Theft by the banks ??

[JonCris]

I disagree that I'm painting a "black & white" picture. I am however suggesting a set of possible circumstances that might establish an illegal act conducted by the banks. And yes it would be a matter for the courts to decide but remember the law is a movable feast & what is one day lawful can the next day be unlawful.

 

Also I suggest that the banks are already guilty of acts subject to criminal sanction. The Trade Description Act to name but one. By continuing to claim their charges are lawful when (as they well know) they are not is I suspect a contravention of the TDA

[PhantomReclaimer]

Sec.4 Unfair Contract Terms Act 1977 says;

 

4 Unreasonable indemnity clauses

 

(1) A person dealing as consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness.

 

(2) This section applies whether the liability in question—

 

(a) is directly that of the person to be indemnified or is incurred by him vicariously;

 

(b) is to the person dealing as consumer or to someone else.

 

An indenmity is a bit like a guarantee to absolve someone of the consequesnses of something - in this case negligence. The banks say that their charges are to recoup their expenses in relation to negligence, so you are being made to indemnify those losses and Sec.4 clearly says that you cannot be made to do that.

 

Even if the charge really did cover their expenses and no more the charge dosen't automatically become "reasonable" because Sec.4 says that the contract term that imposes the indemnity must be reasonable. Therefor, they would have to show it's reasonale to impose the term upon you in the first place before any question of the actual amount arose.

 

The only respect in which the law may appear to be untested is whether or not the charge they are applying actually amounts to the application of an indemnity clause and I can't see how any Court would say that it isn't an indemnity.

 

With respect to Common Law. It is a long held principle that you cannot apply punitive damages against someone for their negligence. You can claim actual damages (to compensate for actual losses you have incurred) but anything more is considered "unjust enrichment" because you have done nothing in exchange for it. Moreover, damages can only be awarded by a Court, you can't just take them from someones account. I think there are cases on this in the Library.

 

The Unfair Terms in Consumer Contract Regulations is a Statutory Instrument. Sec.5 says;

 

5 Unfair Terms

 

(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

A term requiring you to indemnify someone else certainly causes an imbalance in the consumers rights as it is contrary to law (UFCTA 1977) and places no obligation upon the much more powerful and finacially capeable party (the business) to shoulder any of the loss from negligence.

 

Sec.8 says;

 

8 Effect of unfair term

 

(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.

 

(2) The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term.

 

And this is the final nial in the banks collective coffin. The term is void and anything paid under such a term is recoverable.

 

So, to sum up, these charges are unlawful on at least 3 counts; Firstly that at Common Law you cannot be made to pay a penalty for negligence, secondly, the UFCTA1977 says that you cannot be made to indemnify another for negligence and thirdly, the term is void as it is unfair becaue it results in a significance imbalance in the duties between the parties.

 

P.

[PhantomReclaimer]

 

Also I suggest that the banks are already guilty of acts subject to criminal sanction. The Trade Description Act to name but one. By continuing to claim their charges are lawful when (as they well know) they are not is I suspect a contravention of the TDA

 

I don't know if the TDA would have any application there but it certainly seems like a deception offence under the Theft Act 1968. They are telling you that their charges are lawful and reasonable and you are paying them on that basis. They clearly are not lawful, nor are they remotely reasonable, so they are perpetrating a deception upon you.

 

P.

[Glenn UK]

PR

 

I have read thruogh that 77 and 99 acts before but hadtn realy spent much time on it, reading through the bits you have posted i can see your point, ill go back and read through the acts again to make sure i have a better understanding. thanks for the pointers.

 

As i have said i agree with the argument that they have been acting unlawfully and quite probalby illegaly it will be good to see what happnes long turn.

 

Changing the subject slightly have you seen the post in the abbey forum saying the Information Commissioners Office are going in to abbey beginning of sept?

[JonCris]

Sec.4 Unfair Contract Terms Act 1977 says;

 

4 Unreasonable indemnity clauses

 

(1) A person dealing as consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness.

 

(2) This section applies whether the liability in question—

 

(a) is directly that of the person to be indemnified or is incurred by him vicariously;

 

(b) is to the person dealing as consumer or to someone else.

 

An indenmity is a bit like a guarantee to absolve someone of the consequesnses of something - in this case negligence. The banks say that their charges are to recoup their expenses in relation to negligence, so you are being made to indemnify those losses and Sec.4 clearly says that you cannot be made to do that.

