Office Of Fair Trading Test Case

[crfx250]

----- Original Message -----

From: Independent Complaints Scheme FSA

To: crfx

Sent: Friday, August 31, 2007 4:49 PM

Subject: RE: Your complaint against the FSA

 

 

 

Dear crfx

With reference to your emailed response of 29 August 2007 to our email of the same date, we note your comments. I can confirm that our assessment of allegation one of your complaint is that you are dissatisfied with the CCC's responses to your enquiries relating to the FSA's decision in principle to grant firms, who apply for it, a waiver from the time limits contained in the FSA's complaints-handling rules in relation to unauthorised overdraft charges. We will investigate all retrievable copies of communications between you and the CCC, in this respect, which would include recordings of telephone calls.

In explaining that we were unable to investigate complaints relating to the actual waiver, we were not attempting to classify your initial enquiry to the CCC as a complaint (in fact, in our email of 29 August, we state: "we note that your original enquiry to the CCC..."), but were just trying to explain what matters we can (and cannot) investigate under the Complaints Scheme in an attempt to manage your expectations. Therefore, to reaffirm, we can and will investigate your complaint relating to the CCC both in relation to allegation one and allegation two (the assessment of which you do not appear to dispute).

With regards to the information you submitted to Clive Briault's office on 24 August 2007, it is standard procedure for correspondence from consumers/non-regulated firms to be passed to the CCC for reply. However, as the CCC was aware that you had raised a complaint with us, it felt it appropriate that we acknowledge receipt of this further information.

We will next contact you on or before 19 September 2007 with an update, which will hopefully constitute our substantive response to your complaint.

Yours sincerely

______________________________

Craig Drury

Complaints Team

Company Secretariat

The Financial Services Authority

http://www.fsa.gov.uk/Pages/About/complaints

 

 

Original Message -----

From: crfx

To: Independent Complaints Scheme

Sent: Friday, August 31, 2007 6:53 PM

Subject: Re: Your complaint against the FSA

 

Thank you for your e-mail of 31 August.

 

With regard to allegation one I note that you concede that my original

inquiry to CCC was not a complaint and this therefore renders your unprompted explanation as to your complaints criteria irrelevant.

 

Your thoughtful attempts to ''manage'' my expectations are really not necessary despite - and judging by the FSA's consistently woeful performance as a financial regulator - your expectation management skills are, I'm sure, of the highest order.

 

 

 

Further Complaint

 

Your ref: FO10737

 

I now need to make a further complaint with regard to the FSA's

failure to respond to my FoIA request within the 20 working day

limit.

 

The FSA is now in breach of the Freedom of Information Act 2000.

 

The Information Access Dept claims to have sent a response by

e-mail twice today but this is not the case.

 

crfx

[un1boy]

----- Original Message -----

From: Independent Complaints Scheme FSA

To: crfx

Sent: Friday, August 31, 2007 4:49 PM

Subject: RE: Your complaint against the FSA

 

 

 

Dear crfx

 

With reference to your emailed response of 29 August 2007 to our email of the same date, we note your comments. I can confirm that our assessment of allegation one of your complaint is that you are dissatisfied with the CCC's responses to your enquiries relating to the FSA's decision in principle to grant firms, who apply for it, a waiver from the time limits contained in the FSA's complaints-handling rules in relation to unauthorised overdraft charges. We will investigate all retrievable copies of communications between you and the CCC, in this respect, which would include recordings of telephone calls.

 

In explaining that we were unable to investigate complaints relating to the actual waiver, we were not attempting to classify your initial enquiry to the CCC as a complaint (in fact, in our email of 29 August, we state: "we note that your original enquiry to the CCC..."), but were just trying to explain what matters we can (and cannot) investigate under the Complaints Scheme in an attempt to manage your expectations. Therefore, to reaffirm, we can and will investigate your complaint relating to the CCC both in relation to allegation one and allegation two (the assessment of which you do not appear to dispute).

 

With regards to the information you submitted to Clive Briault's office on 24 August 2007, it is standard procedure for correspondence from consumers/non-regulated firms to be passed to the CCC for reply. However, as the CCC was aware that you had raised a complaint with us, it felt it appropriate that we acknowledge receipt of this further information.

 

We will next contact you on or before 19 September 2007 with an update, which will hopefully constitute our substantive response to your complaint.

