Office Of Fair Trading Test Case

[crfx250]

Wow! This is great news

[crfx250]

Here's the BBA's reaction:

Banks join OFT in test case to establish legal clarity on overdraft fees

 

26/07/2007

 

 

Tomorrow morning a number of banks and financial services organisations(1) are taking the initiative, working jointly with the Office of Fair Trading (OFT) and the Financial Services Authority (FSA), to ask the UK courts to clarify the legal position regarding bank overdraft fees.

Court process

 

Banks believe the fees customers pay for unarranged overdrafts are fair and clear. However, this is clearly an issue where customers, as well as the banks, would welcome legal clarity. This is why banks have joined with the OFT to approach the courts for a ruling on this issue. It is unclear how long the case will last as that will depend on the court process.

Working together

 

The banks have approached the Financial Services Authority (FSA) and the Financial Ombudsman Service (FOS) to agree a way forward to handle existing customer complaints. The FSA has agreed to issue a waiver(2), with immediate effect, to suspend the handling of customer complaints on this issue pending a decision by the court. Other banks who are not party to the court action will be applying to the FSA for a waiver and as such will be bound by the outcome of the court case.

What this means for the customer

 

The FSA has agreed that all existing or subsequent customer claims for refunds of bank charges will be recorded by the customer's bank or building society but any decision about potential refunds will be put on hold until the outcome of the court case. Offers which have already been made to customers will be honoured if the customer chooses to accept.

Banks will be writing to the UK courts requesting a stay(3) of all claims pending the outcome of this test case. The banks will be writing to customers with outstanding complaints advising them personally of their position.

Angela Knight, chief executive of the British Bankers' Association (BBA), said:

"Establishing legal clarity on the issue of bank charges is of paramount importance, not only for the banking industry, but for all customers now and in the future."

"The banks have always been firmly of the view that the fees they charge customers are fair and clear. The court case will clarify these points and provide certainty for customers and banks alike."

 

For further information, please contact:

Press Office (020 7216 8970 )

Out of hours contact (020 7216 8888 )

 

Notes to Editors:

(1)The BBA's members involved in the legal action are: Abbey; Barclays; Clydesdale; HSBC; HBOS; Lloyds TSB; Royal Bank of Scotland/NatWest; and Yorkshire banks; and Nationwide Building Society.

(2) The FSA this morning issued a press release announcing the details of this waiver. This can be downloaded from the FSA website (see link below).

(3) Banks will apply for a Stay of Proceedings on all current and pending cases to the Master of the Rolls for England and Wales, to the Attorney-General for Northern Ireland and to the Sheriff Courts in Scotland.

Related Links

 

FSA website (External Link)

OFT website - questions & answers (External Link)

[crfx250]

How the OFT works

So why is it the OFT have taken the plunge now?

 

Could it possibly be related to the two threats of legal action looming over

them for not taking action sooner? I rather think it could.

 

Here's their record on default charges so far:

 

Credit cards - April 2006: ''We wanted to bring about a swift change across the whole market in the shortest possible timeframe''

 

Bank charges - April 2007: ''There is no quick fix''

 

Bank charges - July 2007: ''The OFT considers that a quick determination of this point of principle will assist in securing a clear and orderly resolution of the fairness of these charges.

[crfx250]

So what are you doing here Billy - apart from trolling?

 

What do you mean ''what are you doing here'' ? It's his thread! He was

the first member to pick up on the OFT announcement.

[crfx250]

Well I'll answer it for you then:

 

Billy has been instrumental in putting pressure on the OFT to act on the whole issue of default charges. His knowledge of the workings of the OFT

are vast.

 

It is people like him that do unsung stuff behind the scenes for the benefit

of people like you. You don't have to be a claimant to help the cause you know.

 

Calling him a troll was a comment made in ignorance.

[crfx250]

Hmm... all that in 35 posts - was this before or after Vietnam?

