OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[charitynjw]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Would the banks have influenced this:-(I realise it refers to credit cards, but same underlying principle, surely?)

cnjw :santa_smiley:

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Would the banks have influenced this:-(I realise it refers to credit cards, but same underlying principle, surely?)

cnjw :santa_smiley:

The banks themselves wouldn't have influenced it as there are all sorts of rules, regulations and protocols that prevent public bodies (or anyone) from disclosing commercially sensitive information - even if they wanted to. And if they did it would compromise the OFT's ability to obtain the information they need.

Whether we like it or not we live in a free market and breaching commercial confidentiality is a big no no.

We knew we'd never get the actual figures (and never asked for them) that made up the calculation but what we wanted the 'unpopulated model' used ie the categories of the different elements that the credit card providers put forward that make up what they claim the costs of administering defaults are. We didn't get it but as with other requests made under the Freedom of Information Act, you can sometimes get interesting information that you didn't actually ask for, as was the case here.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Ame, are your avatars becoming more saucey?

pmsl, same avatar, more fairy lights, oh and a bit more leg showing

Martin on Radio 2 did not say the POCs would be available from monday, he said 'under the cosh on bank charges, I'm announcing the new arguments on Monday I was in with my QC yesterday and talking to the OFT in the afternoon' ... that was it.(listened on listen again last night) I'd be extremely suprised if they publish new POCs on Monday.

The best idea on costs to the banks we have of comparative charges is the South African Competition Commission report - Legal Beagles -

Nevertheless, on savings accounts, FNB
reported a transaction cost of R1.80 per successful debit order, while Nedbank reported a
cost of R1.42 per successful debit order, compared with the cost of a rejected debit order of Confidential:
R4.18 and R4.88 respectively. These values bear no evident relationship to the fees charged
per debit order and rejected debit order on, for example, the FNB Smart and Nedbank
Transactor accounts.

The general charge to customer was R40.00 and the CC recommended that was reduced to R5.00.

I do know I keep going on about this report and there are differences in the way their banking works (they pay fees for many more types of transactions) but if you are looking solely at bounced or paid direct debits over limit then its worth reading.


also on credit card fees, Citicard successfully convinced a court that the cost plus reasonable profit was £8 by disclosing costs calculations but these were privileged to the judge so we have no idea how they were made up.

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

This is Stephen Hone's account of his meeting with the OFT as posted on Penalty Charges:

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

Well I was up at 4:40am and reached London at 10:15am, arriving at the OFT head office for 11:20. Upon my arrival I was met by David and Lisa who worked in the same department. David informed me he was in charge of the UTTCR investigation, and the market study.

The OFT asked me not to write up the questions they asked me, but they had no objections to me reporting on what I said. I agreed to this, therefore as a man of my word I will not write the question they asked but just the answer I gave.


Question 1 was-----------

I advised the OFT that the legal argument they had used seemed to be totally based on what the banks wanted. They replied, and although I understood what they were saying, I did not agree. However, since that is now history and I had little time with them, I moved quickly on.

I then advised the OFT on a number of different legal arguments that could be used to continue with the case. These ranged from using CCA, to even a possible argument under the Human Rights Act, in a limited number of claims (I must say they seemed to like this bit).

I then said yes, it is not under your remit to bring Human Rights claims, but this is why I suggest that consumers are added to any claim brought by the OFT, so that any QC instructed has the ability to bring in all the legal arguments - those within the OFT’s remit and those for the consumers that he would also be representing (again the OFT appeared to like this).

I also said that there are still at least two ways that claims can be brought under Regulation 6 of the UTTCR. Well the look on their faces said it all - it was clear that no other consumer group had raised these arguments and they had been totally overlooked. It was clear to me that I needed to spend time on this, so I spent a good 25 mins going through this in detail with them. Without saying what the OFT said, I will just comment that is was 25mins well spent.

On Regulation 5, I said that their concerns were wrong and that their views on why this had limited application were incorrect: there are a variety of arguments that could be used without having to rely on 6(2)b again. I got the feeling that my arguments had touched on new ground with them.

We went though a number of different scenarios (with them playing devil’s advocate) and I found all of these easy to counter, so a QC should find any counter argument very easy to overcome, providing he can think at the level of people who are on very limited income. Again, I highlighted why it was essential to included consumers.

I then went on to say that the OFT should look at the sworn statement of many defences during the Test Case, as banks had sworn under a Statement of Truth (well the solicitors on their behalf had) that the cost of these charges were a true reflection of the costs involved, when quite clearly from the evidence presented at the Supreme Court, this was not the case. These actions could be looked at as perjury.

