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Oft Test Case - Next Important Date?


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Whatever figure they set a limit at, it will only be a nominal figure below which they wont take any regulatory action.

 

It will not be a figure that is legally "fair"

 

Only a court can state what figure is fair or not, and will thus leave the road clear for everyone to resume their claims.

 

Just as it is now with credit card claims.

 

Exactly, and this is what worries me. Surely the Banks know fine well it'll be back to employing more than they want to deal with a never ending flood of claims like it was before. I fear when the OFT gets down to sorting the figure out, the Banks will somehow find a way to stop it? I can't think how, but I don't trust the snakes! Nor anybody else that plays a hand in this situation.

 

I don't know what a 'round robin' is, as JC says...but I suspect it means this was just a massive time wasting exercise!

 

I surely hope my worries are unfounded, and it's back to courts as was, I never thought they'd just cough up what they owed as in the charter.

 

If it is back to court then I'm loving the contractual interest!

 

Question! Many thousands of people have claims in the system, and many will have had more charges since submitting MCOL/N1. When the time comes, do we need to submit an N244 to update new charges/update interest? Maybe I'm getting ahead of myself.

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I'm sure the OFT will do a dal with the BBA and set a limit like they did with credit cards. The only question is at what level. As a pointer, I beleive barclays revamped their charges last year starting at £8 for most 'transgressions' and Halifax now have a £5 daily charge. A charge of £7 may be fairer but I doubt the banks would agree. They have got to fund fred the Shred's pension somehow!

 

Other websites incl LB don't think a deal will done between OFT and Banks like credit cards. I have been referred to the following article from the OFT:-

Press releases 2007

 

 

OFT announces 'quick fix' on bank charges will disadvantage consumers

 

54/07 29 March 2007

In response to consumer concerns over bank current account charges, the OFT has today announced an in-depth study of retail bank pricing. This will sit alongside a formal investigation into the fairness of bank current account charges. Full details of the study will be announced in late April, and it is expected to be completed by the end of the year.

This study follows an initial review carried out by the OFT into these charges. The finding of this initial review is that the OFT shares the public concern about the level and incidence of bank current account charges, but it recognises that the application of the general principles it set out in 2006 to the banking industry is not straightforward and that a more detailed examination is needed.

The decision to undertake a study reflects the OFT's desire to take a strategic approach to the examination of the fairness of these charges in the wider context of competition in the UK retail banking sector.

John Fingleton, OFT Chief Executive said: 'The UK retail banking market performs well in many dimensions, especially relative to international norms. However, the issue of bank current account charges is a matter of real concern to the banks' customers, and raises wider questions about competition and transparency of pricing. The initial scoping work we have undertaken has demonstrated to us that this is not only an issue for those people who are being charged, but also for customers who are not defaulting on their bank accounts.

'A quick-fix solution is not the answer as this might be of limited long-term benefit and could have unintended and far-reaching consequences across the whole sector and on consumers as a whole. We will look forward to co-operation from the banking sector in reaching a conclusion to this matter which is satisfactory to consumers and which will strengthen competition, efficiency and customer outcomes in the UK retail banking sector.'

NOTES

1. On 7 September 2006, the OFT announced that it was to carry out a short study into current account charges. See press release 130/06.

2. This initial review was not intended to lead to the setting of a specific threshold for intervention by OFT at this stage. As indicated in September it was intended as a preliminary assessment of the issues, to see whether a further detailed investigation of the fairness of individual bank default charges may be necessary.

3. In the course of the scoping work OFT has liaised closely with the Financial Services Authority and Financial Ombudsman Service and held discussions with the British Bankers' Association about the activities banks engage in when dealing with a default by a customer and the relevance of banking law to this issue.

4. In April 2006 the OFT set out principles for considering the fairness of credit card default charges. One question for the new study is to consider how these principles might apply to bank accounts.

 

I am still of the opinion a deal will eventually be done between the OFT and Banks.

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The problem with that article is that it pre-dates the later decision to go to court for a test case which should have established once and for all where we all stood.

 

Cat amongst the pigeons: the judge, in a classic Solomon judgment, decides that yes the OFT can decide on the fairness of the charges, but no, the charges can't be penalties (although they're not for a service either!). What this means is that he effectively takes away from us little people the power to challenge the banks directly, and instead hands it back to the government body which should never have relinquished it in the first place. That's one thing and us plebs put in our place.

 

The OFT, surprisingly, chooses NOT to appeal the penalties argument, but the banks, not surprisingly, do appeal the OFT's jurisdiction decision.