 

I also noticed that wherever he goes, you're not far behind him either

 

I don't judge people's credibility by the number of their posts on CAG.

 

You bet I'm right behind him.

[crfx250]

I would suggest the delivery of your original attack on him was less than exemplory. Next time you call a true campaigner a troll don't expect not

to be critisised for it.

 

He's already accepted the flaw in his delivery, unlike yourself.

[crfx250]

It would be great if it was decided by December but I doubt it possibly could. The OFT's case makes no mention at all of disclosure of the banks charge costs in their action.

 

They seem to be waiting on the UTCC aplication ruling before asking for disclosure. They won't be able to make a decision on the fairness of the charges until they have the banks true costs. And eeking that out of 7 banks will take forever and a day.

[crfx250]

The OFT and banks have been negotiating it for at least a month. It's common knowledge

[crfx250]

Well I did. It's also mentioned in just about every press piece on the subject

[crfx250]

post this press piece then...

 

Why do you doubt what i'm saying?

 

Do you think seven banks and two regulators woke up on thursday and

simultaneously decided to trot off to court without talking about it?

They signed an agreement, hundreds of lawyers were involved.

[crfx250]

Head in hands.

 

I'm saying we now know the negotiations were going on well before thursdays announcement. I'm not saying we knew they were talking about

beforehand.

 

If you'd bother read Chris 66 post properly and my subsequent answer

it might just shove you in the right direction

[crfx250]

crfx250 never said HE new about this a month ago, he said the BANKS knew about it a month ago.

 

It is now common knowledge that this deal has been arranged behind everyones back, for over a month. That is why Martin is so angry.

 

Thanks for that. I'm glad someone grasped it

[crfx250]

you meant it was common knowledge meaning people knew... its now obvious to normal people that this was organised a while ago... thats obvious now...

 

Ding!

[crfx250]

You seem easily satisfied and confident that the OFT will win this with their very strong case, I presume therefore you have seen the details of it. My conspiracy to you is your complaicanse to me, I feel it is natural to be cynical about a case that is announced out of the blue, intimating that the details were discussed outside of the public domain, at the peak of consumer action, with no prior discourse with consumer groups, and most importantly biased toward the banks (or defendant if you please). If you or I's businesses were accused of such a scale of unlawful charges we would certainly not be allowed to continue with our actions and generate more consumer complaints would we?

 

You suggest you are happy to wait out a couple of years of proceedings with no suggestion of such having any transparency and simply hope the banks will then voluntarily pay up if judged against and not appeal and drag it out another long amount of time?! To paraphrase Mr Lewis on the Ch4 News, If consumers are to wait years only to then have to ask for their charges back then this is a sham. So is that conspiracy theory also?

 

BTW libel is one of the most difficult laws with which to fulfill the burden of proof within a free society, if you think someone can be colpable for libel based upon their personal opinions posted on an online BBS*....or a video on YouTube..... eh yeah reality check!

 

*The comments posted by the author on this forum are purely a portrayal of his opinions and should not be taken as acuusations or views of any greater scope of the BBS.....OK now?

 

We just have to be realistic. No one is suggesting the situation is ideal but

given the choice of waiting for a definitive decision for 2 or 3 years and stumbling along indefinately I know what I'd plump for. And I'm confident

that that view is shared by Bankfodder, Stephen Hone, Martin Lewis and Tom Brennan.

[crfx250]

I really don't want to appear negative but the FSA are not going to lift their claim waiver on the basis that a bunch of consumers don't like. It just isn't gonna happen. It's part of the whole Bank/FSA/OFT agreement.

The FSA are afterall funded by the banks and are hardly likely to tear up

the deal.

 

Moving on a bit, assuming the OFT win the UTCCR issue, the banks will have to disclose charge costs to the OFT to calculate a fair charge. I think this will be the biggest sticking point to a resolution and the most time consuming. As only the banks hold the information it goes without saying that they'll be selective in what they hand over.