 

Even if the charge really did cover their expenses and no more the charge dosen't automatically become "reasonable" because Sec.4 says that the contract term that imposes the indemnity must be reasonable. Therefor, they would have to show it's reasonale to impose the term upon you in the first place before any question of the actual amount arose.

 

The only respect in which the law may appear to be untested is whether or not the charge they are applying actually amounts to the application of an indemnity clause and I can't see how any Court would say that it isn't an indemnity.

 

With respect to Common Law. It is a long held principle that you cannot apply punitive damages against someone for their negligence. You can claim actual damages (to compensate for actual losses you have incurred) but anything more is considered "unjust enrichment" because you have done nothing in exchange for it. Moreover, damages can only be awarded by a Court, you can't just take them from someones account. I think there are cases on this in the Library.

 

The Unfair Terms in Consumer Contract Regulations is a Statutory Instrument. Sec.5 says;

 

5 Unfair Terms

 

(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

A term requiring you to indemnify someone else certainly causes an imbalance in the consumers rights as it is contrary to law (UFCTA 1977) and places no obligation upon the much more powerful and finacially capeable party (the business) to shoulder any of the loss from negligence.

 

Sec.8 says;

 

8 Effect of unfair term

 

(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer.

 

(2) The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term.

 

And this is the final nial in the banks collective coffin. The term is void and anything paid under such a term is recoverable.

 

So, to sum up, these charges are unlawful on at least 3 counts; Firstly that at Common Law you cannot be made to pay a penalty for negligence, secondly, the UFCTA1977 says that you cannot be made to indemnify another for negligence and thirdly, the term is void as it is unfair becaue it results in a significance imbalance in the duties between the parties.

 

P.

 

Excellent post Glenn

 

As far as their charges being reasonable I think their argument would fail simply because they experience no actual loss & banks whereas they did before now don't even bother to inform you that you have gone over.

 

Also if you do go overdrawn they continue to charge interest often at a higher rate So even without their "penalty" charges there are even greater profits for them as we have already seen published in the press almost daily

 

I suspect these increased rates could also be challenged as they too can I suggest be construed as a "Penalty"

[JonCris]

PS I understand the courts do have the power to impose punitive damages they just choose not to do it.

 

This is understandable in some respects but unless examples are made of some transgressors then they will continue to conduct business in the same way & to hell with the consequences of which there are few After all they are only paying back you your money which they have profited from for months or years so why should they change unless it's in the knowledge that they are going to be hit with huge damages unless they mend their ways.

 

The statutory bodies as we have seen are a waste of time & money

[JonCris]

PR

 

I have read thruogh that 77 and 99 acts before but hadtn realy spent much time on it, reading through the bits you have posted i can see your point, ill go back and read through the acts again to make sure i have a better understanding. thanks for the pointers.

 

As i have said i agree with the argument that they have been acting unlawfully and quite probalby illegaly it will be good to see what happnes long turn.

 

Changing the subject slightly have you seen the post in the abbey forum saying the Information Commissioners Office are going in to abbey beginning of sept?

 

That might explain why I got my pre 6 years microfiche statements after querying their response to me original request (see my sig)

 

What planet is the OFT. I see it will all be done by appointment Abbey must be working flat out to make their system as confusing as possible

[PhantomReclaimer]

PS I understand the courts do have the power to impose punitive damages they just choose not to do it.

 

Hmmm, I don't think it's that straightforward. The Courts may be able to but if it's settled, long established case law, then it would have to be over turned by a higher Court than the one that set it. Given that it's an old principle I would imagine that it's been settled by the House of Lords on at least one occasion so it would require them to over turn their own decision. That's not an impossibility (although it used to be until 1969), but it's very rare and they'll only do it in cases where they feel there is a pressing judical need. Basically, only if they think the principle has been wrongly decided by them previously, and they don't take that opinion lightly.

 

If there is something in statute relating to the matter then it would need an Act of Parliament to change it.

 

P.

[JonCris]

Hmmm, I don't think it's that straightforward. The Courts may be able to but if it's settled, long established case law, then it would have to be over turned by a higher Court than the one that set it. Given that it's an old principle I would imagine that it's been settled by the House of Lords on at least one occasion so it would require them to over turn their own decision. That's not an impossibility (although it used to be until 1969), but it's very rare and they'll only do it in cases where they feel there is a pressing judical need. Basically, only if they think the principle has been wrongly decided by them previously, and they don't take that opinion lightly.

 

If there is something in statute relating to the matter then it would need an Act of Parliament to change it.

 

P.

 

Of course it would have to be the HOL who decided. However I do think that the rumblings amongst many lawyers & jurists is that there is a pressing need particularly when it comes to the injury & death of victims of negligence.