 

The appeals court now confirms that yes, the OFT do have jurisdiction, but amusingly enough if you read the judgment, you will see that they seem to disagree with the not-a-penalty decision, but since it isn't part of their brief to discuss in this instance, they skirt around it in so many words. :-D

 

So what now? Well, regardless as to whether the banks get granted their appeal (and I have to say I have my doubts on this one, after all, it is unlikely the Lords, this most conservative of establishment status-quo maintaining body, would agree to a challenge on the authority of the watchdog and regulatory body on behalf of the government!), things haven't changed that much: The OFT do not have the power to say what constitutes a fair amount, only whether the amounts charged now are fair or not (and we know they already think not).

 

If the charges had been found to be penalties, it certainly would have made life a lot easier for all on this side of the fence, OFT included, as it would have allowed us to individually challenge the banks leaving the OFT not to rock any boats the way they used to enjoy it. Now they're going to be right back in the spotlight with all waiting to see what their next move is going to be... Not a comfortable position for ol' toothless tiger of yore. :razz:

 

We shall see... When that fat cat sings, I'll sure enjoy skinning it from tail to ears. :-D

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(just thinking out loud)

 

I am wondering if a figure of £12 might actually be to our advantage... at this level it is easy to prove that even this amount is way above what it should be and with a reclaim it should be possible to get the lot back (just as we currently do with credit cards) ie it should be fairly easy to get the £12 as well.

 

If its set to £5 then I think all folks will get is the difference between that and the full charge, I think it would be difficult to win this smaller amount back in court.

 

As for claiming back other things as Bigmac has suggested... I get a feeling in the pit of my stomach that something is going to be put in place to stop this, some sort of waiver... as I think this amount would make any charge reclaim look like small fry.

 

 

I find this really interesting....I successfully claimed back the difference between £20 & £12 (credit card charges) in the early part of 2007. The refund was applied against my Barclaycard balance. Later that year I was in a position to settle the account so I did & thought no more of it until my husband was made redundant at Christmas and we needed to find some money!! On 5.2.09 I wrote asking for them to refund me the £12 charges aswell (totalling £588) They wrote back within the week agreeing it & said they were crediting the amount to my Barclaycard!! 1 further letter to them last week pointing out my account was paid in full and closed and today they asked me to contact them to arrange a BACS transfer. 1 phone call later (although transferred to 5 different people!! aargh) and they have refunded me £650!!! by BACS transfer today. Will obviously not celebrate until the money is definitely in my account BUT if they were confident of their arguement....why refund all the £12 charges aswell????? I really thought they would put up a fight!! :D:D

Edited by Villafan
smiley in the way...should read £588
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Sorry with the help of legal seagulls

If you press the quote button on Brown1950 you will see that it is an intersite joke. Its been long running and is taken in good humour by both site concerned.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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The problem with that article is that it pre-dates the later decision to go to court for a test case which should have established once and for all where we all stood.

 

Cat amongst the pigeons: the judge, in a classic Solomon judgment, decides that yes the OFT can decide on the fairness of the charges, but no, the charges can't be penalties (although they're not for a service either!). What this means is that he effectively takes away from us little people the power to challenge the banks directly, and instead hands it back to the government body which should never have relinquished it in the first place. That's one thing and us plebs put in our place.

I was chatting with Tom Brennan after the RCoJ decision yesterday. The way he explained it to me is that effectively the OFT threw the lot into the pot, so if the charges weren't penalties in law then they were unfair under the UTCCR 1999 or vice versa. The OFT did appeal the penalty bit and the Court of Appeal denied their appeal.

 

The OFT, surprisingly, chooses NOT to appeal the penalties argument, but the banks, not surprisingly, do appeal the OFT's jurisdiction decision.

See above, they did late on and it was turned down.

The appeals court now confirms that yes, the OFT do have jurisdiction, but amusingly enough if you read the judgment, you will see that they seem to disagree with the not-a-penalty decision, but since it isn't part of their brief to discuss in this instance, they skirt around it in so many words. :-D

See above again.

So what now? Well, regardless as to whether the banks get granted their appeal (and I have to say I have my doubts on this one, after all, it is unlikely the Lords, this most conservative of establishment status-quo maintaining body, would agree to a challenge on the authority of the watchdog and regulatory body on behalf of the government!), things haven't changed that much: The OFT do not have the power to say what constitutes a fair amount, only whether the amounts charged now are fair or not (and we know they already think not).

They have to identify the terms that they believe are unfair to begin with and I mean each single term from each banks' contract.

If the charges had been found to be penalties, it certainly would have made life a lot easier for all on this side of the fence, OFT included, as it would have allowed us to individually challenge the banks leaving the OFT not to rock any boats the way they used to enjoy it. Now they're going to be right back in the spotlight with all waiting to see what their next move is going to be... Not a comfortable position for ol' toothless tiger of yore. :razz:

Please see above re penalties. OFT appealed it and was denied.

