation depends on his own will alone;
   
  (d) permitting the seller or supplier to retain sums paid by the consumer where the latter decides not to conclude or perform the contract, without providing for the consumer to receive compensation of an equivalent amount from the seller or supplier where the latter is the party cancelling the contract;
   
  (e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;
   
  (f) authorising the seller or supplier to dissolve the contract on a discretionary basis where the same facility is not granted to the consumer, or permitting the seller or supplier to retain the sums paid for services not yet supplied by him where it is the seller or supplier himself who dissolves the contract;
   
  (g) enabling the seller or supplier to terminate a contract of indeterminate duration without reasonable notice except where there are serious grounds for doing so;
   
  (h) automatically extending a contract of fixed duration where the consumer does not indicate otherwise, when the deadline fixed for the consumer to express his desire not to extend the contract is unreasonably early;
   
  (i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;
   
  (j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;
   
  (k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;
   
  (l) providing for the price of goods to be determined at the time of delivery or allowing a seller of goods or supplier of services to increase their price without in both cases giving the consumer the corresponding right to cancel the contract if the final price is too high in relation to the price agreed when the contract was concluded;
   
  (m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;
   
  (n) limiting the seller's or supplier's obligation to respect commitments undertaken by his agents or making his commitments subject to compliance with a particular formality;
   
  (o) obliging the consumer to fulfil all his obligations where the seller or supplier does not perform his;
   
  (p) giving the seller or supplier the possibility of transferring his rights and obligations under the contract, where this may serve to reduce the guarantees for the consumer, without the latter's agreement;
   
  (q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.
  

[Bigmac versus]

Ok Aequitas your right and were all wrong.

 

HOPE YOU WILL BE AROUND WHEN THIS COMES OUT OR WILL YOU CHANGE YOUR TUNE THEN.

[Aequitas]

I agree that sometimes people can get carried away with believing what they want to believe.

 

You can say that again.

 

I agree that sometimes people can get carried away with believing what they want to believe.

 

Thank you!

 

I repeat what I have said before and that is that I am not so arrogant a lawyer that I think that non-lawyers are incapable of understanding or discovering the law or that they cannot come up with ideas that confound the lawyers. Even so, I think it is important that non-lawyers realise that if they are not careful they may overreach themselves. Lawyers can overreach themselves. Every time I join this thread I hesitate as the questions being asked are not within my area of expertise.

 

IMO the whole problem comes back to the greed of the banks - theyve been "screwing" the consumer big style over the last few years.

 

We agree on that.

 

I moved abroad last year and I cant believe the difference in the way people are charged here for various penalties - €11 for a parking ticket (£35+ in the UK), €45 for a speeding fine (£100 in the UK), €8 for a bank charge (UK £40). In Britain we just seem to be ripped off left right and centre.

 

You do not say where you live, but if like me you live in Spain I do not think you can compare the two since incomes are lower here.

 

However I acknwledge that there is a big difference between feeling that you have been ripped off and actually being able to prove that you have been legally disadvantaged (for want of a better phrase !)

 

The very point I keep trying to make.

 

I have a lot riding on a successful outcome of the test case (£15k in all) and would be genuinely interested to hear your view on what the eventual result will be.

 

I really have no idea. I hope that the court will find an ingenious answer, but I am not optimistic.

[Aequitas]

Ok Aequitas your right and were all wrong.

 

Let's get this straight. I am not insisiting I am right. I put forward what I hope are cogent legal arguments for my point of view after careful consideration. If anyone comes forward to refute my views with legal argument I shall consider carefully what they say and if I am persuaded to their point of view will readily concede ground. This is all about the law. All I seem to get is people repeating mantras they cannot back up with legal argument. People disappear when I ask difficult questions.

 

HOPE YOU WILL BE AROUND WHEN THIS COMES OUT OR WILL YOU CHANGE YOUR TUNE THEN.

 

I shall be more than happy if all this goes against the banks. But I am genuinely concerned for all those bank customers who, having been led to believe that the law was clearcut and on their side, will be bitterly disappointed if it goes in favour of the banks. Who is going to apologise for having misled them? Who is going to refund the court fees they paid?

Edited December 3, 2008 by Aequitas

[photoman]

However, because Mr Justice Smith found it so may be unfortunate for the likes of us, but may I remind you that if the test case hadn't been precipitously put together, we could very well by now have had a very different outcome? In case you don't know, or have forgotten, cases were being pushed into Mercantile and there were judges there (whose name escape me now ) who if they had had their chance, would very likely have gone for very different findings. It is not a coincidence that the banks were settling these cases ahead of any other without argument, as they were very aware the outcome could have been very different.

]

 

It was Judge Mackie.

