FSA Back-track on reason for waiver

[crfx250]

Thanks for your tenacity in obtaining this from them, crfx250 - it could prove very useful

 

 

Thanks but I can't really take any credit for that as it was only the same

thing they sent Kog and loads of others probably.

 

But you can rest assured that now I've got the bit firmly between my teeth I shall hound them hourly until they either relent or whither and die.

 

My abiding principle being 'If you have to kick a window in, then use both

feet'.

[crfx250]

I've managed to get someone slightly higher in the FSA's food chain to

deal with my inquiry as to why the waiver was introduced.

 

They have promised an ''in depth and comprehensive'' response. But going

by their performance up till now, I'm not holding my breath.

[jules1973]

Well done on your achievements so far, I am still waiting on them to acknowledge the complaint I sent.

[crfx250]

A very interesting snippet in this channel 4 news item:

 

 

''It follows a decision last month by the Financial Services Authority to issue a waiver to banks in relation to the handling of unauthorised overdraft complaints until a landmark ruling is given in the courts. A stay on all pending claims was also requested by the banking community ahead of the test case...''

 

This strongly implies - what even the least cynical amongst us believe - that the banks were responsible for pushing through the waiver.

 

I'll ask the FSA to confirm this if they don't manage to find the space

to include it in their response.

 

 

 

Channel 4 - News - Overdraft petition support growing

[muggyno1]

4. The Authority may not give a direction unless it is satisfied that—

(a) compliance by the authorised person with the rules, or with the rules as unmodified, would be unduly burdensome or would not achieve the purpose for which the rules were made; and

(b) the direction would not result in undue risk to persons whose interests the rules are intended to protect.

 

The Financial Services and Markets Act 2000 (strikeout as modified by The Regulatory Reform Order 2007)

 

Firstly I would like to set out some background to our decision to waive temporarily our rules requiring firms to handle customer complaints within particular deadlines. The Financial Services Authority (FSA) made this decision in the best interests of all consumers so that all consumer complaints about such charges could be dealt with in a fair and consistent way going forward.

 

In these circumstances the Office of Fair Trading and some firms have decided to initiate a test case in the High Court to resolve legal uncertainties on the level, fairness and lawfulness of these charges. In order to facilitate this process the FSA has issued a waiver of its complaints-handling rules as they apply to complaints about unauthorised overdraft charges.

 

I have also asked for information and clarification from the FSA, the headlines of which are:

 

• What interests of the consumer are served by the waiver both while it is in place and in the future
  
• How does the waiver ensure that complaints can be dealt with in a fair and consistent way going forward
  
• How does the waiver facilitate the test case

And, in the light of the quote from the FSMA 2000 above:

• How does the issue of the waiver comply with section 158 paragraph 4 of the FMSA.
  
• How do the stated reasons as published comply with this and the following

Unless it is satisfied that it is inappropriate or unnecessary to do so, a direction must be published by the Authority in such a way as it thinks most suitable for bringing the direction to the attention of—

(a) those likely to be affected by it; and

[duncan_disorderly]

I have also asked for information and clarification from the FSA, the headlines of which are:

• What interests of the consumer are served by the waiver both while it is in place and in the future
  
• How does the waiver ensure that complaints can be dealt with in a fair and consistent way going forward
  
• How does the waiver facilitate the test case

And, in the light of the quote from the FSMA 2000 above:

• How does the issue of the waiver comply with section 158 paragraph 4 of the FMSA.
  
• How do the stated reasons as published comply with this and the following

 

 

Without wanting to sound cynical I would assume that the answers to the above questions have already been well thought out and will take the form of:

 

The situation as existed was not in the interests of the consumer as complaints were not being dealt with in a fair or consistent way. We believe that clarity of the legal issues in question will allow banks to deal with all customer complaints in a consistent way.

 

The waiver will ensure that complaints can be dealt with in a fair and consistent way going forward and the FSA have insisted that the banks apply the findings of the legal process to all complaints quickly and expeditiously once legal proceedings have been finalised.

