Banks Suspend Bank Charges

[summer24]

I was reading on the Financial Ombudsmen website yesterday and it stated that at the moment there is a test case undergoing regarding reclaiming bank charges and banks are suspending claims for bank charges until this ruleing has been complete, estimated time end of this year begining of next year.

 

If the ruling is in favour of the bank, anybody trying to reclaims these charges will not succeed?

 

Can anyone let me know if this is the case?

 

Thanks

[summer24]

this is the link to the website

 

 

 

http://www.financial-ombudsman.org.uk/faq/bankcharges-testcase-quickguide.pdf

[The Phantom]

Check out zootscoots useful post

http://www.consumeractiongroup.co.uk/forum/yorkshire-bank-clydesdale-bank/107588-oft-test-case-what.html

 

We will have to await the outcome, but who says the banks would win ? What if they loose ?

[Monty2007]

I have an Alliance & Leicester account and recently went o/d through funds not clearing before a cheque I wrote. Instead of the usually £34 charge followed by a further £25 charge for being o/d they "waived the fees". Not sure if they may slap them back on later though? after all they previously seemed to be able to impose multiple penalties at will. One month I was charged £59 for going overdrawn by 13 pence!

[Monty2007]

For what its worth, THE BANKS WILL WIN!

 

I hope they don't but let's face facts, they pay millions in taxes and fees to the UK Government. The potential impact of £ Billions being repaid over the last 6 years would wipe x10 that off share prices of banks and financial institutions, it ain't going to happen.

 

They will agree a fee (£5 - 12) for each "transaction" (i.e. going o/d etc) and it will end up in the same position as we have with the credit card charges.

 

That's my opinion for what its worth.............

[summer24]

I think you could be right there monty....lets hope not tho!!

[The Phantom]

I wouldn't think so, that their status should have an impact on a verdict.

What could happen though is that even if they loose, retrospective claims could be limited by the court, i.e. they don't have to pay everything back retrospectively to limit the impact, but can't charge in future.

What about that scenario ?

[Monty2007]

There will be many, many hours of seculation........ The banks have done their maths, they will come out with either a full victory or a compromise. My money is on the latter. They have obviously spent a lot of money on top legal opinion and it would not surprise me if this has gone to the top of government. When did the banks ever lose?!

[summer24]

My understanding of these unfair charges, was that if the banks lost in court then they would have to repay everybody that they have taken these charges off? If this is the case this is gonna be a 'lot' of money, there going to defend there case to the hilt. Like monty mentioned they may opt to have a lower penalty charge of £12, I do still think that banks will continue to charge even a low amount, just look how much they make off people that wont claim these back!

 

Im in the process on reclaiming my charges bank from the natwest so I hope this test thing aint gonna take too long! ha

[The Phantom]

Well, it would be interesting to see the reasoning of the court / judge then.

The law we quote / rely on in our claims is quite clear, so any victory for the banks would be most interesting.

It would in that case be prudent to leave the country, as the implications of what you are suggesting are most troubling.

Either law applies or it doesn't. It can't apply for just some and not others.

But then again I am not English and not used to these things. Where I come from there are no such things are bank penalty charges, you just pay different amounts for the type of current account that suits your needs.

[fergal71]

if they are able to stop all current cases until end of test case, why do they not stop there charges until the end of the test case?????????????????????????????????????????????????????

[vinegarvera]

Thats exactly what I was saying yesterday, but this does not seem to have been considered. Or maybe I am wrong??

Surely if the case is on hold as to if the charges are unfair, then the charges should be suspended to await the outcome also??

[The Phantom]

Rule No 1: Common sense does not apply.

[gerryb2]

Unfortunately, I have to agree with Monty2007. The government would be looking at losing a lot of Corporation Tax if the banks lost this case. you can bet your bottom dollar that whatever judge is appointed, someone will be having a word in his shell-like at his club. And even if they can't find the right words to clear the banks this time, it will go to appeal - another year later.

 

Cynical - moi?

[The Phantom]

Rather than bribing a judge, they could just change the law to suit if they wanted.

At least that would be legal.

To be honest I don't think the result will be a clear you loose - you win scenario. The test case imho was a gentlemen's agreement between the relevant bodies OFT,FSA, FSO etc to cut their workload and clear this issue once and for all.

