Co-op and BCOB

[kennyh]

I opened a 'parachute' account with Co-op and was advised that I would have neither an overdraft facility or a cheque book. This was acceptable.

 

I set up 2 direct debits to cover gas & electricity payments and the supplier began to play around with them and increased the demand rate saying they have my agreement (I currently have an SAR running to prove them wrong). Because of their attempts to take more cash then I could give, bank charges were generated. In order to receive their charges, the Co-op put me in overdraft territory. I raised this with the bank and they have refunded half the charges under the usual goodwill gesture guise. I am now aiming to issue N1. Should I?

 

QUESTION: Do I sue (issuing N1 and continuing with the legal wagon train)for Breach of Statutory Duty and if so am I permitted to use BCOB in support on said N1? If so how do I phrase things and do I quote any national legislation in support? If we have no-one in CAG who knows then I understand (I know we're not GLC) but would really like to proceed with a positive indication that I'm doing things the right way 'cos I surely am going to have a go.

 

There is only a small sum involved (costs will outstrip the sum in question), with this bank,but they are, to my way of thinking, "out of order" and an example needs to be made.

[BankFodder]

Yes, you can use BCOB.

Can you give a few more details.

Did they pay the DDs or did they bounce them?

Have you some writing to show that this was a no-overdraft account? Was it a basic account?

[kennyh]

Thanks Banky - should I try their litigation section before issuing N1 (it's their customer services who were not prepared to give the finaql £30 to puit me back in credit and allow mw to close the account- what the current tally is (allowing for charges on charges, which I have challenged other banks on and won) lord only knows)?

 

They bounced the DDs and I do have a miscellany of notes issued which confirm no overdraft, as a norm for this "Cashminder" account although apart from the initial branch interview, I have no wriiten confirmation that a cheque book would not be forthcoming. Do we have a form of words ( other than the BCOBs letter to RBS) which I would use on an N1 which refers to BCOB.

 

If not do you have any suggestions how I ease BCOB into the equation given that it originates from FSA and not statute - or do I have that wrong as well?

[BankFodder]

I think that you must send them a written warnng.

Lay out the basis of your complaint.

That the account has no overdraft facility

That despite this, they created an overdraft for their own specific benefit to accommodate charges

That the charges themselves were unfair because they are not charges for any service - as laid out in the test case

That if the charges were fair and valid, by incorporating them into an overdraft, the bank has chosen an option which gives it a higher rate of interest than had it merely consolidated the charges into a loan.

 

Therefore the bank has breached BCOBS because they have treated you unfairly by creating an overdraft on your account

They have breached BCOBS by levying charges ostensibly for services but have provided no services

They have treated you unfairly because they chosen a route which favours their own interests over yours by applying the charges in a way which attracts a higher level of interest.

 

(Check the rate of interest on a small short-term loan before you write this)

 

Tell the bank that this is the beginning of the pre-action protocol and that you will begin a small claim in 14 days. Tel them that their 8 week industry agreed timescale is not an option to which you will agree.

 

Then if they don't give you back the money, sue them - using broadly the arguments I have set out above.

It isn't an N1 anymore. It is MoneyClaim for almost everything.

[kennyh]

Again, very many thanks Banky, I did NOT realise that Moneyclaim had become preminent and am a little 'wrongfooted' never having gone down that path.

Bye-the-bye has anyone tried using BCOB as an instrument to challenge bank charges; or (although the OFT case was heard using an inadequate part of consumer law) did the SCoJ judgement blight our chances for all time under all law and did it subsume that elderly piece which made it unlawful for companies to recover more than liquidated losses? I know this might be considered 'off subject' but I believe it could be a very strong alternative avenue. Notwithstanding this additional request for opinion your earlier info does cover all of my existing points: if it should prove to be necessary do I solely refer to BCOB in my claim or do I need to reinforce it with reference to any legislation?

[BankFodder]

BCOBS is legislation. Have you not read it up? Make sure that you are familiar enough about it to be able to bring your action.

It isn't complicated, for your purposes.

You will need to back yourself with good arguments as to why the charge is unfair - which means that you will have to get references from the OFT and also from the test case.

Coop will want to say that the charge is not unfair under UTCCR and so why should it be unfair under BCOBS.

 

Your response is that charges have never been tested under UTCCR because the Supreme Court held that they didn't fall to be tested. It was also said by the banks that the charges were really a fee for a package of services.

 

Your response would be - that even if they were a charge for a package of services, where a DD is merely bounced and not the result of an "unauthroised OD", then you have been excluded from the package of services and so you are being required to pay for nothing.

