OFT reply to my complaint about bank

[Bookworm]

Although I complained about Halifax threatening to close my account, this concerns all banks across the board, so I've put it here as a very separate thread to my Halifax one, which is for all intents and purposes now closed.

 

This is what the OFT said:

 

 

Dear Mr & Mrs xxxx,

 

Enterprise Act 2002 ('the Act')

Unfair Terms in Consumer Contracts Regulations 1999 ('the Regulations')

Halifax Plc ('the Company')

 

Thank you for your letter of 11 April regarding default charges imposed by the above bank. Your complaint has been logged for our records in order to further our understanding of this market and to inform this and any future investigations we may conduct in relation to this matter.

 

I am sorry to hear about the difficulties you have experienced. Unfortunately the Office of Fair Trading does not have the power to provide advice on individual complaints, or to help consumers to seek redress. Our primary duties include the enforcement of Competition Law, the regulation of the consumer credit market through a licensing system and the application of consumer protection legislation in respect of matters that adversely affect the collective interests of UK consumers.

 

As you are already aware, the OFT is currently looking at the issue of penalty charges for credit cards. Please follow this link to our press releases for further information:

 

http://www.oft.gov.uk/News/Press + releases/2005/135-05.him

 

and more latterly

 

http://www.oft.gov.uk/News/Press + releases/2006/68-06.htm.

 

However this investigation does not include charges for other areas such as personal banking and other sectors where financial penalties are incurred for breaches of contract.

 

The Financial Services Authority (FSA) is responsible for the banking sector. It has responsibility for the application of the Unfair Terms in Consumer Contract Regulations 1999 ('the Regulations') in respect of personal banking contracts. The OFT and the FSA have agreed that the FSA will take the lead on complaints such as those which relate to unfairness in contracts relating to personal banking. The FSA's address is:

 

25 The North Colonnade

Canary Wharf

London E14 5HS

Telephone: 0845 606 1234

Website: http://www.fsa.gov.uk/.

 

The FSA do not have the power under the Regulations to intervene in individual disputes but the Financial Ombudsman Service can adjudicate if the company is unable to resolve matters satisfactorily. Their address is:

 

Financial Ombudsman Service

South Quay Plaza

183 Marsh Wall

London E14 9SR

Tel: 0845 080 1800

Website: http://www.financial-ombudsman.org.uk/.

 

In our recent statement about credit card default charges which we published on 5 April, we have said that, in our view, the principles embodied in the statement will apply to other default charges - and that the banks and other finance businesses are expected to consider the wider implications of

these principles and bring any similar charges they impose for breach of contract into line with them, where and as appropriate, bearing in mind the different legal and practical contexts in which they operate.

 

In essence, although we are confident that the high level legal principles applicable to charges in other areas may be analogous, we are conscious that that they will probably require some modification or fine tuning to reflect the practical differences, or separate legislative framework or jurisprudence, in those areas.

 

Essentially, analogous charges would be where the supplier of a product is entitled under the terms of the contract to make a charge to the consumer who has breached the contract, (those terms would then be subject to the test of fairness in the UTCCRs so that the charge is not an unfair penalty) As we have not done the detailed work in the area of other charges, such as mortgages, we could not say at this stage with any certainty exactly which charges would fall to be considered and whether the current level of charging is fair, in our view.

 

Sorry I cannot be any more specific at this stage, but as you know we have focused our investigation to date on credit cards, and more work would be required to be able to give any further detail.

 

Yours sincerely

 

Kathryn Gresty

Consumer Regulation Enforcement Division

[thecornflake]

"The Financial Services Authority (FSA) is responsible for the banking sector. It has responsibility for the application of the Unfair Terms in Consumer Contract Regulations 1999 ('the Regulations') in respect of personal banking contracts. The OFT and the FSA have agreed that the FSA will take the lead on complaints such as those which relate to unfairness in contracts relating to personal banking."

 

Looks like the FSA could be getting a few letters soon then

[Bookworm]

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