Without saying what the OFT said, they smiled.


Question 2
I said to them that if they didn’t bring further action, there will be a public outcry and that it is important that consumers know what the OFT’s position is sooner rather than later.

I then said that if money is the only real concern to the OFT then that should not prevent them: we would lobby the Treasury/Government to make sure that the OFT were given the funds they need to fight the banks, without the OFT having to risk not having the funds to do other important investigations and enforcement work.

I also said that the OFT needs to consider the public opinion if they failed to recommence litigation, leaving the public to bring proceedings on their own initiative. If this happened, then the damage to the OFT’s credibility would be profound.


There were a number of other minor issues covered, but I think the essential elements have been covered above.

Personally, I got the feeling that the OFT were very worried about the cost of continuing and made comments that even if it cost the OFT £20 million it would be worth it, because if the OFT won, then the banks would pay their costs and the consumers would see the return of the billions taken from them in unlawful charges. If the OFT did not win, well at least there would be clarity, and we then could just concentrate on getting the Law amended.

One thing that was clear: the OFT will continue to fight in one way or another. This brought a good conclusion to leave the meeting with.

[Kafka]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

also on credit card fees, Citicard successfully convinced a court that the cost plus reasonable profit was £8 by disclosing costs calculations but these were privileged to the judge so we have no idea how they were made up.

I am in court with Citi tomorrow, after I refused their desperate attempts to settle out of court at 1k less than the claim.

They are now defending on the basis that their currect actual costs per default item come to just over the £12. They have also indicated that prior to the 2006 OFT report they used a different costing model that came to over £27 per item, when they actually charged £25.

All of this comes from a witness statement - there is no shred of evidence to support it, only an embarrassingly-simple formula that adds up all the costs for default collection and divides the unspecified amount by the number of defaulted instances. It has the cachet of an inspired vision that came to a Citi executive in the pub and was quickly scribbled onto the back of a beermat.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Have you put up their WS on PC ? be interesting to read, thanks Kafka and good luck for tmw.

[Kafka]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I think you can see my thread in Advanced at PAG.
Copies at PC are not on open forum.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thanks Kaf, have your thread at PAG will have a read xx

[gjr1960]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Just read MSE update sensible advice or botttling out ? Not sure but what is for sure we need to know now what OFT is doing

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Read more on this UPDATE - consumer groups urge the OFT to continue - Legal Beagles

[gjr1960]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thanks.

I agree we all should push for OFT to continue but we need a little clarity now they said statement in December but when?

Citi repaying 20 billion ? bonus time again me thinks,

Also nonsense of 50% tax on bonus arent they supposed to pay 40% anyway therefore chancellors way of wrist slap is charge and extra 10% which no doubt through Tax planning will disappear !!

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thanks.


Also nonsense of 50% tax on bonus arent they supposed to pay 40% anyway therefore chancellors way of wrist slap is charge and extra 10% which no doubt through Tax planning will disappear !!

It is the banks themselves that are liable for the 50% tax on the bonuses they pay regardless of the income tax their employees pay.

[gjr1960]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Thanks for pointing that out also noted it only applies to discretionary bonus ? what if bonus part of pay structure and not discretionary , call me a cynic but the bankers too quick to repay government money so there must be something in it for them .

[natweststaffmember]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Increasing wages rather than giving a bonus would fall outside of the Government's announcements and it has been done before.

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I don't feel there are much legs in 5(1) of UTCCR or s 140 of the CCA with regards to historical refunds. The rest, misrepresentation etc, I don't know, not feeling overly confident that the powers that be will allow that to happen however true it is/may be.

I really think the best bet is a competition enquiry, a negotiated end to the reclaims so people arent disadvantaged (much as we have spelt out in the report) and concentrating on future charges through new regulation and the pressure from OFT PCA market study.

I'm probably having a down day but I'm tending to lean on the straw clutching side of things - we all know the charges are unfair and have throttled us in the past - I just want to concentrate on making sure they can't in the future and the people in hardship are treated properly and fairly, and making sure that people can come out the otherside of court claims without having lost too much.

I don't want to give up because I have been there, crying my heart out BEGGING some call centre nobody to refund the banks charges so I can pay my mortgage and feed my kids and I will keep fighting but I wont take others down any route I'm not confident in.

Sorry but I'd feel crap if I didn't say that, feel crap for saying it too but there we are, its ONLY MY PERSONAL OPINION and a fuzzy emotional one at that so feel free to ignore me.- am off to make a MASSIVE CHOCOLATE CAKE now.