 

See here:

 

BBC NEWS | Business | Judge warns 'unreasonable' banks

 

I was actually one of the 300 cases referred to in the article as transferred to his mercantile court...... and funnily enough the banks then settled a few days later, rather than let it proceed on for his scrutiny !!

 

My settlement was for all the charges, interest thereon, plus statutory interest.

I had actually initially claimed for contractual interest, and so I was half minded at the time to actually still let my case continue to trial, which would have meant the issues of the claim be determined first (with disclosure being ordered as routine) before the consideration of which applicable interest .... but then news of the impending OFT case came out, and rather than risk enduring a long stay, or be subjected to to the outcome of the OFT's shoddily handled case, I decided to accept.

 

A close call I think !!

[Aequitas]

And by gum, have you been ramming it down our throats ever since...

 

Considering what I have been subjected to on this issue I think my posts have been very restrained. They may not come across as restrained because I go against the majority and it is easy to take something that goes against your view as unrestrained. If, despite my best efforts to the contrary, a hint of triumphalism has pervaded my posts since the judgment I hope I can be forgiven after some of the vicious attacks I had to suffer. I have not noticed any of those who violently disagreed coming forward, even grudgingly, to admit that I may have had a point.

 

However, because Mr Justice Smith found it so may be unfortunate for the likes of us, but may I remind you that if the test case hadn't been precipitously put together, we could very well by now have had a very different outcome?

 

How long did they need? There was not just one lawyer working on his own here for the OFT. They had one QC, three other barristers as well as the lawyers at the OFT not to mention all the advice thrust on them by interested parties. The banks' lawyers had the same amount of time to get ready. And since the OFT won on the important point they must have done a good job.

 

In case you don't know, or have forgotten, cases were being pushed into Mercantile and there were judges there (whose name escape me now ) who if they had had their chance, would very likely have gone for very different findings.

 

"We got the wrong judge" is not a very convincing argument, particularly when he found for hte OFT on the important point. He was at least half sound.

 

It is not a coincidence that the banks were settling these cases ahead of any other without argument, as they were very aware the outcome could have been very different.

 

This is neither here nor there when it comes to the legal arguments.

 

...it is unfortunate the OFT didn't see fit to appeal...

 

The OFT were virtually forced into arguing the contractual penalty point because it had become so entrenched. There would have been an outcry if it had not been argued. There never was an argument. That is why the OFT has not appealed. Besides, it was never really about penalties!

 

For starters, having the Court of Appeals confirming his judgment would have helped appeasing the fears that this was just unfortunate it was this judge on this case.

 

It would presumably not have been unfortunate if the judge found the other way.

 

I'll add one more thing: From day one, you have said that your opinion was right because you were a lawyer and we were wrong because we weren't and didn't know what we were talking about.

 

My first post started:

 

 

 

Please note:

1. I am a lawyer, but not a mercantile lawyer. Hopefully, what I say that follows is correct.
   
2. In case there is any misunderstanding, I am against the high level of charges made by banks.
   

I surfed into this site and immediately noticed the following statements of the law:

1. The law of penalty charges permits the recovery only of losses caused by a contractual breach
   

1. Penalties which make profits are unenforceable at Common Law and The Unfair Terms in Consumer Contracts Regulations
   

I think they bear examination and that is why I signed up.

 

I hardly think that that has an arrogant tone. I was only interested in starting a discussion of the law.

 

I just thought I would point out that the people who have led this crusade from the start were or are people well versed in the law at various levels: Bankfodder, Stephen Hone, Mike Dailly (Scotland), and I believe Bob Egerton too, and they didn't just make their argument up out of thin air.

 

I cannot comment as I do not think I have seen their arguments.

[Aequitas]

but then news of the impending OFT case came out, and rather than risk enduring a long stay, or be subjected to to the outcome of the OFT's shoddily handled case, I decided to accept.

 

I do not think I follow this. How did you know the case was going to be shoddily handled by the OFT and if they won how can the case have been shoddily handled?

[citizenB]

Or, we'll see the Courts dismissing claims based on Claimants not contacting them, assuming they are "in the know" about the appeal status of the TC.

 

I only say this because this just happened to me. (Mine should be reinstated in the next few days, fingers crossed!)

 

If you've been stayed, check the Court Order and comply with it by writing to the Court to ask for the stay to be lifted/extended, or face having your claim dismissed.

 

Car, my General form of Judgement or Order, reads:

 

IT IS ORDERED THAT

 

1: This case is stayed with immediate effect pending the final determination of the case in the commercial court. Any listed hearings in this case are vacated and will not take place.

 

2: Either Party may apply to the Court to lift the stay. Any application must be served on teh other party and be supported by evidence why the case should proceed before the determination of the Commercial Court case.

 

3: Unless the Court has given directions in the meantime the defendants must apply on notice tot he Court for directions not later than 3 months after the determination of the Commercial Court case.