[PhantomReclaimer]

Of course it would have to be the HOL who decided. However I do think that the rumblings amongst many lawyers & jurists is that there is a pressing need particularly when it comes to the injury & death of victims of negligence.

 

The problem is - and I think is the reason it's unlikely to happen - is that it would mean that the civil Courts would effectively be imposing criminal penalties without having to apply the relevent standard of criminal liability, ie; you would be being penalised on a decision made on a balance of probibilities, rather than on one of "beyond reasonable doubt". Also. it would contravene the part of the Bor 1689 which prevents fines and forefeitures before conviction.

 

P.

[JonCris]

I take your point about the BoR but remember there was no difference between the civil & the criminal court Therefore I suggest that a finding on behalf of the claimant is a conviction in sofar as the BoR is concerned

[PhantomReclaimer]

I take your point about the BoR but remember there was no difference between the civil & the criminal court Therefore I suggest that a finding on behalf of the claimant is a conviction in sofar as the BoR is concerned

 

I don't think it is. The civil Courts don't "convict", they hand down judgements. When you claim for damages, you are claiming just that - for damage caused - not to penalise the other party. You are only having your self restored, as near as is practicable, to your situation before the loss ocurred.

 

Besides, the BoR talks about the levying of "fines and forefeitsures" and an order of damages (which, as mentioned above), is really nothing more than compensation, and could never be described as either a fine or a forefeitsure. To put it another way, damages is effectively your money you are getting back, a fine or forefeit is punitive (or preventative by threat) in nature in that they take away more than the convicted person has actually gained or caused in damage or loss.

 

P.

[zootscoot]

Punitive damages are available in tort law (negligence, defamataion, nuisance etc.) But NOT in contract law.

 

Even in tort law the availability of punitive damages is very restrictive because as phantom reclaimer points out the possible usurpation of criminal law.

[JonCris]

In contract one or other of the parties could cause the other to breach the contract & punitive damages could lead to the enrichment of that party.

 

However any claim against the banks which could include punitive damages would be for negligence & not breach of contract. In other words because they have failed in their fudiciary duty they HAVE been negligent. Also that doesn't include any possible additional action for defamation.

[zootscoot]

Not sure that the banks do owe their customers a fiduciary duty- it is a contractual relationship rather than trustee relationship.

[JonCris]

Not sure that the banks do owe their customers a fiduciary duty- it is a contractual relationship rather than trustee relationship.

 

I do & here's why

 

Breach of duty is part of a negligence lawsuit and the most important aspect in proving such an issue. If no duty was ever breached then no negligent damages are owed.

In a negligence lawsuit there are four elements to consider: duty, breach of duty, causation and damages. For breach of duty, it must be decided whether or not the defendant, the one being accused of negligence, behaved in a way that a reasonable person would have under similar circumstances. If no duty is owed then there is no negligence lawsuit.

To determine breach of duty's existence, a determination is made as to the standard of care and an evaluation of the defendant's conduct in reflection of that determined standard. If duty of care by the defendant can be proven, using the reasonable care standard, then negligence can be an issue. The defendant needs to have recognized the risks created by her or his actions and to understand what could happen from those risks taken. The general standard of care is then applied to the specific circumstances of the situation and the jury must establish whether the defendant's conduct was negligent.

When the courts decide if duty was owed they consider the objective or subjective standard. Objective standard considers the defendant's actions against a hypothetical reasonable person. With the subjective standard, the court considers whether the tortfeasor, the person who is allegedly negligent, believes her or his actions were reasonable. For example, if someone attempts to rob an elderly woman in a parking lot and she happens to have a gun and shoots her attacker, the objective standard would ask if a reasonable person would have acted the same way. In the subjective standard the courts would ask the elderly woman if she thought she was acting in a reasonable fashion.

Professionals are held to a higher standard of care than an ordinary reasonable person would be. Police officers, for example, must behave as a reasonable officer would do so rather than a reasonable person. The perspective of an officer would be different than an ordinary person and that difference matters in the court.

Occasionally, statutes, or laws, will decide the reasonable standard of care rather than the courts interpreting the behavior. When statutes determine the standard of care owed, violations would be called negligence per se.

If a plaintiff, the person alleging negligence, is unable to prove the defendant's negligence because pertinent information is inaccessible, then the plaintiff can rely on res ipsa loquitur. What this means is that the act speaks for itself and needs no other information to determine negligence. But, in order to use this, the plaintiff must prove two things: the event which injured themselves only happens when negligence has occurred; the item or instrument which caused the injury was under exclusive control of the defendant and the plaintiff's injuries were not due to their own actions.