 

Yours sincerely

______________________________

Craig Drury

Complaints Team

Company Secretariat

The Financial Services Authority

http://www.fsa.gov.uk/Pages/About/complaints

 

 

 

 

 

Original Message -----

From: crfx

To: Independent Complaints Scheme

Sent: Friday, August 31, 2007 6:53 PM

Subject: Re: Your complaint against the FSA

 

Thank you for your e-mail of 31 August.

 

 

With regard to allegation one I note that you concede that my original

inquiry to CCC was not a complaint and this therefore renders your unprompted explanation as to your complaints criteria irrelevant.

 

 

Your thoughtful attempts to ''manage'' my expectations are really not necessary despite - and judging by the FSA's consistently woeful performance as a financial regulator - your expectation management skills are, I'm sure, of the highest order.

 

 

 

 

Further Complaint

 

 

Your ref: FO10737

 

I now need to make a further complaint with regard to the FSA's

failure to respond to my FoIA request within the 20 working day

limit.

 

 

The FSA is now in breach of the Freedom of Information Act 2000.

 

 

The Information Access Dept claims to have sent a response by

e-mail twice today but this is not the case.

 

 

crfx

 

Interesting - what info are you requesting under the FoIA?

[crfx250]

Interesting - what info are you requesting under the FoIA?

 

 

It's on the FSA FoIA thread here

 

http://www.consumeractiongroup.co.uk/forum/general/109188-fsa-foia-request.html

 

And I have received and posted the response

[un1boy]

great, thanks!

[noomill060]

cfrx- I believe that the FoIA applies to public/government organisations only.

Is the FSA a government body or a private one? I know it was set up by the government, but is it funded by the Banks or the govt?

 

If it is actually independent of the govt, they may be able to weedle out of your request.

 

Just a thought, you have my 100% support.

[crfx250]

The FSA is a 'public authority' and even though it's funded by the industry

it is answerable to the Treasury.

 

It's just as full a member of the Freedom of Information scheme as any other and it has to abide by the same FoIA rules as any other public body

 

Freedom of information

[noomill060]

Cool- have a listen to Moneybox on Radio 4 on now, they are discussing the waiver.

 

BBC NEWS | Programmes | Moneybox

[Michael Browne]

OFT files details of case against unauthorised overdraft charges

 

126/07 31 August 2007

The OFT has today filed particulars of claim at the High Court on the application of the law in respect of unauthorised overdraft charges, and these documents will be available on the OFT website next week after they have been served on the other parties. The documents relate to the question of whether the fairness test in the Unfair Terms in Consumer Contract Regulations (UTCCRs) applies to the relevant charges.

 

The OFT is continuing its financial investigation to determine whether or not unauthorised overdraft charges are fair, based on its view that the fairness test does apply to them. This investigation is due to be completed by the end of the year.

 

The banks take the view that the charges are not covered by the fairness test in the UTCCRs and the court case at the beginning of 2008 is designed to test this point of law. It will not lead to a judgment as to whether the charges themselves are fair or not. The OFT will decide after the initial judgment what steps to take should it win the test case and conclude from its financial investigation that any of the charges are unfair. The OFT will publish its market study on the current account market in December 2007.

 

 

[crfx250]

Cool- have a listen to Moneybox on Radio 4 on now, they are discussing the waiver.

 

BBC NEWS | Programmes | Moneybox

 

 

Thanks Noom!

[un1boy]

cfrx- I believe that the FoIA applies to public/government organisations only.

Is the FSA a government body or a private one? I know it was set up by the government, but is it funded by the Banks or the govt?

 

If it is actually independent of the govt, they may be able to weedle out of your request.

 

Just a thought, you have my 100% support.

 

The FSA is actually a limited company and is, as you say, funded by the companies it "regulates", but because it works for a the government and is a public agency, it is covered by the FoIA....

[noomill060]

Angela Knight! Arggggggggg!!!! God that woman annoys me!

 

Martin Lewis was right on the money. Undemocratic.

[crfx250]

He He. Don't you worry, she'll get her come uppence before long.

[noomill060]

Yeah, I reckon shes cruising for a bruising from Martin Lewis!

 

She gonna get decked, live on TV at some point!

[noomill060]

Parkinson should invite her on his show, along with Rod Hull and Emu....

