FSA-Firms planning for refunds after test case

[Amethyst]

Following the renewal of the waiver in July 2009 and the pending conclusion of the first stages of the test case the FSA are checking that firms have, or have started to implement, processes to ensure swift and effective complaints and refunds (if applicable) handling once the waiver is no longer in place.

If you recall back in November 2008 we received confirmation from RBS that plans were in place to proactively refund customers should the test case and following proceedings require them to.

The FSA, in August this year, have written to all firms asking what they are doing to comply with condition 13 of the waiver.

(13) the firm must ensure that relevant charges complaints that are not progressed as a result of this direction (or the previous directions) are dealt with effectively and swiftly once the outcome of the test case is known (or this direction otherwise ceases to have effect) and must liaise closely with the FSA in order to achieve this. This includes making preparations for dealing with relevant charges complaints when this direction ends and updating those preparations as the outcome of the test case becomes clearer;

Outcome 5 is probably the most relevant.



here are the questions; responses are currently being looked at.

[pinknico]

Re: FSA-Firms planning for refunds after test case

That seems positive.

[EXC]

Re: FSA-Firms planning for refunds after test case

The 2 most interesting questions are these:


2.4 What is the earliest date from which data about the levying of unauthorised overdraft charges is available?

This seems to confirm that the 6 year limitations is out of the window

6.4 What planning has been undertaken for the possibility of a high level of new complaints suddenly being made (eg in response to an event in the test case)?

I'm not sure if this means that refunds will only be given to those who complain about them or if it means other types of complaints ie consequential loss.

[enaid]

Re: FSA-Firms planning for refunds after test case

5.4 If redress payments are required?

Does this mean compensation ?

[natweststaffmember]

Re: FSA-Firms planning for refunds after test case

2.4 for NatWest will be 1991/92 since the old natwest computer system generated a note on the account when charges went out.

[EXC]

Re: FSA-Firms planning for refunds after test case

I'm not sure but maybe redress simply means 'refunds'.

[natweststaffmember]

Re: FSA-Firms planning for refunds after test case

redress would be resolution of the complaint similar to PPI cases.

[Amethyst]

Re: FSA-Firms planning for refunds after test case

Banks prompted on overdraft plans


By Ian Pollock
Personal finance reporter, BBC News


The new Supreme Court will soon rule on overdraft fees

The UK's banks have been asked how they are preparing to repay their customers if they lose the legal test case on the fairness of overdraft charges.
The banks were sent a questionnaire in August by the Financial Services Authority (FSA).
It asked them what plans they had to make sure that repayments could be made "effectively and swiftly".
The Supreme Court will soon rule on whether or not the OFT can decide if bank charges are fair.
That decision may not be the end of the legal test case, which started in July 2007.
If the OFT's authority is upheld, it could lead to a second round of court hearings about the actual level of fees that might be regarded as fair.
But the FSA is anxious to ensure that the banks are ready to pay up, should they eventually have to do so.
The existence of the questionnaire was revealed after a freedom of information request was submitted to the FSA by the campaign group Legal Beagles.
"Due to the amount of fine detail required by the questionnaire, it can only be interpreted as a sign of the inevitability of the charges having to be refunded," said Nick Spooner of Legal Beagles.
Questions
The questionnaire, which asked for replies to be made by 19 September, focused on how the banks will deal with the 1.2 million people whose demands for refunds have been frozen since the summer of 2007.
The FSA's questionnaire went to the 28 banks that have had most complaints against them about their overdraft fees.
The regulator's covering letter said the answers would "enable the FSA to develop best practice recommendations for the industry".
"This includes making preparations for dealing with relevant charges complaints... and updating those preparations as the outcome of the test case becomes clearer."
The questions ask what contingency plans the banks already have in place, including:
• what steps they intend to take in the future
• how they will collect the data needed to work out who might be paid compensation
• how they will calculate the sums involved
• how they will tell customers if a payout is due
• how the money will actually be paid
• whether the banks will need outside help, especially if there are many new complaints
• and if senior staff are in charge of planning for any refunds.
Waiver
If the OFT wins the test case, it could lead to many more people demanding the return of past overdraft fees, a sum that could run into billions of pounds for the industry.
The FSA acknowledged that its questionnaire was the first of its kind on this issue.
But it stressed that the underlying requirements for banks to plan for a redress programme had been in place since 2007.
That was when the FSA first gave the banks permission, under a "waiver" from its normal rules, to park any new complaints until the test case is over.
That year, an estimated £784m was paid to nearly 378,000 customers by the UK's banks as they sought to stem the tidal wave of complaints by settling out of court, rather than by defending their overdraft fees in county court hearings.
In September, the part-nationalised RBS-NatWest broke ranks with the rest of the industry and decided to slash its overdraft charges.

[EXC]

Re: FSA-Firms planning for refunds after test case

On the subject of Freedom of Information Act requests to the FSA I came across the publication of some of them on the FSA site which include some of Amethyst's and mine.

http://www.fsa.gov.uk/Pages/informat.../purpose.shtml

There is one about the number of complaints they had about the waiver which I don't think came from either of us http://www.fsa.gov.uk/pubs/foi/foi_0759.pdf

One amusing request dated 13 August 2007 asked:

..John Tiner marked his departure from the Financial Services Authority with a party on board HMS Belfast and informal drinks at his desk with staff.
I would like to know whether these parties were paid for by the FSA and if so how much they cost, who attended as well as the dates and times."

The requester then discovered that the HMS Belfast beano (costing £10,000) was only one of two parties to celebrate his departure, noting that:

'' That's the day before the watchdog's annual meeting, but the scheduling doesn't look like inconveniencing many. Employees have already started placing bets on who will remain at the departing boss's party the longest. My money's on the demob happy Tiner''.