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Re: **** Important New European Court Judgement - June 2010
Speak of the devil...
They don't hold industry-wide figures since 2006 but do hold them for Clydesdale, HSBC & Lloyds - for 07 & 08 but won't give them even in aggregated form citing commercial confidentiality exemptions.
What I suppose we really need to know is whether the overall revenue for these 3 banks has increased or reduced in the 2 years since 2006.
Hi Haris
I'd like to request information under the Freedom of Information Act.
According to the OFT's original PCA Market Study of July 2008, banks generated revenues of £2.6b from fees associated with insufficient funds and unarranged overdraft maintenance charges. The £2.6b was the headline figure used in the study and press release in order to encapsulate the overall level of consumer detriment caused and appeared instrumental in forming the view that the PCA market was ''not working well for consumers''.
In the March 2010 Update to progress made in the PCA market the OFT chose not publish a corresponding updated figure and instead used comparisons between the average published charges for paid and unpaid transactions between 2007 and presumably 2010 which does not appear to include associated maintenance charges and gives no indication as to overall consumer detriment. Perplexingly these were the headline figures promoted by the OFT to justify the claim that ''significant improvements'' had been made even though the corresponding figures for 2006 were apparently deemed not important enough to even feature in the press release for the original study findings in 2008.
1) What are the updated figures for revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006?
2) If the OFT does not hold this information, then why not?
Kind regards
EXC
Dear EXC
Freedom of Information Act 2000
Thank you for your email of 6 August 2010.
In your email you have asked the OFT to provide 'updated figures for revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006'. If the OFT does not hold this information, you have asked why this is the case.
Duty to confirm whether or not information requested is held
Under the Freedom of Information Act 2000 ("FOIA") we have a duty to confirm whether or not information requested is held and to supply that information unless there are good reasons for not doing so.
I can confirm that the OFT does not hold data on industry-wide revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006 which are comparable to the £2.6 billion figure quoted in the 2008 Personal Current Account (PCA) market study.
The OFT does hold data from three PCA providers on their individual revenues generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for their financial reporting years 2007 and 2008.
Our response
As part of the OFT's investigation into the fairness of certain unarranged overdraft charging terms under the Unfair Terms in Consumer Contracts Regulations (UTCCRs), data was collected from the three banks (Lloyds, Clydesdale and HSBC) on insufficient funds and unarranged overdraft maintenance charges for the financial reporting years 2007 and 2008. It is not possible to calculate an aggregated industry-wide figure from this data.
The above data was collected under section 224 of the Enterprise Act 2002 (EA02). The information received came to us in connection with the exercise of our functions under Part 8 of the EA02. Accordingly, it is 'specified information' within the meaning of section 238 of the EA02. Section 237 EA02 contains a general prohibition on the disclosure ‘specified information’ relating to the affairs of an individual or any business of an undertaking.
Accordingly we consider that the information obtained from the three banks as described above is ‘specified information’. Furthermore it is exempt from disclosure under section 44 FoIA.
Section 44 FoIA
Section 44(1)(a) exempts information from disclosure if its disclosure (otherwise than under FoIA) by the public authority holding it is prohibited by or under any enactment. In this case the enactment in question is Part 9 EA02. Section 44 is an absolute exemption, so there is no requirement on us to have to assess whether the public interest favours disclosure.
Below is a link to the Information Commissioner’s website and I refer you to guidance 'The Enterprise Act and the Freedom of Information Act 2000' which explains the interaction between FoIA and the EA02. The guidance can be found in the section headed 'Detailed specialist guides':
1 In the case of Clydesdale the financial reporting year runs from September to August. For HSBC and Lloyds it runs from January to December.
Freedom of Information Act documentation - ICO
With respect to our March 2010 update report on unarranged overdrafts, the purpose of this document was to report back on the outcome of discussions with the major personal current account (PCA) providers to address the OFT's outstanding concerns around control, clarity and predictability and responsibility with respect to unarranged overdrafts. Given this purpose, the OFT did not believe it was necessary to seek data to allow it to calculate an updated industry-wide revenue figure for insufficient funds and unarranged overdraft maintenance charges.
Duty to provide advice and assistance
Section 16 of the FOIA provides a duty when responding to requests to provide advice and assistance.
The OFT continues to actively monitor the PCA market to ensure that there is movement towards an equilibrium that works well for consumers. As part of its ongoing monitoring activities, the OFT will in September 2010 provide a short update on progress in the PCA market. In particular, the OFT will be collecting information from the industry on:
the options available for customers that do not want access to unarranged overdraft facilities
the level of charges for UOCs, especially for unpaid items,
the choice of charging structures (or models) of PCAs available to customers across the market, and
the treatment of customers in (or at significant risk of being in) financial difficulty as a result of unarranged overdraft charges (or their equivalents).
In addition, we expect to review adherence to earlier commitments made by the PCA providers around transparency and switching as set out in the October 2009 follow up report. It will also review adherence to the commitment made by the major PCA providers to have published existing responsibility policies online by September 2010 and set out further progress we expect to see in the PCA market.