The key factor to remember in considering negligence is whether the duty of care was ever owed to the plaintiff, by the defendant, and whether or not that duty was breached.

Research source e-ssortment

[zootscoot]

A fiduciary duty is a very different duty to the duty of care in a negligence claim.

 

A fiduciary duty is one which is owed by trustees to beneficiaries and company directors to shareholders. It is particular relationship of utmost good faith as oppose to the objective test imposed in negligence.

[JonCris]

Any financial institution which handles, processes & who's operations & conduct affect the day to day life of a majority of the public & who operates under the protection of specific statutes is I suggest from the outset a trustee to it's clients. Therefore I believe their actions do amount to a breach of their fuduciary duty

[gbd]

I have been thinking about whether the banks' actions constitute theft - and this thread (the early part) is interesting as I share many of the views expressed.

 

Except for this bit - we don't have to find a smoking gun, the lawyers advice, etc. We know that the lawyers have advised the banks - we've all had letters from the banks lawyers. But we don't even need that.

 

The reason we don't need that is because we do not need to do the investigation and prosecution for a criminal charge of theft. To recover our money in a civil action then yes, we are responsible for doing all the leg work. But for a criminal charge, all we have to do is complain to the police.

 

I wonder if a template letter could be drawn up to the Commissioner of the City of London Police copied to the Serious Fraud Office complaining about theft by the banks. It would need to contain the name of the bank and the account number; the amount of charges taken and the amount repaid when the banks were threatened with legal action.

 

The police wouldn't take action after just one complaint; but if they received several - or a hundred or more - then they would be duty bound to investigate. And I can promise you this - the banks would be far more scared of a police investigation into their business practices than they would an "investigation" by the Banking Ombudsman, Financial Services Authority, Information Commissioner or the Office of Fair Trading.

[JonCris]

gdb

 

I too think a formal complaint could be made to the police but I think your wrong when it comes to the smoking gun. The correspondence we have received does refer to legal opinion but for any criminal action to succeed there would have to be evidence that the banks knew their actions would be unlawful & not just that the legal advice regarding their charges being fair & reasonable was poor advice. In that case the banks would have a neg claim against their legal advisors

[zootscoot]

Not sure you would get much joy from the police. Might be worth writing to the Director of Public Prosecutions.

 

Knowledge on the part of the banks that the charges were unlawful is not essential to proving criminal liability. Dishonesty is what needs to be proved knowledge would certainly make dishonesty easier to prove. Even if they continue to deny that the charges are unlawful, they are aware of the finding of the OFT and in any event ignorantia juris non excusat (ignorance of the law is no excuse) applies.

 

To establish criminal liability on a company you have to establish dishonesty on the part of the directing mind of the company. To claim that those at the top of these mighty institutions have no knowledge on the law within which their corporatations operate is stretching the bounds of credibility.

[Seany]

I personally do not beleive that what the banks are doing constitutes theft under S1 of the Theft Act (A person who dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it), but they may well be under S15A. I just put a couple of posts in this thread: http://www.consumeractiongroup.co.uk/forum/campaign/24118-take-campaign-unlawful-illegal.html

 

Putting my policeman's hat on, I don't beleive that it amounts to theft unfortunately. Firstly you would need to know which person's (or person) have commited the theft - I doubt that you could apply this simply to a company. Even if you applied this to the chief exectutive, or a particular director or person in the company, you would need evidence to show a court beyond reasonable doubt that when this person decided to implement these charges, they did it with the intention to dishonestly appropriate property from you.

 

 

I have just found the offence of Obtaining a Money Transfer by Deception (S15A of the Theft Act 1968.)

 

It appears to only apply when your account is in credit for some reason. Reason being is that when your account is in credit, your bank is technically in debt to you, and therefore this debt is classed as a 'thing in action'. Anybody who transfers money from your account to their own is assuming ownership over your balance and have 'appropriated a thing in action'.

 

Also, and more importantly to us on this website, by taking ownership of your balance, and disposing of it regardless of any legal rights you have, they then have intended to permanently deprive your money from you (because you have been decieved by being told it's lawful).

 

I would find it difficult to beleive that there is not an offence if your account is overdrawn, but as soon as I find anything I will post it here. I certainly think that the above is a good argument to take to the Director of Public Prosecutions, for people who have had charges come out of their accounts whilst in credit to the bank.

 

I can't see it doing any harm in writing to the Director of Public Prosectutions and seeing there view and whether it would hold a good case in court?