[determindator]

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)

 

I am hoping we are experiencing the Fairy Godmother affect, when we get the complexities of the case going we receive magic to keep us going:)

[un1boy]

The OFT are thinking of withdrawing the test case:

 

 

OFT may compromise on bank fees

 

By Ian Pollock

Personal finance reporter, BBC News

 

 

Lloyds TSB has already changed its overdraft fees

 

The Office of Fair Trading (OFT) could drop next year's High Court test case over bank overdraft charges, a senior official has said.

But the OFT added it would only do this if the banks put forward an agreeable compromise and if such a deal was in the best interests of customers.

The court is due to decide next year whether the OFT has the power to rule that bank overdraft fees are unfair.

The eight banks challenging the OFT say it has no jurisdiction in the matter.

On Monday, Lloyds TSB became the first of the big High Street banks to cut some of its overdraft fees, after paying out millions of pounds in so-called "goodwill payments" to tens of thousands of unhappy customers.

Lloyds customers - and those of other banks - have claimed that charges levied for running up unauthorised overdrafts are illegal and unfairly high.

Negotiation

Other banks are expected to copy Lloyds example in coming months.

We will be looking out for what is the best outcome for the consumer

 

 

Cavendish Elithorne, OFT

 

 

Any such changes will not, on their own, deflect the OFT from its legal action.

But a senior official, Cavendish Elithorne, made it clear that the OFT was open to negotiation on the issue.

"If we do our own financial analysis, and they [the banks] come in with a number that is lower than our analysis would suggest is an unfair charge, there is no need for the court case to go forward," he said.

"We will be looking out for what is the best outcome for the consumer."

But Mr Elithorne did stress that so far there has been no face-to-face negotiation with the banks.

Authority

However, if and when, the judge will not be asked to rule on whether bank charges are legal or fair.

Lee Coward is one of the thousands of customers to sue their banks

 

 

Instead the judge will have to decide whether the OFT has the authority to decide the issue itself, under the Unfair Terms in Consumer Contract Regulations.

The OFT believes typical bank overdraft fees come under these regulations, that they are unfair and that it therefore has the power to order changes.

But banks argue that the charges are a core feature of their current account business and so they are not covered by the regulations, they are fair and that the OFT has no powers in the matter.

Agreement

Intriguingly, the OFT revealed that it actually agrees with part of the banks' arguments.

We think the fairness test will still apply

 

 

Cavendish Elithorne, OFT

 

 

They claim that their charges are not penalties, but are fees for a service - for running a current account while it is in the red.

"In most instances we would probably agree with the banks' arguments that these are not penalties as defined in common law," said Mr Elithorne.

But he insisted that the OFT Still believes the charges are unfair - even if they are "fees for a service".

"We think the fairness test will still apply," he added.

All these legal arguments will be novel in the UK courts and are clearly of great importance to both sides.

However a final decision may be more than a year away if the case goes to the Appeal Court and then the House of Lords.

No more free banking?

With the OFT two-thirds of the way through a nine-month investigation into the fairness of overdraft charges, banks are now giving the watchdog their own estimates of how much it costs to run an account in the red and to bounce cheques.

It may be that some banks may charge some customers an annual fee

 

 

Cavendish Elithorne

 

 

The regulator is about to do its own number crunching to establish what level of charges it believes are unfair.

However, it estimates that fees and charges for going overdrawn without permission bring in between £2bn and £3.5bn a year to the UK banking industry's revenue.

The OFT has denied that the case could lead to the reintroduction of monthly or annual account charges; the end of so-called "free banking" for those whose accounts stay in credit.

"It may be that some banks may charge some customers an annual fee," said Mr Elithorne. But he pointed out that in contrast to the fees earned from charging for overdrafts, a standard charge of £300 a year, applied to the country's 75 million current accounts, would generate an extra £20bn or so in income for the banks. "I believe that if the banks tried to extend such charges much more broadly that some other banks would continue to compete quite vigorously to keep free banking," said Mr Elithorne.

[noomill060]

"Agreement

Intriguingly, the OFT revealed that it actually agrees with part of the banks' arguments.

We think the fairness test will still apply

 

 

Cavendish Elithorne, OFT

 

 

They claim that their charges are not penalties, but are fees for a service - for running a current account while it is in the red.

"In most instances we would probably agree with the banks' arguments that these are not penalties as defined in common law," said Mr Elithorne."

 

 

Funny that- bank's T&Cs describe them as penalties!

[un1boy]

"Agreement

Intriguingly, the OFT revealed that it actually agrees with part of the banks' arguments.

