Office Of Fair Trading Test Case

[photoman]

I love the images that the "stalking horse" description conjures up..... some big lumbering clumsy pantomine horse... which after all is what this hole business is.... a bloody pantomine !!

 

"He's behind you..." !!!!

 

.... Now which of you is going to volunteer to dress up in drag as the pantomine dame ?

 

PM

[TECHSPEC]

The discussions between the banks/OFT/FSA about the agreement of

the test case were going on way before June.

 

I believe the A&L case has been settled out of court anyway so disclosure

won't be made

 

Everythin i have read, says the banks approached the OFT in June.

[un1boy]

As I understand it, evidence from the banks to the OFT of how much breaches cost are not relevent untill there is a legal ruling on whether UTCRR aplies. Surely the application of UTCRR is the test as to whether the charges are lawful or not.

 

It is notable that the test case agreement does not include any reference to disclosure of the banks charge costs and will only come into play once the application of UTCRR is established.

 

Ok, I understand.

 

Why is a court ruling needed for this though? I don't understand that - so any contract now can only be reegulated by the UTCRR if a court rules? I'm confused....

[tomterm8]

Ok, I understand.

 

Why is a court ruling needed for this though? I don't understand that - so any contract now can only be reegulated by the UTCRR if a court rules? I'm confused....

 

The regulatory framework gives the OFT the power to launch actions to get a court order to determine whether a general term is unfair in all circumstances. Normal legal actions just deal with individual cases; the regulatory framework allows the OFT and court to proactively bring a case to court to determin whether a term is unfair even if no consumer brings a case against on the issues (or, in this case, where the Banks refused to appeal so that a legal precident could be formed).

[noomill060]

Hello to the guests who have mysteriously appeared on this thread!

 

I wonder which one of you is playing the back end of the pantomime horse!

[noomill060]

Oh youve just disappeared, (no doubt in a puff of smoke!)

 

**slaps knee**

 

(noomill060 will be appearing in "Aladdin" at the South Belfast Knee Breakers Club from December 3rd)

[un1boy]

The regulatory framework gives the OFT the power to launch actions to get a court order to determine whether a general term is unfair in all circumstances. Normal legal actions just deal with individual cases; the regulatory framework allows the OFT and court to proactively bring a case to court to determin whether a term is unfair even if no consumer brings a case against on the issues (or, in this case, where the Banks refused to appeal so that a legal precident could be formed).

 

Cheers.

[TUTTSI]

Everythin i have read, says the banks approached the OFT in June.

 

 

When I settled with barclaycard back in April 07 the clerk told me a test case was being worked on as we spoke, the banks legal teams were already in discussions. I sincerely believe that this OFT case has been on the cards for a long time. At first I thought it was provado but when the anouncement came, I realised that was what he was speaking about.

 

DS

[TECHSPEC]

That explains the delay tactics then.

 

Thats why the waiver should not have included cases already started. The banks were able to abuse their knowledge of the planned test case, to stop these people getting their money.

[crfx250]

I sincerely believe that this OFT case has been on the cards for a long time. DS

 

I would agree. The OFT were due to announce the findings of their inquiry

into penalty charges in March but then issued the 'no quick fix' statement

on 29 March so they must have delayed it knowing a test case was on the cards.

 

Apart from anything else it must have taken at least 6 months for all the

parties to agree on the terms of the case. With 8 banks, the BBA, OFT, FSA and the FOS all with thier own hordes of lawyers, it's not the sort of

agreement you could knock up in a few weeks.

 

My FoIA request (below) is due for a response tomorrow and might shed

a bit more light on it.

 

 

Dear FSA FoIA coordinator

 

I am writing to you to request information about the July 26 announcement 'FSA grants waiver on complaints handling'.

 

This is a request under the Freedom of Information Act 2000 and I believe should not be subject to any of the qualified or absolute exemptions.

The request is in 6 parts:

 

1) On what date was it agreed that the OFT and banks would take a test case? Was the FSA involved in those discussions?

 

2) On what date was it agreed that the FSA would introduce a waiver?

 

3) On what date was your report entitled 'FSA grants waiver on complaints handling' agreed for publication' ?

