Consumer Action Group demands modification of Bank Charges Waiver

[EXC]

1st March 2009
PRESS RELEASE

Leading Consumer Rights organisation demands modification of Bank Charges Waiver.

A Consumer Action Group spokesman speaking on BBC Radio 4's MoneyBox programme, called for a modification of the FSA waiver, which has allowed all UK banks to suspend dealing with the claims for the return of unlawfully seized bank charges.

Marc Gander, cofounder of the Consumer Action Group, said that the FSA waiver should now be modified to prevent banks from taking legal action, and entering credit register defaults, against customers who were unable to pay the charges which banks are continuing to levy.

The Consumer Action Group call for the waiver to be modified comes in the light of last week’s Court of Appeal decision, which unanimously upheld the decision of the High Court that bank charges for exceeding overdrafts limits and bouncing cheques could be subject to an assessment for fairness by the OFT.

The call for modification was made came during a discussion at which Ian Pollock, BBC business correspondent, and Angela Knight, chief executive of the British Bankers' Association were present.

Since July 2007, UK banks have been released from their normal obligation to investigate bank charge complaints within eight weeks. Instead, all such complaints have been put on hold pending the final outcome of the OFT litigation against eight UK banks. In response to their defeat in the Court of Appeal last week the banks announced that they would now appeal to the House of Lords. It is expected that this further step could take the suspension of customer complaints well into 2010.

Mr Gander pointed out that although half a million bank customers were currently being prevented from recovering their bank charges, for the banks it was business as usual and that not only were they continuing to levy charges but they were continuing to apply enforcement procedures and using the credit reference system to enter defaults against those customers who were either unwilling or unable to pay the banks' very high level of charges.

He went on to say that it is extremely unfair and unjust for banks to continue such punitive and damaging action against ordinary people when four senior judges have now concluded that the issue of whether the charges are unfair can be assessed by the OFT.

The OFT has already indicated a preliminary view that the present level of bank charges is unfair.

Angela Knight claimed that the banks were already helping their customers, for instance by agreeing to process refund claims where the customer was suffering from hardship, but Marc Gander responded that this was clearly not the case.

The Consumer Action Group website has over 210,000 members, and there are many hundreds of cases in which people were clearly suffering from great hardship. The Hardship Guidelines are not clearly defined, and it is only in very exceptional circumstances when a bank agrees to process a claim. In any event this does nothing to solve the grave injustice caused by a negative credit file entry for a bank charges-related debt.

Consumer Action Group.
1st March 2009

Listen to BBC MoneyBox programme

[Curlyben]

Re: Consumer Action Group demands modification of Bank Charges Waiver

Errmm, Yes I actually heard this, how sad is that
I believe that the Waiver does preclude enforcement, obviously if need to be reminded of this fact, assuming there are charges involved, which there are bound to be on a defaulted bank account.

[Amethyst]

Re: Consumer Action Group demands modification of Bank Charges Waiver

I think the word MIGHT probably needs removing from the waiver terms where it discusses enforcement action,also needs moving out of the financial hardship section. Just needs enforcing properly.



Here

15.
When dealing with complainants in financial difficulty, the firm should consider the following steps in respect of the period during which they are assessed as being in financial difficulty:
(a)
the firm might waive future unauthorised overdraft charges; and
(b)
the firm might not enforce debts against complainants in financial difficulty to the extent that these debts are made up of unauthorised overdraft charges.

and of course under dispute rules of the banking code....the waiver does specify it expects the banking code to be adhered to

[EXC]

Re: Consumer Action Group demands modification of Bank Charges Waiver

Enforcement of disputed accounts is also covered in the OFT guidlines. I have to say it's a bit late in the day to be calling for changes in the waiver and the press release simply looks like a publicity puff for his appearance on the radio.

I can't think of any other reason as the test case has been tucked away in a sub forum for nearly 2 years and to my knowledge Bankfodder has yet to make a single post there.

[Amethyst]

Re: Consumer Action Group demands modification of Bank Charges Waiver

Its also covered in the http://www.oft.gov.uk/shared_oft/bus...dit/oft664.pdf

h. ignoring and/or disregarding claims that debts have been settled or are
disputed and continuing to make unjustified demands for payment

i. disclosing or threatening to disclose debt details to third parties unless
legally entitled to do so

The Waiver is a waiver of DISP rules in the FSA handbook. So only those waived should be specified - heavy going but its here - FSA Handbook - Full Handbook

[natweststaffmember]

Re: Consumer Action Group demands modification of Bank Charges Waiver

I don't agree with a change to the FSA Waiver is required and I think it is a bit late to go on about it now since it was December/January time when that issue should have been raised. It is a bit late in the day to say, hang on, can we change this bit of the waiver cos it isn't clear enough on the element of debt related defaults being levied. There has been an FSA Waiver in place since July 2007 and the last renewal was January 2009. The County Court stays remain in force and people are getting charges refunded and suspended during the waiver, albeit, sometimes you have to appeal to the bank against their decision. Furthermore, advice on CAG specifically states never to speak to the bank, so when they claim people who are clearly in hardship are not getting paid out, well, if they spoke to the bank rather than delay by going to the Financial Ombudsman Service who are clearly stretched with PPI claims then maybe more results would become apparent. The reason they are ringing is to clarify hardship which is their duty under the FSA Hardship, and we have seen claims paid out after this phone call has taken place.
I guess we all have our take on the waiver, and I stated in December 2008 on here that pressure should be put on the FSA then and not when it is too late to change it. Maybe a good start for the next waiver period which will be July this year perhaps which is a postive step in my opinion.

[EXC]

Re: Consumer Action Group demands modification of Bank Charges Waiver

Furthermore, advice on CAG specifically states never to speak to the bank, so when they claim people who are clearly in hardship are not getting paid out, well, if they spoke to the bank rather than delay by going to the Financial Ombudsman Service who are clearly stretched with PPI claims then maybe more results would become apparent..

CAG site team member 12 Feb 2008:
''You can ask, but frankly you are highly unlikely to succeed at the moment, even if you can demonstrate hardship IMO. You wouldn't even get a hearing to decide whether it could be lifted until after the judges ruling in the OFT case, so it seems a pointless exercise to me. Just my 2p worth.''

The same CAG site team member 25 Feb 2009:
''This all started because of people claiming back their charges, and eventually this case was made to deal with it. Now we need to continue being a nuisance and make it clear that we need our money back. In the current economic climate more and more people are experiencing hardship so we need to press the courts to lift stays - and hopefully prompt them to speed up the process."

[TANZARELLI]

Re: Consumer Action Group demands modification of Bank Charges Waiver

CAG site team member 12 Feb 2008:
''You can ask, but frankly you are highly unlikely to succeed at the moment, even if you can demonstrate hardship IMO. You wouldn't even get a hearing to decide whether it could be lifted until after the judges ruling in the OFT case, so it seems a pointless exercise to me. Just my 2p worth.''

The same CAG site team member 25 Feb 2009:
''This all started because of people claiming back their charges, and eventually this case was made to deal with it. Now we need to continue being a nuisance and make it clear that we need our money back. In the current economic climate more and more people are experiencing hardship so we need to press the courts to lift stays - and hopefully prompt them to speed up the process."

How do you make a test case, can I have the recipe?