 

4: This order having been made on the Courts own Initiative, eitehr party may apply to vary or revoke it provided the application is made not later than 7 days after service of the order.

 

5: Explanation. Here it just gives an explanation of why cases are being stayed due to the OFT/Bank court case in the High Court, signing off by saying it is appropriate for this case and many other cases to await the decision of the Commercial Court.

[photoman]

I do not think I follow this. How did you know the case was going to be shoddily handled by the OFT and if they won how can the case have been shoddily handled?

 

For clarity, my claim related to a Business account, so I could not rely upon UTCCR.

 

and as you say yourself:

 

The OFT were virtually forced into arguing the contractual penalty point because it had become so entrenched. There would have been an outcry if it had not been argued. There never was an argument. That is why the OFT has not appealed. Besides, it was never really about penalties!

 

I, along with many others DO believe that the issue was also about penalties at common law, and this should really have been dealt with properly.

Because the OFT were obviously not prepared or willing to properly take up the reigns on the penalties aspect, strongly argue the points, and take it all the way through all and any appeals, this has now allowed the banks to apparently overturn over a century of law.

That was my fear, and it has now been realised.

[african_igbo]

Hi Is there a thread regarding the wordign or do we just telephone the Courts and ask... It seems very tad handed that after this length of time... that we have to notify the Courts... why cant they send you a renewal court date as I have already forked out for date which I had then it got stayed...

[MARTIN3030]

Check your notification that the Court sent you.

Some stays were short term others were on determination.

Its important that you know the directions of your stay.Many stays were automatically made at the Courts own motion following instructions.You should have been given liberty to apply to have the stay lifted.This should be done on notice,but you would need to show good reasons.

Its particularly important that you meet any deadlines for any allocation fees that may become due.(or if allocation was made earlier,any hearing fees.You should be sent notices where this applies.

If I was you I would call your Court and ask.

Dont forget to have your claim number handy to give.

Edited December 12, 2008 by MARTIN3030

[african_igbo]

Hi Thanks I will do...

[millie cat]

Waiver extended

 

 

FSA extends waiver to firms on complaints handling

 

 

 

FSA/PN/014/2009

22 January 2009

The Financial Services Authority (FSA) today extended its waiver from complaints handling rules regarding unauthorised overdraft charges, for up to six months. This is because the test case is ongoing, and it is not yet clear how the banks should be responding to complaints about unauthorised overdraft charges so that customers are treated consistently and fairly.

The waiver was due to expire on January 26. The extension has been offered to those firms who signed up to the July 2008 waiver. This represents approximately 98% of the market.

Whilst the waiver is in place, signatories will not be required to handle complaints relating to unauthorised overdraft charges within the time limits set out in the Dispute Resolution manual.

Dan Waters, director of Retail Policy and Conduct Risk at the FSA, said:

"Our objectives continue to be certainty over this complex issue, and a fair and consistent resolution of consumer complaints about unauthorised overdraft charges.

"The FSA has reviewed the prevailing circumstances and has decided to offer firms an extension to the waiver, to run for up to six months."

The FSA can revoke the waiver at any time if it considers a waiver is no longer appropriate, for example, if it no longer provides adequate consumer protection, or material progress is not being made in the test case, or a firm fails to comply with the conditions set out in the waiver.

The FSA first granted a waiver for 12 months from its complaints handling rules regarding unauthorised overdraft charges in July 2007. This was followed by a new waiver with a duration of six months in July 2008.

The waiver means that while it is in operation, any bank or building society granted the waiver will not be required to handle this type of complaint within the time limits set out in the FSA rules. The county courts have 'stayed' cases referred to them and the Financial Ombudsman Service has adopted a similar approach.

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Notes to editors

1. The waivers are available on the FSA website.
   
2. The waiver has been extended for up to six months. This is because the test case is ongoing and it is not yet clear how the banks should be responding to complaints about unauthorised overdraft charges so that customers are treated consistently and fairly.
   
3. The test case began in July 2007. There are two stages. The first explores the preliminary issues of banks’ terms and conditions and whether they are subject to Unfair Terms in Consumer Contract Regulations 1999 and whether they are capable of being penalties at common law. Stage two will deal with whether the terms are actually unfair and are actually penalties at common law.
   
4. On current terms and conditions, the High Court decided that the current terms and conditions could be assessed for fairness under the Regulations; were not capable of being penalties at common law; and were in, or largely in, plain intelligible language.
   
5. The banks appealed the High Court’s decision that current terms and conditions can be assessed for fairness. The appeal was heard by the Court of Appeal from 28 October to 5 November 2008. The Court of Appeal’s judgment has yet to be handed down.
   
6. For more detail follow the link for Moneymadeclear.
   
7. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
   
8. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
   
9. Posted by Amethyst on LB site
   

[phatram]

I wonder who told them to extend the waiver?