Also, you must find evidence to say that charges at that rate are unfair anyway.

And of course, - maybe your most powerful argument is that they have imposed the charges as part of an overdraft in a non-overdraft account and also this means that they charge overdraft interest which is a higher rate than a loan interest (check this out) and therefore this means that they have prejudiced you.

 

I expect that Coop will try to bottle out of this by paying you.

If the account is still open then you have a very good reason to refuse an offer and to insist upon a judgment. If you got a judgment for this, it would be a serious step because it could potentially mean that the banks would have to refund all charges which had ever been levied for bounced payments.

If the account is closed, then you would probably have to accept the pay-off.

[kennyh]

Banky mille thank yous. I had downloaded a monumental piece of BCOB but thought it was sponsored by FSA merely to replace the BC. The fact that it is legislation does, of course, make life a lot more straightforward and I shaa do some serious reading. The account is NOT closed and the sums are not large and I am inclined toward a judgement. I am inclined to agree with you ( having had some dealings with the banks over the years) and I am inclined to refuse an offer. Do I have to state grounds for refusal in order not to upset the courts?

[BankFodder]

Somewhere in CPR27 it says that if you have reasonable grounds for refusing an offer of settlement then you can go on to obtain a judgment.

 

I would say that if your account is open, then you remain at risk of the bank continuing to treat you unfairly because their attempt to settle will be expressed as a gesture of goodwill. I think that this gives you a reasonable basis for proceeding to trial and judgment in order to put the matter beyond doubt.

Don't forget that this is just my own view. You have to decide for yourself.

[kennyh]

Hi Banky, I shall seek a judgement since I have, about, had enough of 'gestures of goodwill'. Time to call a spade a b****y shovel. I shall be pm'ing you on one or two matters before I begin in ernest.

[BankFodder]

I've seen the text of a message you have sent.

 

Please would you put it up here so that we can discuss it in the thread.

Ta

[kennyh]

Of course but it's now very late so I'll do it tomorrow.

Ken

[kennyh]

For my part I am content to seek a judgement.

However in my early investigations into BCOBs I have foundmany conflicting views, specifically:

*on the FSA site "Legal status and disclaimer

The FSA has reviewed this Industry Guidance for aspects ofretail banking and has confirmed that it will take it into account whenexercising its regulatory functions. This Guidance is not mandatory and is notFSA Guidance."

and from a variety of other sources which you may or may notbe aware of

*The background to BCOBS The Banking Code and the BusinessBanking Code have, since 1992 and 2002, respectively, contained importantcommitments that those banks that subscribe to the codes owe to customers. Thecodes are voluntary. The FSA does not treat failure to comply with the industryguidance as a trigger for regulatory action. Compliance with guidance indicatescompliance with the relevant rule but failure to comply with such guidance doesnot necessarily mean that the firm has breached a rule.

*BCOBS does not apply to overdrafts or unfair charges. Theregulatory change put the OFT in charge in this relation. I hope no one on CAGis going to assume that this offers a new line for Unfair Charges cases becauseit does not

*However, areas of retail banking which fall outside of theFSA's remit, such as overdrafts and credit card lending, will continue to beregulated under the Consumer Credit Act 1974. The Office of Fair Trading (OFT)has a duty to license and regulate businesses involved in consumer creditactivities provided that they satisfy the OFT they are fit to hold a licence.As well as retaining responsibility for the CCA areas, the OFT will also haveresponsibility for Part 8 of the PSRs which deals with competition issuesrelating to access to payment systems.

You might recognise some of these opinions since youobviously tend to keep closer to the action than I.

Assuming BCOBs is, after all, our instrument I would like toclear any phraseology, I might submit with CAG. Is that acceptable?If BCOBs is not the correct path then I’ll persevere with CCA (74)? And/orthose parts of UTCCR99 that might be appropriate but remain unsullied fromOFT/SCoJ attentions.

However I REALLY hope that BCOB is the instrument since, as mentioned earlier, I, for one, have had enough of "Gestures of Goodwill". We all know that if a bank has to involuntarily part with cash then there is precious little "Goodwill" in the transaction; I feel most strongly that folk should be able to reclaim what is rightfully theirs without the usual subterfuges.

[BankFodder]

Firstly, please will you provide links to the sources you are using.

 

However, without seeing the sources, here are my comments:-

 

BCOBS is a set of regulations made by the FSA under their powers in the Financial Services and Markets Act 2000. Those parts of BCOBS - and any other regulations in the FSA handbook which are marked with an R - are legally binding. Those parts marked with a G are merely guidance - but that guidance will be very persuasive.