 

4) On what date was it decided to publish the said report on 27 July?

 

5) Please provide the advice supplied to senior management in regard to the date of publication.

 

6) Please supply all correpondence (either letter or e-mail) between the OFT and the FSA between January 2007 and 27 July 2007 in relation to bank charges.

 

I look forward to a substantive response within 20 working days. I have considered this request carefully, checking each request against the exemptions in the Freedom of Information Act 2000, and if you fail to provide the information requested then I will ask for an internal review. If I am unsatisfied with that response then I will make a complaint to the Information Commissioner and ask him to make a Decision Notice requiring the FSA to release the information. Having analysed previous Decision Notices, I am more than confident that the Information Commissioner would require ALL this information to be released.

[NitrousOxide]

Hi,

Don't know if it's been mentioned but the petition is currently at number 3

[TUTTSI]

I would agree. The OFT were due to announce the findings of their inquiry

into penalty charges in March but then issued the 'no quick fix' statement

on 29 March so they must have delayed it knowing a test case was on the cards.

 

Apart from anything else it must have taken at least 6 months for all the

parties to agree on the terms of the case. With 8 banks, the BBA, OFT, FSA and the FOS all with thier own hordes of lawyers, it's not the sort of

agreement you could knock up in a few weeks.

 

My FoIA request (below) is due for a response tomorrow and might shed

a bit more light on it.

 

 

Dear FSA FoIA coordinator

 

I am writing to you to request information about the July 26 announcement 'FSA grants waiver on complaints handling'.

 

This is a request under the Freedom of Information Act 2000 and I believe should not be subject to any of the qualified or absolute exemptions.

 

The request is in 6 parts:

 

1) On what date was it agreed that the OFT and banks would take a test case? Was the FSA involved in those discussions?

 

2) On what date was it agreed that the FSA would introduce a waiver?

 

3) On what date was your report entitled 'FSA grants waiver on complaints handling' agreed for publication' ?

 

4) On what date was it decided to publish the said report on 27 July?

 

5) Please provide the advice supplied to senior management in regard to the date of publication.

 

6) Please supply all correpondence (either letter or e-mail) between the OFT and the FSA between January 2007 and 27 July 2007 in relation to bank charges.

 

I look forward to a substantive response within 20 working days. I have considered this request carefully, checking each request against the exemptions in the Freedom of Information Act 2000, and if you fail to provide the information requested then I will ask for an internal review. If I am unsatisfied with that response then I will make a complaint to the Information Commissioner and ask him to make a Decision Notice requiring the FSA to release the information. Having analysed previous Decision Notices, I am more than confident that the Information Commissioner would require ALL this information to be released.

 

I look forward to hearing the outcome of your letter, I hope they play ball and release ALL the info that you have requested!!

DS

[TECHSPEC]

Hi,

Don't know if it's been mentioned but the petition is currently at number 3

 

Nice one!

 

Open petitions

[un1boy]

Haha, technical problem my a**:

 

** Barclays needs central bank loan **

Barclays says a technical problem forced it to borrow £1.6bn and denies it is facing a cash crisis.

http://news.bbc.co.uk/go/em/fr/-/1/hi/business/6971731.stm >

[andrew1]

...and I wonder how they will cope with paying out everyone automatically who have had charges taken once they lose this case - which they will.

[noomill060]

cfrx250- the OFT's "no quick fix statement" back in March makes absolute sense now.

[noomill060]

well, not sense in the usual way, but as they were already negotiating the test case, their reasoning is blatantly obvious.

[un1boy]

...and I wonder how they will cope with paying out everyone automatically who have had charges taken once they lose this case - which they will.

 

Doesn't matter - it was on the news today that the bank's are making millions in interest whilst claims are stayed, so that will probably pay for it.

 

I wouldn't be so sure that they will lose either - I reckon they might just win you know.....especially due to the impact this would have on the economy!!

[crfx250]

...and I wonder how they will cope with paying out everyone automatically who have had charges taken once they lose this case - which they will.

 

 

If the OFT wins the case I can't see what mechanism exists that would

automatically refund past charges. I'm sure the courts don't have the

power to order blanket refunds and nor do the regulators.