Yours sincerely,
Haris Irshad
Markets and Projects
Office of Fair Trading
Originally posted by Amethyst
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They don't hold industry-wide figures since 2006 but do hold them for Clydesdale, HSBC & Lloyds - for 07 & 08 but won't give them even in aggregated form citing commercial confidentiality exemptions.
What I suppose we really need to know is whether the overall revenue for these 3 banks has increased or reduced in the 2 years since 2006.
Hi Haris
I'd like to request information under the Freedom of Information Act.
According to the OFT's original PCA Market Study of July 2008, banks generated revenues of £2.6b from fees associated with insufficient funds and unarranged overdraft maintenance charges. The £2.6b was the headline figure used in the study and press release in order to encapsulate the overall level of consumer detriment caused and appeared instrumental in forming the view that the PCA market was ''not working well for consumers''.
In the March 2010 Update to progress made in the PCA market the OFT chose not publish a corresponding updated figure and instead used comparisons between the average published charges for paid and unpaid transactions between 2007 and presumably 2010 which does not appear to include associated maintenance charges and gives no indication as to overall consumer detriment. Perplexingly these were the headline figures promoted by the OFT to justify the claim that ''significant improvements'' had been made even though the corresponding figures for 2006 were apparently deemed not important enough to even feature in the press release for the original study findings in 2008.
1) What are the updated figures for revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006?
2) If the OFT does not hold this information, then why not?
Kind regards
EXC
Dear EXC
Freedom of Information Act 2000
Thank you for your email of 6 August 2010.
In your email you have asked the OFT to provide 'updated figures for revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006'. If the OFT does not hold this information, you have asked why this is the case.
Duty to confirm whether or not information requested is held
Under the Freedom of Information Act 2000 ("FOIA") we have a duty to confirm whether or not information requested is held and to supply that information unless there are good reasons for not doing so.
I can confirm that the OFT does not hold data on industry-wide revenue generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for the years since 2006 which are comparable to the £2.6 billion figure quoted in the 2008 Personal Current Account (PCA) market study.
The OFT does hold data from three PCA providers on their individual revenues generated by fees associated with insufficient funds and unarranged overdraft maintenance charges for their financial reporting years 2007 and 2008.
Our response
As part of the OFT's investigation into the fairness of certain unarranged overdraft charging terms under the Unfair Terms in Consumer Contracts Regulations (UTCCRs), data was collected from the three banks (Lloyds, Clydesdale and HSBC) on insufficient funds and unarranged overdraft maintenance charges for the financial reporting years 2007 and 2008. It is not possible to calculate an aggregated industry-wide figure from this data.
The above data was collected under section 224 of the Enterprise Act 2002 (EA02). The information received came to us in connection with the exercise of our functions under Part 8 of the EA02. Accordingly, it is 'specified information' within the meaning of section 238 of the EA02. Section 237 EA02 contains a general prohibition on the disclosure ‘specified information’ relating to the affairs of an individual or any business of an undertaking.
Accordingly we consider that the information obtained from the three banks as described above is ‘specified information’. Furthermore it is exempt from disclosure under section 44 FoIA.
Section 44 FoIA
Section 44(1)(a) exempts information from disclosure if its disclosure (otherwise than under FoIA) by the public authority holding it is prohibited by or under any enactment. In this case the enactment in question is Part 9 EA02. Section 44 is an absolute exemption, so there is no requirement on us to have to assess whether the public interest favours disclosure.
Below is a link to the Information Commissioner’s website and I refer you to guidance 'The Enterprise Act and the Freedom of Information Act 2000' which explains the interaction between FoIA and the EA02. The guidance can be found in the section headed 'Detailed specialist guides':
1 In the case of Clydesdale the financial reporting year runs from September to August. For HSBC and Lloyds it runs from January to December.
Freedom of Information Act documentation - ICO
With respect to our March 2010 update report on unarranged overdrafts, the purpose of this document was to report back on the outcome of discussions with the major personal current account (PCA) providers to address the OFT's outstanding concerns around control, clarity and predictability and responsibility with respect to unarranged overdrafts. Given this purpose, the OFT did not believe it was necessary to seek data to allow it to calculate an updated industry-wide revenue figure for insufficient funds and unarranged overdraft maintenance charges.
Duty to provide advice and assistance
Section 16 of the FOIA provides a duty when responding to requests to provide advice and assistance.
The OFT continues to actively monitor the PCA market to ensure that there is movement towards an equilibrium that works well for consumers. As part of its ongoing monitoring activities, the OFT will in September 2010 provide a short update on progress in the PCA market. In particular, the OFT will be collecting information from the industry on:
the options available for customers that do not want access to unarranged overdraft facilities
the level of charges for UOCs, especially for unpaid items,
the choice of charging structures (or models) of PCAs available to customers across the market, and
the treatment of customers in (or at significant risk of being in) financial difficulty as a result of unarranged overdraft charges (or their equivalents).
In addition, we expect to review adherence to earlier commitments made by the PCA providers around transparency and switching as set out in the October 2009 follow up report. It will also review adherence to the commitment made by the major PCA providers to have published existing responsibility policies online by September 2010 and set out further progress we expect to see in the PCA market.
Yours sincerely,
Haris Irshad
Markets and Projects
Office of Fair Trading
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