 

The Banking Code was apparently non-binding - except that the BBA said that it was - but in fact it was very general and the banks did what they wanted to.

 

The Code has been replaced by BCOBS which is legally binding. Despite that, I am not aware of any legal actions, so far being brought under BCOBS except one against Santander by user:Mad Priest - and in which he has obtained a default judgment which I expect will eventually be setaside once Santander wakeup.

 

Compliance with BCOBS has nothing to do with FSA because BCOBS is actionable directly by the aggrieved customer.

 

I didn't know that it doesn't apply to charges - please link me to that. This is the first I have heard.

[kennyh]

Ashamed to say I haven't made an 'in depth' studyof the FSA Handbook(but will begin to do so tomorrow) and pleased to say that today's news covering judges and immigration has made it much clearer to me showing how regulations can carry the weight of law without there being an Act of Parliament for backing.

[BankFodder]

I really think that you need to lay out any concerns here.

 

BCOBS is largely unused and probably not yer fully understood as a result.

 

Please explain your points here. It is important so that we can discuss them and learn.

 

You brought up a number of interesting points - especially that BCOBS does not apply to charges and it is important to everyone that we understand why that might be so.

[kennyh]

 

You brought up a number of interesting pints - especially that BCOBS

does not apply to charges and it is important to everyone that we understand why

that might be so.

 

I must be defiitely 'losing it' since I sat down yesterday evening and composed a response indicating that much of my earlier observation stemmed from the regs and I assumed (something I rarely do but in this case felt justified) that you were much closer to 'the action' and would already be aware of the reservations expressed.

Bear in mind that I have never even completed a moneyclaim (having approached the courts down the N1 path in the past) and merely want to be certain of my ground before putting my money where.........

[BankFodder]

I've edited your post again. Sorry but we don't normally refer to external sites.

 

Also, it is important for the people who visit this site to see what the arguments and laws are right here.

 

I'm very happy to help you bring any BCOBS action. your situations seems to be a good candidate but I wouldn't want to make any mistakes. If you other information which can clarify or correct the views that I have been positing about BCOBS, please explain them here.

Then we can decide together whether or not to go forward.

[kennyh]

Bankfodder, YOU asked me to link you, in open forum, at #10 & #13 above et al then, when I do I'm edited out (so not as much losing it but LOSING out). Sorry CAG doesn't like external site referral but it's all I have and with the degree of uncertainty being expressed

BCOBS

is largely unused and probably not yet fully understood as a result.

I need to look somewhere.

Plus, I seem to recall other sites being mentioned in days gone by (GLC springs to mind).

Edited February 18, 2013 by kennyh
Add final para

[BankFodder]

When I asked you to link, I wanted authoritative source material. That is the only stuff that counts. You can't use any other material as the basis of an argument in front of a judge.

 

If you have looked at the links which we carry on this forum to BCOBS resources - I don't think that you will find anything which suggests that the complaint which I have proposed above under BCOBS is an unrealistic course of action to take.

 

I think that you now have to start deciding whether challenge the Coop bank for the way they have treated you and for the money they have taken from you

[BankFodder]

What are you doing about this now?

[kennyh]

I am, as I should already have done, doing my homework on CCA,UTCCR, FSA etc. After all, Lord Philips didn't have the benefit of BCOBs when he gave the OFT the, albeit figurative, clip round the ear and left the breadcrumbs regarding possible lines of approach on the bank charge problem. Given that I am faced with diametrically opposed views on the use of BCOB coupled with the apparent fact that there have, as yet, been no BCOB judgements awarded I also do need to care for my disabled son, which does, on occasion, present its own unique set of problems. I am going to progress this but, if only to avoid annoying more experienced Caggers who might take an interest, I am going to complete my homework.

Thanks for asking

Ken

[BankFodder]

Well make sure that your "diametrically opposed views" are supported by authority.

If they are not, then they are useless

Let us know what you find

[kennyh]

Of course I'll let you know what I find, however if what I wrote is true

there have, as yet, been no BCOB judgements awarded

then there are certainly questions to be asked on the 'pro' side.

[BankFodder]

If you want to link to some of the direct sources you are looking at, we could have a look as well and compare opinions.

[kennyh]

Is it not possible that Payment Services Regulations 2009 might be a better vehicle for this activity. After all I cannot be the only person who has had his account abused unilaterally by his bank sufficient to place said account into 'unauthorised' territory. Certainly the section titled 'Authorisation of Payment transactions' including regulations 55-68, and, quite probably, other regs as well, would seem to cover the ground? PSRs would certainly seem relevant to a significant degree. I shall read more tomorrow.