 

Below is a transcript of a Paul Lewis interview with our old chum, the FSA's Clive Briualt:

 

 

 

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 

 

 

MONEY BOX

 

Presenter: PAUL LEWIS

 

 

TRANSMISSION: 27th JANUARY 2007 12.00-

12.30pm RADIO 4

 

 

 

LEWIS: Hello. In today’s programme, millions of

homeowners could recover £100 or more each from their mortgage

lender after the regulator says some charges are unfair. The European

Court of Justice says that a government pension compensation scheme

is not good enough, but will it be improved? Bob Howard’s here with

the latest on claiming back bank charges.

 

HOWARD: Are judges losing patience with banks

who don’t seem to want their day in court?

 

WOMAN: The judge is finally standing up to the

banks and the banks’ solicitors and saying come on, stop wasting our

time.

 

LEWIS: And should you link your gas and

electricity bills to the wholesale price of fuel?

 

But first, millions of homeowners could get a refund from their

mortgage lender after yet another ruling that the financial services

industry has been treating its customers unfairly. This time, the

regulator has told banks and building societies that the fees they charge

people to leave a mortgage deal – so called exit fees – have been

unfairly increased after the mortgage began. Ten years ago exit fees

averaged less than £60. Today, they’re more than £200, forcing

borrowers to pay a much higher fee than they were told about when

they took out the loan. Money Box revealed that the Financial Services

Authority was investigating these charges more than a year ago and last

summer mortgage adviser Danny Lovey told us why he felt the

regulator had to act.

 

LOVEY: They’re a scandal and people like me are

embarrassed and very irritated when lenders are putting charges up.

What we want to do really is to keep the lenders honest and transparent.

When they move the goalposts when the client is actually in the middle

of a mortgage deal or towards the end of a mortgage deal, they have the

consumer over a barrel and I just think it’s wrong.

 

LEWIS: Well 6 months on, the FSA has taken

action. Clive Briault is its Head of Retail Markets.

 

BRIAULT: We’ve told lenders that if over the last

few years they have increased these exit fees by a substantial amount,

then they have to decide whether to reduce the fee back to what it was

originally when the consumer took out the mortgage or alternatively

justify any increase that they’ve imposed. And we believe this will be

of benefit to millions of consumers because in the vast majority of cases

what the lenders will do is bring the fee back to its original level.

 

LEWIS: What about new customers though?

Does it do anything for them or can a mortgage lender fix the fee at

£500 or £1,000 as long as they then stick to that when the mortgage

comes to an end?

 

BRIAULT: They have to be absolutely clear about

what their fees are and the basis on which any changes during the life of

a contract could be made.

 

LEWIS: But it doesn’t have to reflect the actual

cost?

 

BRIAULT: It doesn’t, no.

 

LEWIS: But what about the 6 million or so people

who have already remortgaged in the last 5 years, paid those fees.

What should they do?

 

BRIAULT: Well if those people have paid an exit fee

which they thought was unfairly high because they paid a fee which

was substantially higher than the fee that they thought they would have

to pay when they entered into the mortgage, they should complain to

their former lender.

 

LEWIS: And they should get the difference back?

 

BRIAULT: Well unless the lender can justify a

reason for the increase, then they should get the difference back, yes.

 

LEWIS: And are you telling lenders to find these

people or are they going to have to make a claim?

 

BRIAULT: We’re not telling lenders that they have to

undertake a review of all of their past business.

 

LEWIS: But they must have the records. Why

not?

 

BRIAULT: We don’t have the powers under the

unfair contract terms to instigate a past business review.

LEWIS: Did you ask them? Did you suggest to

them they might do this as part of your negotiations?

 

BRIAULT: Well clearly, yes we did discuss that with

them …

 

LEWIS: And they said no?

 

BRIAULT: … in terms of whether the industry would

be prepared to do that on a voluntary basis …

 

LEWIS: And they said no?

 

BRIAULT: … and for something which would cover

the whole of the industry.

 

LEWIS: They said no?

 

BRIAULT: Well they certainly didn’t say yes

immediately and I think had we tried to engineer and broke such a

solution, we would have ended up not benefiting millions of consumers

now that probably are entering into a very protracted negotiation which

could have gone on for a long time.