 

Currently the banks were dealing with thousands of complaints and court cases against them. The waiver will allow the banks to concentrate on the important legal issues in hand and allow a speedy conclusion to the important test case, and therefore a speedier resolution to customer complaints, benefiting all consumers.

 

We do not believe the direction will result in undue risk to persons whose interests the rules are intended to protect. In fact we have included a proviso to review the waiver after 2 months to ensure consumer interests are prtoected.

 

We felt it was important to inform every consumer who this would affect. That is why we kindly drafted the letter on the banks' behalf so that they could copy and paste it on to their headed paper and send it to every existing and future complainant.;-)

However the important issues were that there was already an existing process in place to deal with bank complaints, and all the institutuions involved failed the consumer by allowing the banks to ride roughshod over laws, rules and existing regulations.

 

They did not provide the necessary data within the legal timescale of 40 days. The Information Commissioner allowed them to continue with this practice unabated.

 

The banks have had thousands of opportunities to legally defend bank charges in court. They refused to do so. They abused the legal system of this country and were allowed to do so.

 

They did not deal with complaints within the already FSA proscribed timescale of 8 weeks. The FSA allowed them to do so and took no action against the offenders.

 

They had thousands of opportunities to allow the FOS to investigate complaints against them regarding charges. They refused all such investigations by offering goodwill payments and the FOS allowed this practice to continue.

 

The OFT had already ruled that they believed credit card charges to be financial penalties, and that the same should apply to similar financial accounts including retail current accounts. They imposed a charge limit, which if breached would open the organisation to be dragged through the courts by the OFT. This same organisation has allowed the banks to back them into a corner and have allowed them to extract the already fragile dentures they had.

 

The FSA have now tinkered with the regulations without enforcing the regulations that were already in place. The courts have allowed the banks to continually abuse and frustrate the due legal process. They were afraid to take a stand and wil now capitulate to banks requests for stays. The FOS should have stepped in a long time ago and forced an investigation. The OFT were originally due to report on bank charges in April 2007. They allowed the banks to bully and harangue them into submission.

 

The head of the BBA has stated that it is difficult for banks to deal with such a varied raft of regulatory bodies. This is the one area in which I agree with her. Our banks need to be regulated much more tightly by government. There needs to be one powerful organisation in charge of the UK financial services industry who WILL take action to protect consumers. At present the FSA have failed in this, the OFT have failed in this, the FOS have failed in this, and sad to say - the entire legal system has also failed in this.

[muggyno1]

Duncan,

 

I would expect answers very similar to the ones that you have suggested. They are not, however, answers to the questions posed and the FSA will not be allowed off the hook quite as easily as that by me or many of the other people posing similar questions.

 

This is all about attririon and building pressure.

[crfx250]

As Wild Billy once put it to me - It's not about the answers you get but

the questions you ask.

 

I think it's also worth looking at this a bit more closely. It was published

on the same day - but at a later time- as the test case and waiver were announced. Talk about bolting the stable door...

 

 

http://www.fsa.gov.uk/pubs/ceo/complaints.pdf

[duncan_disorderly]

Duncan,

 

I would expect answers very similar to the ones that you have suggested. They are not, however, answers to the questions posed and the FSA will not be allowed off the hook quite as easily as that by me or many of the other people posing similar questions.

 

This is all about attririon and building pressure.

 

I agree with you. However I think that increasing pressure needs to be placed on changing the entire regulatory framework of the banking industry. This can only, and I hope will, be brought about through the political process, pressurising government and if necessary replacing the government at the next election. I wonder which party will start coat trailing this idea first?

 

Until this comes about we will continually be fed the verbal diahorrea template response answers.

[duncan_disorderly]

As Wild Billy once put it to me - It's not about the answers you get but

the questions you ask.

 

I think it's also worth looking at this a bit more closely. It was published

on the same day - but at a later time- as the test case and waiver were announced. Talk about bolting the stable door...

 

 

http://www.fsa.gov.uk/pubs/ceo/complaints.pdf

 

Exactly. This is the document to which I was relating. In other words the FSA knew the banks were openly flouting the existing regulations in place. What action did they take then? Zilch, except pointing out in a tame letter after the waiver had been granted, that they were aware of the flagrant abuses.