I bet there will be a further gentlemen's agreement upon judgement, if the bank's can't win on legal terms (because the law is quite clear) there will be a limitations clause to prevent backdated claims and from that point banks will drop penalty charges but will start to charge for current accounts and services associated with them individually (cheques, maybe direct debits, standing orders and what have you), so they have lost but can't loose financially. I could see all that already being agreed between these bodies without actually having to bribe any judges, which is an idea I strongly object to as this would indicate or suggest Italian Mafia like conditions, and I sincerely hope this would not be the case in the UK.:-?

[credit allergy]

I am paying DCAs repayments on hire purchase I have already informed them that I am disputing charges. In a short time I will have repaid orginal loan just leaving their late payment charges etc. To be fair under this suspension surely they cant take court action against me until it is resolved. The OFT guidelines state that if an account is in dispute no collection activity should take place. What will happen when I stop paying all my creditors until the test case is resolved because I am disputing the amount owed! CREDIT ALLERGY

[suzieblooz]

if they are able to stop all current cases until end of test case, why do they not stop there charges until the end of the test case?????????????????????????????????????????????????????

 

EXACTLY - thats what I can't understand, surely if they can stop our cases because they don't know the legal position then that should apply to the charges too. The banks will win this one, why else would they let a test case go ahead?

[noomill060]

Just let them try and take you to court!

 

You have a absolute defence-

 

the "debt consists of unlawful debits and is thus unenforceable, in fact, they owe YOU, because you have been decieved into paying interest on these unlawful debits.

[patrickq1]

i think this will be a case that will go to the law lords in no way would the public accept a climb down or a settlement below 3/4 pounds and it would also leave the door open for further cases to be tried in court

[Conniff]

Going down another route, if the banks loose and they introduce account charges will employers still be able to insist on wages payments into bank accounts?

If this is the case then I am being forced to pay the bank money for nothing. Surely I am entitled to my full wages and they will have to come up with another way to pay people their wages.

[noomill060]

Precisely- this has implications that go further than most people think.

[fergal71]

what is the answer to all this?????? there is a great deal of speculation flying around and nobody can be sure what the outcome will be, one thing I do now is that if we do not get a favourable response then we should take to the streets in our millions and force this god forsaken country to listen, how long is it going to be before we end up with a civil war on our hands.... we can not continue in this opressed regime... this country is being run by large institutions.... it is all about money... I have read recently that illegal immigrants leave the country get a £3500 windfall to set up a business back home.... they use the money to return and then ask for another £3500.... I know families who have lived here all their lives that only get that to live on for one whole year.... I have also heard how true I dont know that migrant workers claim child tax credits over here for children they dont have back home... and because our system is so old and there is no investigations possible they get away with it...... why do I feel a victim ????? I have worked all my adult life as have many people I know and unless you are one of the very few on decent wages your standard of living is ridiculously low.....

 

any ideas would be greatly appreciated..............

[bally35]

It should follow that if they cannot deal with bank charges complaints , because they are not sure about the true legal nature of them, then they can surely not apply these charges (since oh they are not sure of the true legal nature of theM?)

[DAG]

I don't see why they should suspend all cases. Surely we as individuals should still have the right to take the banks to court when we want to and not have to wait for any other judgement. Also there is talk that the banks will propably make charges for running accounts if they cannot charge their penalty charges. If they do this then they are admitting these charges are a way of making money otherwise they wouldn't be looking at otherways of making money if they cannot impose these charges on us anymore!

 

I won against Natwest after one letter and they repaid me the full amount of 2,682.50. I am now going for Barclays for my partner's and our joint account. Was just about to start the ball rolling is it worth starting or waiting for the outcome of this test case?

 

Dag

[The Phantom]

If you read zootscoots sticky it is advisable to continue with your claim as normal, but the case may be stayed by your court pending the outcome of the test case.

I think the test case had to happen at some point just to clarify the legalities and take the enormous pressure off the small claims courts and other bodies.

The CAG was looking for donations to fund a test case themselves anyway

http://www.consumeractiongroup.co.uk/forum/announcement.php?f=89&a=102

(check note under Bankfodders avatar)

So I am confident there is a good chance the banks would/will loose on the legal issue, BUT I also believe there will be a limitation clause regarding backdated claims AND bank's will no doubt start to charge for current accounts and associated services if they cannot levy penalty charges anymore.