We shall see... When that fat cat sings, I'll sure enjoy skinning it from tail to ears. :-D

 

Hope that clarifies the PENALTY aspect for you. OFT appealed that element and it was denied by the Court of Appeal. As I said, Tom Brennan did say to me that the OFT either were going to get the banks on PENALTIES or UTCCR 1999. The fact they did get them on UTCCR 1999 should mean that when the "new" fair charging system is in place, that it is CONTRACTUAL INTEREST central on bank charges cases :D

That has got to be good.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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Lets not forget here, that it was the banks that approached the OFT asking for this case to be be brought underway.

 

This is not a decision they would have made without their own analysts contemplating what the most likely outcome, liabilities and future restrictions would be.

 

They would not have instigated the whole case simply as a time wasting exercise (simply to stall all current cases), if they felt that upon conclusion it would just leave them with ultimately much the same, or possibly even worse (due to interest etc) liabilities.

All opinions and advice I offer are purely my own, and are offered without any liability. If unsure seek the help of a licensed professional

...just because something's in print doesn't mean its true.... just look at you Banks T&C's for example !

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As I see it the banks were glad to repay claims so as to end the claim in F & F, and still would have been glad to have repaid peeps, this was done to avoid any further doors opening should a case be lost in court.

 

Remember it was the OFT who took the banks to court, even though the banks said they were happy to go to court, no way they were happy.

They knew the consequences if they were to lose this test case and boy did they put up a fight, by losing the case in the way they have there are many other possibilities of further recompense to consumers which could make the charges amount look insignificant.

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Hope that clarifies the PENALTY aspect for you. OFT appealed that element and it was denied by the Court of Appeal. As I said, Tom Brennan did say to me that the OFT either were going to get the banks on PENALTIES or UTCCR 1999. The fact they did get them on UTCCR 1999 should mean that when the "new" fair charging system is in place, that it is CONTRACTUAL INTEREST central on bank charges cases :D

That has got to be good.

 

Have you got more info on this, YB? Granted this is going back a while now, but I honestly do not remember any motion at any time that the OFT were going to appeal on the penalties. As I recall (again with the proviso of memory loss kicking in :razz:), the OFT made it very clear very early that they had no intention of appealing the penalty element, so I'm really quite surprised at TB saying otherwise, so corroboration from elsewhere would be good ( not essential, mind, this is just for my peace of mind :-))

 

And yes, I am well aware that the OFT hinged their case on the two-pronged attack, but I don't see that a victory on both fronts would have done any harm to us. :-D

 

Sorry, I have no idea what you mean in your last sentence. :oops:

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If you press the quote button on Brown1950 you will see that it is an intersite joke. Its been long running and is taken in good humour by both site concerned.

 

 

Sorry you have lost me with this one ! I thought it was because i was to mention LB stite ???

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If you press the quote button on Brown1950 you will see that it is an intersite joke. Its been long running and is taken in good humour by both site concerned.

 

 

Ahhhh i now understand if you try and mention LB and vice versa ? YES ?

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Have you got more info on this, YB? Granted this is going back a while now, but I honestly do not remember any motion at any time that the OFT were going to appeal on the penalties. As I recall (again with the proviso of memory loss kicking in :razz:), the OFT made it very clear very early that they had no intention of appealing the penalty element, so I'm really quite surprised at TB saying otherwise, so corroboration from elsewhere would be good ( not essential, mind, this is just for my peace of mind :-))

The TB quote is with regards to the OFT test case from the start and not the Appeal specifically.

And yes, I am well aware that the OFT hinged their case on the two-pronged attack, but I don't see that a victory on both fronts would have done any harm to us. :-D

 

Sorry, I have no idea what you mean in your last sentence. :oops:

 

I have to admit to a misread of my own notes from the High Court. I wrote, "C Of Appeal dismissed appeal on Penalties". Having been asked off forum by somebody about this I had a long read of the judgement and previous one. In fact, the penal aspect went early on as you are right in stating.

 

Last sentence simply meant that if the petition to appeal the judgement to HOL, then it is the beginning of game over. If there does come about a point in which the Banks' have to determine their charging structures in a way that is compliant with UTCCR 1999(so a new pricing structure) then charges should be refunded at that point and before at contractual interest on the charges already levied. Does that make sense? Will be back after the weekend cos the element of fairness in itself I think will require huge amounts of work by the OFT. They may well already have teams individually working through various banks' terms and conditions to speed up(dare I say it) the process.

.

FSA Waiver on Bank Charges:http://www.fsa.gov.uk/pages/Doing/Regulated/Notify/Waiver/pdf/dir_quart_0709.pdf

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