 

Whilst they regulatory bodies continue to allow organisations to 'do as they please' unfortunately it means an uphill struggle for the poor consumers.

[crfx250]

I wonder which party will start coat trailing this idea first?.

 

The Tories already have Credit Today online

[duncan_disorderly]

The Tories already have Credit Today online

 

Interesting report. Funny how Ms Knight seems to contradict her other expressed views on regulation. Her comments on the Banking Code Standards Board seems to reflect that she is confused on the matter:confused::

 

The Code sets out a series of undertakings for banks when they lend money to customers, plus more on what the banks will do to help individuals to overcome financial difficulties. These are tangible commitments by the banks, enforced by the Banking Code Standards Board with its range of punitive measures. It is unclear how imposing a further regulatory layer would help people who may be in need of urgent financial advice and assistance.

 

Can she explain how the Banking Code Board have helped customers who continually face unfair fees taken from benefits? How it has helped those customers who have had their credit history wrecked by defaults from the imposition of these charges? Exactly what punitive measures the Board have handed out in the past 2 years?

 

And her biggest faux pas about imposing a further regulatory layer! Ahemmm Angela, the idea is to scrap the existing layers and replace it with a single body with more authority to protect consumers. So don't worry your wee head about anothr layer, in fact we want all the existing blankets to be stripped off the bed and replaced with a single duvet...preferably one with a tog rating of about 150!

[crfx250]

That was funny

[crfx250]

I've just received this final response re the reasons for the waiver.

 

I am absolutely seething with anger.

 

After being assured by a head of department this morning that they are preparing an ''in-depth and comprehensive'' explanation as to the reasons for the introduction of the waiver they have now decided point blank not to answer the question at all.

 

I'll no doubt be on the phone to them on Monday morning and if they think I might have calmed down by then, they've got another think comming.

Dear xxxxxxxx

 

Thank you for your email and telephone call of 16 August 2007.

 

Your enquiry

 

I understand from your email that you are in possession of two responses from the Financial Services Authority (FSA) regarding the recent rule waiver granted to banks and building societies. These two responses are identical apart from the first paragraph, which explains why the FSA's Independent Complaints Scheme are unable to look at complaints regarding the rule waiver. Despite receiving information from my colleague about why the waiver is in place and looking at the response received by a friend you still wish to know why the rule waiver is in place. You would also like to know why you are unable to complain about the rule waiver.

 

Complaints about the FSA

 

The FSA is required to operate its Complaints Scheme as a requirement under the Financial Services and Markets Act 2000 (FSMA) for the investigation of complaints arising in connection with the FSA's exercise of, or failure to exercise, its functions under FSMA, other than its legislative functions. The rules are set out in COAF - FSA Handbook, which can be viewed on the website at: http://fsahandbook.info/FSA/html/handbook/COAF. For further information on what complaints fall outside the scope of the Complaints Scheme please see COAF 1.4.2 G by following this link http://fsahandbook.info/FSA/html/handbook/COAF/1/4.

 

The waiver

 

The FSA granted a rule waiver on complaints about banks and building societies to facilitate the test case in the High Court. I am aware that you have asked particular questions regarding the rule waiver in a 'Right to Know' request under the Freedom of Information Act. This request is currently being dealt with by our Information Access Team, who will respond to you separately.

 

I hope that this has clarified the FSA's position as I feel that there is nothing more that we can usefully add.

 

Yours sincerely

 

M Broadhurst (Miss)

Consumer Contact Centre

Financial Services Authority

Consumer Helpline: 0845 602 2185 (call rates may vary)

www.moneymadeclear.fsa.gov.uk

Get clear, impartial information from the UK's financial watchdog.

No selling. No jargon. Just the facts

[crfx250]

Just spent nearly an hour on the phone to the FSA's Drew Franks in an attempt to further my understanding of the real ressons to why the waiver was introduced.

 

Though I'm none the wiser for it, he did confirm some interesting points.

 

1) The waiver was definately requested by each of the banks involved in

the OFT test case. He also added that waivers cannot be granted by

FSA unless they are specificaly requested by a bank first. He confirmed

that the test case was initiated by the banks and not the OFT.