We think the fairness test will still apply

 

 

Cavendish Elithorne, OFT

 

 

They claim that their charges are not penalties, but are fees for a service - for running a current account while it is in the red.

"In most instances we would probably agree with the banks' arguments that these are not penalties as defined in common law," said Mr Elithorne."

 

 

Funny that- bank's T&Cs describe them as penalties!

 

lol, tell me about it!!

 

A wee bit of Fraud there?

[elsinore]

“ “ link to full page

 

 

The Institute of Economic Affairs’ 6th Annual Conference

BUSINESS BANKING AND FINANCIAL SERVICES

Service, Customers, Growth: fresh thinking for the business banking sector

 

Conference Programme

Monday 19th November 2007

 

10.40 An Interview with the OFT

Cavendish Elithorn, Senior Director, Service Sectors, Office of Fair Trading

Interviewed by

Angela Knight, Chief Executive, British Bankers Association:o

 

11.10 Questions

 

Anyone?

 

Els

[Deso]

“ “ link to full page

 

 

The Institute of Economic Affairs’ 6th Annual Conference

BUSINESS BANKING AND FINANCIAL SERVICES

Service, Customers, Growth: fresh thinking for the business banking sector

 

Conference Programme

Monday 19th November 2007

 

10.40 An Interview with the OFT

Cavendish Elithorn, Senior Director, Service Sectors, Office of Fair Trading

Interviewed by

Angela Knight, Chief Executive, British Bankers Association:o

 

11.10 Questions

 

Anyone?

 

Els

 

Yeah, what the hell is going on?? What happened to the "Fair" trading bit in OFT? This is another "condition of society" we need exposed. Lets get panorama onto this one, I reckon they could get a whole series on the exploits of the British Banking Association, FSA , FOS and the Banks all against the consumer. No wonder the emigration rate in this country is so high.

[patrickq1]

i think its getting close to time our complaint was made to the EU COMMISIONERS regarding the whole infestation of sleeze and unlawful practices against the consumers of the UK

[adamc6671]

Hi All

 

Quote from un1boy's post above -

 

" . . . . Any such changes will not, on their own, deflect the OFT from its legal action.

But a senior official, Cavendish Elithorne, made it clear that the OFT was open to negotiation on the issue.

"If we do our own financial analysis, and they [the banks] come in with a number that is lower than our analysis would suggest is an unfair charge, there is no need for the court case to go forward," he said.

"We will be looking out for what is the best outcome for the consumer."

But Mr Elithorne did stress that so far there has been no face-to-face negotiation with the banks. . . ."

 

I, for one, would be quite happy with a compromise solution, as this would presumably save a great deal of time compared with the Court process, but there would, IMO, have to be many conditions attached for it to be fair to all -

 

a) The 'fair' level of charge would have to be set at no more than the £3 already accepted in Ireland.

 

b) The banks would have to accept the need to repay, WITHOUT Court action and in direct response to a properly structured request, the 'unfair' element of previously levied charges (but see d) below).

 

c) There should be NO 6 year limit on the time span over which one can reclaim - if a charge was too high up to 6 years ago, it was equally too high more than 6 years ago!

 

d) As part of the repayment process, the banks should accept the need to repay the FULL AMMOUNT of charges levied (and interest charged) calculated from the point in time where, had it not been for the previously levied unfair element of charges applied, the account would not have been in overdraft and would not, therefore, have incurred any charges (or interest) at all.

 

 

All of that is my opinion only, of course, and there is very likely to be other conditions that would be equally relevant. I would be very interested to see what others think!

 

All the best - Adam.

[un1boy]

I think ur right Adam - the thing is, no one is saying that bank's should be able to charge - everyone is realistic and in the light of the highly automated industry, we all feel that if they charges something like £3 that would be ok - even if it costs them nothing.....

 

I made a bak account program and let me tell u everything is done automatically - it looks at the account balance, if it is below it adds the charge (which i can set to £1 or 1 million). It then checks it whenever I want it to, or the next day and applied the charge again!

[andrew1]

I got a £7.50 charge for a late payment of a BT phone bill - that's no different!

[un1boy]

I got a £7.50 charge for a late payment of a BT phone bill - that's no different!

 

I agree. I also think that them charging people who don't pay by DD is the same too.....I think it's time these companies were sorted out!

 

It's scandalous. The cost of providing the service should be borne by the company - their prices should cover their costs.

 

So, are we going to get invoices soon from shops to pay part of their electricity bills, staff wages and shipping costs?