[un1boy]

...and I wonder how they will cope with paying out everyone automatically who have had charges taken once they lose this case - which they will.

 

If the OFT wins the case I can't see what mechanism exists that would

automatically refund past charges. I'm sure the courts don't have the

power to order blanket refunds and nor do the regulators.

 

Below is a transcript of a Paul Lewis interview with our old chum, the FSA's Clive Briualt:

 

 

 

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

 

 

 

MONEY BOX

 

Presenter: PAUL LEWIS

 

 

TRANSMISSION: 27th JANUARY 2007 12.00-

12.30pm RADIO 4

 

 

 

LEWIS: Hello. In today’s programme, millions of

homeowners could recover £100 or more each from their mortgage

lender after the regulator says some charges are unfair. The European

Court of Justice says that a government pension compensation scheme

is not good enough, but will it be improved? Bob Howard’s here with

the latest on claiming back bank charges.

 

HOWARD: Are judges losing patience with banks

who don’t seem to want their day in court?

 

WOMAN: The judge is finally standing up to the

banks and the banks’ solicitors and saying come on, stop wasting our

time.

 

LEWIS: And should you link your gas and

electricity bills to the wholesale price of fuel?

 

But first, millions of homeowners could get a refund from their

mortgage lender after yet another ruling that the financial services

industry has been treating its customers unfairly. This time, the

regulator has told banks and building societies that the fees they charge

people to leave a mortgage deal – so called exit fees – have been

unfairly increased after the mortgage began. Ten years ago exit fees

averaged less than £60. Today, they’re more than £200, forcing

borrowers to pay a much higher fee than they were told about when

they took out the loan. Money Box revealed that the Financial Services

Authority was investigating these charges more than a year ago and last

summer mortgage adviser Danny Lovey told us why he felt the

regulator had to act.

 

LOVEY: They’re a scandal and people like me are

embarrassed and very irritated when lenders are putting charges up.

What we want to do really is to keep the lenders honest and transparent.

When they move the goalposts when the client is actually in the middle

of a mortgage deal or towards the end of a mortgage deal, they have the

consumer over a barrel and I just think it’s wrong.

 

LEWIS: Well 6 months on, the FSA has taken

action. Clive Briault is its Head of Retail Markets.

 

BRIAULT: We’ve told lenders that if over the last

few years they have increased these exit fees by a substantial amount,

then they have to decide whether to reduce the fee back to what it was

originally when the consumer took out the mortgage or alternatively

justify any increase that they’ve imposed. And we believe this will be

of benefit to millions of consumers because in the vast majority of cases

what the lenders will do is bring the fee back to its original level.

 

LEWIS: What about new customers though?

Does it do anything for them or can a mortgage lender fix the fee at

£500 or £1,000 as long as they then stick to that when the mortgage

comes to an end?

 

BRIAULT: They have to be absolutely clear about

what their fees are and the basis on which any changes during the life of

a contract could be made.

 

LEWIS: But it doesn’t have to reflect the actual

cost?

 

BRIAULT: It doesn’t, no.

 

LEWIS: But what about the 6 million or so people

who have already remortgaged in the last 5 years, paid those fees.

What should they do?

 

BRIAULT: Well if those people have paid an exit fee

which they thought was unfairly high because they paid a fee which

was substantially higher than the fee that they thought they would have

to pay when they entered into the mortgage, they should complain to

their former lender.

 

LEWIS: And they should get the difference back?

 

BRIAULT: Well unless the lender can justify a

reason for the increase, then they should get the difference back, yes.

 

LEWIS: And are you telling lenders to find these

people or are they going to have to make a claim?

 

BRIAULT: We’re not telling lenders that they have to

undertake a review of all of their past business.

 

LEWIS: But they must have the records. Why

not?

 

BRIAULT: We don’t have the powers under the

unfair contract terms to instigate a past business review.

 

LEWIS: Did you ask them? Did you suggest to

them they might do this as part of your negotiations?

 

BRIAULT: Well clearly, yes we did discuss that with

them …

 

LEWIS: And they said no?

 

BRIAULT: … in terms of whether the industry would

be prepared to do that on a voluntary basis …

 

LEWIS: And they said no?