 

2) The waiver was in the consumer interest because if claimants did not

get a refund or only a partial refund, consumers would lose out if the test

case went in the consumers favour. This suggests to me that a positive outcome

of the case would not be retrospective.

 

3) He claimed that another reason for the waiver being in the consumer interest

was that the FOS have been ''unsuccessful in awarding most claims''. When I

pointed out that the FOS had themselves claimed a 100 percent record in obtaining

refunds, he then retracted the claim.

 

Needless to say he refused to put any of this in writing.

[itchyfrog]

 

2) The waiver was in the consumer interest because if claimants did not

 

So tantalising - what's the end of that sentence?

[crfx250]

Sorry, I've edited it now

[itchyfrog]

3) He stated that ''most claims made through the FOS were

unsuccessful''. When I pointed out that the FOS had a 100 percent

track record in awarding claims, he then retracted it.

 

This is absolutely outrageous, are you saying that he told you a blatant lie during your conversation? I think you're definitely on to something here that should really be pursued.

[crfx250]

I've spent many hours on the phone and e-mail to the FSA in the last week and the broken promises, dishonest claims and downright lies have been breath-taking.

[duncan_disorderly]

Unfortunately this confirms most of my worst fears. As I suspected, the whole circumstance has arisen at the behest of the banks and all arrangements around it have been made to suit them.

 

It also confirms what I said earlier, that there is no way anyone will get a straight answer from the FSA, or any of the regulators. After all, who are we except the consumer that these organisations are supposed to protect.

 

The closing of ranks between the banks and the so called regulators is outrageous and unfortunately it looks like the courts are joining the party as well in the vast majority of cases. I have just received a letter from Belfast county court to say that all bank charge claims are adjourned until mid February 2008 pending test case outcome. This was even without a request for a stay from the bank, or even an opportunity to question the decision!

 

The whole situation is now gong to need some huge political muscle to change.

[tifo]

It also confirms what I said earlier, that there is no way anyone will get a straight answer from the FSA, or any of the regulators. After all, who are we except the consumer that these organisations are supposed to protect.

 

Only political pressure will work ....

[MacBoy]

I think there is a need for both here. The political pressure raises public and poiticians' awareness of the issue. It's been noticeable from the MP campaign ja-de and I have been helping with, that most MPs at best have only a cursory knowledge of the issue (i.e. the 'palatable' version that's read about in the media).

 

MPs are now asking questions of the regulatory bodies and seeking further information from relevant ministers within their own world.

 

We also need the kind of specific pressure people such as crfx250 are putting the FSA under, with symbolic protests and FOIA requests, etc. This makes the regulators nervous and lets them know that they are not dealing with people who are going to kowtow and roll over.

 

Personally I think what we could do with right now, to supplement all this great effort from everyone, is some more media attention

[tifo]

just received the following reply from FSA re hardship and business claims.

 

HARDSHIP :

 

Please be aware that if you have already received a letter from the bank then your case will not have been assessed as a hardship case. if you dispute this or believe that the bank has wrongly assessed your case, then you should speak to your bank directly and ask them to reconsider the matter.

 

BUSINESS ACCOUNTS :

 

The waiver applies to all consumers that are eligible to ask the Financial Ombudsman Service (the Ombudsman) to look at a complaint for them. This includes:

 

* a private individual;

* a business, whose group annual turnover is less than £1 million;

*a charity, whose annual income is less than £1 million; and

*trustees of a trust, whose net asset value is less than £1 million;

 

Therefore if a business falls into the above categories, then any complaint it makes about bank charges may be affected by the waiver.

 

So, even though we may be on benefits and have mortgage arrears, the FSA trust the banks DID check first for hardship?

 

And despite UTCCR's NOT applying to business accounts it is now OK to use the waiver?