 

And it's no coincidence that Angela Knight has started throwing in stuff like ''account reviews'', ''credit checks'' and ''judgements'' she says the

banks have to make every time someone defaults

[crfx250]

If consumers do complain and the waiver is not overturned then this will only serve to demonstrate that

1) the OFT/FSA and the banks are too cosy

2) the OFT has no power or intention to represent the consumer effectivley

But we know this! It's been demonstrated countless times! Another demonstration of it has has no value!

 

If the FSA receive enough of an increased workload and it is because they are a limited company then they will incur increased overheads which they will want to avoid

But the FSA is funded by the banks! The banks have trillions. Do you seriously think the FSA is going to change it's policy for the sake of a few stamps and a fob off letter?

[crfx250]

FM BW

I know you cannot judge tone from responses so I'm going to assume that you meant your comment to be informative rather than yet another negative response on this thread.

 

I'm not alone then

[crfx250]

It meant precisely what I said.

 

TB was suing for exemplary damages, which, despite the flag waving and general cheering of people hailing his case as some breakthrough, was anything but, and had little, if any, relevance to the case the OFT is starting against the banks. Furthermore, the case as was being decided today was quite simply to decide whether he would be allowed to proceed with his case or not, which is even less relevant to the OFT case.

 

Factual is not negative. It is factual.

 

The clue is in the So?

 

So? is negative

 

This is desperate...head in hands...

[crfx250]

'So?' is a question. Rhetorical maybe, but still a question. Nothing negative about it.

 

Els

 

 

Really? How about this one:

 

''Yawn. One can only hope eventually, you'll get bored.''

[crfx250]

Hi WB, tomterm, & Zoot

Would it not have been better, and much more in the consumer's interest, for OFT to have bought an actual claim, containing all of the issues involved, to a test case? Whilst the case itself would take longer to resolve, the overall result would be much shorter.

- Adam

 

That's a good question and one that was put to John Fingleton quite recently by Paul Farrely MP in a Parliamentry Select Committee hearing.

 

I can't find the link to the minutes just now but the answer was something

like ''It is not in the OFT's remit to sponser cases''. Perhaps WB could elaborate.

[crfx250]

I'm a bit surprised that this news hasn't been greeted with much enthusiasm:

 

''The FSA said yesterday that while the court case is progressing, banks can put customer claims on hold. But amid criticism that the waiver could effectively allow firms to wriggle free from handling complaints for years to come, it promised to review the waiver after two months''

 

Apart from the obvious, it encouragingly suggests that the waiver was not part of the deal with the banks. Although this leads to the question of why they decided on the waiver in the first place it does, at least on the face of it, look like the FSA are listening and responding to consumers. And that's got to be cause for celebration

[crfx250]

where was this news crfx?

 

http://www.consumeractiongroup.co.uk/forum/general/108220-fsa-review-waiver.html

[crfx250]

The FSA said from the start, that this would be reviewed after 2 months. It was in the initial agreement, and nothing to do with listening to us i'm afraid. I read their statement when it was announced.

 

FSA grants waiver to firms on complaints handling

 

QUOTE:- "The FSA will review the waiver in two months time to ensure, among other things, that firms are complying with its conditions. The FSA can also revoke the waiver at any time if it considers that the waiver is no longer appropriate, for example if progress on the test case is not being made or if a delay in the resolution of the test case is likely to cause undue risk to consumers."

 

Sounds like they have re-stated this, just to make us think they are listening.

 

Still good news though, and i do hope pressure from consumers can make them withdraw it, when the 2 months is up.

 

I stand corrected

[crfx250]

Me, I'll keep following some of the more intelligent campaigns that are beginning to build up here.

 

Muggy

 

 

I must take issue with you here. E-mailing MP's complaining about the waiver is not an intelligent campaign. MP's don't have power to remove it.

 

Also the £5 figure in point 1 of the charter is there for a very good reason

and one I'm surprised that you can't see, but it's of no relevence to us what we think a fair charge should be because we have no legal right

to set it.