 

BRIAULT: … and for something which would cover

the whole of the industry.

 

LEWIS: They said no?

 

BRIAULT: Well they certainly didn’t say yes

immediately and I think had we tried to engineer and broke such a

solution, we would have ended up not benefiting millions of consumers

now that probably are entering into a very protracted negotiation which

could have gone on for a long time.

 

That's fair enough, but what they could have done was publicise it more and maybe issue leaflets to householders and emails and stuff to make more people aware and with exact steps on how to claim - maybe even getting consumer direct invovlved.

 

An advertising campaign maybe saying something like - call consumer direct now who will tell you how to get the difference back.

 

But no, the FSA just let the media deal with it.....

[callingcard]

I am in the process of claiming back fees for overlimit and late payment from Capital One. They made a GOGW in a letter of 13th. August, in which they said they had posted 2 cheques to me for £2,454.22, I received one of the cheques on Wednesday (29th. August). As the other cheque has not yet arrived I phoned the court as today is 28 days from the service date. I wanted to find out if Cap One had submitted a defence as they said they intended to do that in their Acknowledgment of Service. I was told that all bank charge claim cases had been stayed. I asked if that was for all cases currently in the courts, I was told yes and I would get a notification in the post. The stay is until the High Court rules on the legality of bank charges in the OFT v Banks test case I have read in these forums that banks have applied for a stay in individual cases, but a blanket stay is going to freeze every case. What do we do now?

 

Surely the banks aren't pleading poverty I know the credit market is tougher than it was a few weeks ago, but surely the money stays in the banking system and even if it is spent the money finds it's way back into a bank!

 

I just hope that Cap One have posted the second cheque to me.

 

Regards CC

[adamc6671]

Hi callingcard

 

Its my understanding that the OFT Test Case is only relevant to bank account charge claims, and NOT Credit Card claims. From your post, your charges are for late payment and overlimit. I assume therefore that yours is a credit card claim, which the Court should NOT be staying.

 

I suggest you ring the Court and make it clear that yours is a claim for Credit Card account charges, and NOT a bank account. My understanding is that they should allow the claim to go ahead - I certainly hope so, as I expect to be filing a claim against Cap One in about 2 weeks, after the LBA has expired - thread is 'JimmyBoy vs Cap One'

 

Have a read of Zoot's thread here - it should help -

 

http://www.consumeractiongroup.co.uk/forum/general/111117-stays-info-guidance.html

 

All the best - adam.

[callingcard]

Yes, it is a credit card claim. It's too late to phone the court again today, so it's 10am. Monday. I want to get the default notice on my credit record removed which Cap One have said they won't do. So I want to proceed to judgement anyway. Theyv'e offered most of the money and I will be happy if the other cheque arrives tomorrow (although I might as well see if I can get some more money (Contractual Interest) out of them anyway.

 

Thanks for letting me know, I was about to start a claim against Abbey, but it's under £200 so not so rewarding as the CC charge refund. Although it's a business account (still open) does that make a difference?

 

Regards Calling Card

[Rtech]

The Banks are actually in a 'no lose'situation....If the test case goes against them,then they will still be allowed a 'small'admin charge for the exceeding OD's etc,and if they have to refund,going back 6 years this 'small charge will then be deducted from whatever claimants are due...BUT then all the Banks will charge All customers a service charge on any account they have and this will raise even more money for them,as free banking comes to an end....all this in the name of PROFIT!!

[adamc6671]

Thanks for letting me know, I was about to start a claim against Abbey, but it's under £200 so not so rewarding as the CC charge refund. Although it's a business account (still open) does that make a difference?

 

Regards Calling Card

 

 

Hi cc

 

Not sure about business claims, but I think the 'rules' are different. Most Bank claims are now being stayed, and its not that easy to get stays lifted, except for Abbey claims where they admit breach of contract in their defence, which they, apparently no longer do!

 

See this for much more info -

 

http://www.consumeractiongroup.co.uk/forum/abbey-bank/111571-abbey-court-hearings-important.html

 

It might help if you started threads for your claim(s) in the relevant forum - that way you'll get more specific advice than on this general forum.

 

All the best - Adam.