[patrickq1]

just pondering this thread has gone quiet ,

(A)has anyone ever cheked the consumer credit licence of the Banks

(B) is their a goverment code of conduct with the ters and conditions

©is it possible to prosecute the institutions ,for un lawfull charges on the basis of Transparancey of all charges based upon unlawfull processing of personal data

© the Un Fair Contracts ,that are Non Negotiable by the balance of power being in their favour this assertion is based on the Repugnant Rule

the implied object clause were we waiver our rights to their processing of such data in an unjust and anfair basis the unlawfull charges of default and the credit scoring against ones charachter and worthiness without proven and lawfull process of the law courts

 

the evilness of trading data which on some occasions can be both untruthfull and unlawfull and vexhatious causing terrible harm to ones charachter

and for good mesure have a charge leveled aginst the ICO and TS and FSA and can we ask for a judicial enquiry into the concerns of the goverment bodies who have consistentley failed in their capacity to manage

just me having a moan but some intresting points for all to discuss

patrickq1

hope you had a good haliday mugsy

[crfx250]

I made a formal complaint to the FSA about the handling of my enquiry into why the

waiver was introduced, This is their initial response and my reply.

 

 

 

Dear crfx

 

Your complaint against the FSA

 

Thank you for your complaints form submission of 20 August 2007 which we have entered into the FSA Complaints scheme.

 

Based on the information supplied in your complaints form, there are two allegations to your complaint which have been assessed as allegations of ''lack of care'' on the part of the FSA.

 

We have defined (below) our assessment of your complaint and how we intend to structure our investigation. If you feel that our assessment of your complaint is incorrect we would be grateful if you could inform us, in writing, by 11 September 2007.

 

As a separate issue to this complaint, we also note your e-mail of 24 August to Clive Briault. As we are dealing with this complaint, Mr Briault's office has asked us to acknowledge receipt of your 24 August e-mail. Please accept this letter as acknowledgement of that e-mail.

 

Our assessment of your complaint

 

Allegation one

 

You claim that your original enquiry to the Consumer Contact Centre (''CCC'') was not answered satisfactorily. As stated below (under ''Our Investigation'')' we will investigate whether the CCC's response to you, relating to this issue, were satisfactory.

 

However, we note that your original enquiry to the CCC related 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. Please note that such complaints would be excluded from our formal complaints scheme. This is because the legislation under which we operate does not require us to investigate complaints about how the FSA carries out it's function of granting waivers of rules to individual firms.

 

Allegation Two

 

You allege that the CCC has ''lied to me (you) during the course of my (your) enquiries''.

 

Our Investigation

 

Our investigation into your complaint will review all retrievable copies of correspondence between you and the CCC, regarding this matter. We will assess whether your allegations (above) are substantiated and there is evidence to demonstrate that the CCC has demonstrated a lack of care in it's dealings with you.

 

Please forward to us, by 11 September 2007, any evidence you feel substantiates the allegations.

 

 

**************

 

 

Thank you for your e-mail concerning my complaint.

 

In it you ask me to inform you if your assessment of my complaint is incorrect. It most certainly is.

 

You claim, in allegation one, that essentially because my original enquiry related to the FSA's decision, in principle, to grant the waiver, you are not required to investigate ''complaints'' about the way the FSA carries out it's functions.This is just nonsense.

 

My original enquiry was clearly and specifically to ask the FSA to provide me

with the reason as to why the waiver was introduced and was never a ''complaint''. My subsequent complaint makes it very clear that the allegations concern the dishonesty and unwillingness of the FSA to come clean on the reasons for the waiver's introduction.

 

This is not the first time the FSA has used this very tactic to redefine my (and others) enquiries as a complaint to enable it to exempt itself from providing the information sought. This is simply a smokescreen and a transparent attempt to avoid the issue. And I am astonished that this strain of viral deceit, endemic in the CCC, has infected the FSA's own complaints department.

 

You also refer to and acknowledge receipt of my e-mail to Clive Briault. Is it standard practice for the FSA's complaints department to acknowledge the receipt of correspondence to a managing director when the e-mail in question is entirely unrelated to any complaint and merely contains information? Is Mr Briaults office not capable of dealing with it's own correspondence without the assistance of another department?

 

Lastly you say that you will be reviewing ''all retrievable copies of correspondence'' with regard to my complaint.Can you confirm that this will include my telephone conversations with the CCC? I have been assured by the CCC that all incoming calls are indeed recorded.

 

Regards

 

crfx