One million in bank charge logjam

[Legal Beagles]

Almost one million people have had their claims for the return of their bank overdraft charges frozen since July 2007.

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[Amethyst]

Re: One million in bank charge logjam

One million in bank charge logjam


Mr Justice Andrew Smith made the first judgement against the banks in 2008

Almost one million people have had their claims for the return of their bank overdraft charges frozen since July 2007.
Figures obtained under the Freedom of Information Act (FoI) from the Financial Services Authority (FSA) reveal the scale of the backlog.
Nearly 973,000 complaints have been put on hold by the UK's banks, with nearly 27,000 stayed in the UK courts.
The figures were obtained by the consumer campaign group Legal Beagles.
"I am surprised - it's huge," said Nick Spooner of Legal Beagles.
"It's far more than I thought," he added.
Long process
When the volume of claims from disgruntled bank customers reached a crescendo in the summer of 2007, the authorities and the banking industry sought a joint solution.


Banker who helped campaigners against bank charges

The main banks and the Office of Fair Trading (OFT) agreed to start a High Court test case to resolve if bank charges were fair and legal.
In the meantime, the FSA allowed the banks and the Financial Ombudsman Service (FOS) to put any fresh claims on hold, with the judiciary also allowing county court judges to stay any new cases that were lodged in the courts by claimants.
The legal process has, however, taken far longer than originally anticipated.
After failing to overturn the OFT's jurisdiction in the matter at both High Court and Appeal Court level, the banks are now planning to appeal to the House of Lords later this year.
They wish to challenge the current High Court and Appeal Court rulings that the OFT, under the 1999 Unfair Terms in Consumer Contracts regulations, can decide if their overdraft fees are fair or not.
Next year?
The second stage of the litigation, which will decide the actual fairness or otherwise of the banks' charges, is unlikely to start before 2010.

Surely the figure must represent the highest number of consumer complaints about a single issue?


Nick Spooner, Legal Beagles

The OFT recently said its own investigation into that point might not be to be finished until the end of this year.
That means some bank charge claimants might eventually have to wait for three years before being able to pursue their currently frozen claims.
"Most of the claimants would have been aware at the time they complained that their complaints would have been automatically put on hold," said Mr Spooner.
"Surely the figure must represent the highest number of consumer complaints about a single issue?"
The banks have never admitted how many claims they settled before new cases were put on hold in the summer of 2007.
But estimates by the BBC, based on information from the banks' annual reports for 2007, suggested that in the course of that year, the banks paid out £784m to about 378,000 customers.
Many of these claims involved customers going to their local county courts, with the banks then typically settling and paying up, rather than running the risk of a local judge deciding that their charges were illegal.

[Amethyst]

Re: One million in bank charge logjam

HARDSHIP CLAIMS

AFTER the waiver exemption was clarified
(figures September to November 2008)

Submitted: - 29,148
Accepted - 8,008
Denied - 9,905

27% accepted



BEFORE the waiver exemption was clarified
July 2007 to August 2008

Claimed - 68,519
Accepted - 16,587
Denied - 14,390

24% accepted


Still in progress - 11,498
Gone to Ombudsman - 1,926

So basically the exemption clarification hasn't made any difference whatsoever.



For anyone planning on trying for a stay lift - of 27,000 Stayed cases in the courts - ONLY 8 have been lifted since July 2007.

[TANZARELLI]

Re: One million in bank charge logjam

Well done on the article folks.

[natweststaffmember]

Re: One million in bank charge logjam

who is that very smart banker in the video in that article?

[TANZARELLI]

Re: One million in bank charge logjam

who is that very smart banker in the video in that article?

Pass!! lol

[EXC]

Re: One million in bank charge logjam

http://www.moneysavingexpert.com/rec...ank-charges-wa



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News listing filtered by, Reclaim £1,000s, April, 2009.
Over a million in bank charges backlog

Guy Anker
News Editor
7th April 2009



Nearly one million bank charges victims have claims to get their money back on hold, according to official figures.
But the true figure is likely to be well over one million because the stats from City regulator, the Financial Services Authority (FSA), only go up to November 2008.
Campaigners say it’s time the banks and building societies finally admitted defeat and paid up to spare reclaimers more pain.
The figures show 972,500 claims were placed on hold by banks between July 2007 and November 2008, and almost 27,000 have been suspended by the courts.
Some 98,000 consumers submitted claims insisting they were in financial hardship during that period. Some of these, where banks have not accepted a complainant is in hardship, are now on hold.
The figures came from a Freedom of Information Act request from the website LegalBeagles.info.
Crucially, banks have to hear cases from those in hardship, despite the fact bank charges reclaiming has been on hold since July 2007.
Back then, the FSA allowed banks and building societies permission to sit on most claims pending the result of a landmark test case to decide whether charges of up to £39 a time for a bounced payment or for exceeding your overdraft limit are fair. Prior to that, almost £1 billion had already been reclaimed
The test case is still ongoing. In the latest twist last week, the House of Lords granted banks the right to contest February’s Court of Appeal ruling that their charges can be subject to 'unfair contractual terms' laws.
The upshot of this is that if the banks win the appeal, they win the test case and consumers will have to find new avenues to get their money back.
If the banks lose the appeal, the Office of Fair Trading (OFT) will decide whether their charges are unfair. If that’s its conclusion, as its provisional findings indicate it may be, it should reopen the reclaiming floodgates. However, the banks could still contest any such ruling in the courts.
The OFT announced last Friday it is investigating three banks’ charges to help it determine whether they are fair. It’s scrutinising those from HSBC, Lloyds TSB and Clydesdale Bank. This doesn’t let others off the hook just that it thinks the trio’s charges are representative of the rest of the market. A decision on fairness is expected later this year.
Wendy Alcock, banking analyst at MoneySavingExpert.com, says: "It’s time the banks finally paid up. They are dragging this issue out and forcing consumers into waiting an age to get THEIR money back, while also continuing to charge these ridiculous fees. Importantly, if you’re in hardship, get your claim in as banks have to hear your case."

More on reclaiming and free template letters: Bank charges news, Bank charges reclaiming, Reclaim credit card charges
Discuss this story: Charges backlog
External Link: British Bankers' Association, OFT, FSA, Legal Beagles

[Amethyst]

Re: One million in bank charge logjam

Should we be doing press release type thingys you think? Not sure we have the time or manpower tbh.

Nice of MSE to mention us

[natweststaffmember]

Re: One million in bank charge logjam

Discussion: Charges backlog, hint hint

[EXC]

Re: One million in bank charge logjam

Yes it was nice to get an acknowledgement.

Not sure about doing our own press release type thingys myself. Why bother when the BBC can do a more effective job for us?

[Shazzaw]

Re: One million in bank charge logjam

"The upshot of this is that if the banks win the appeal, they win the test case" - Quote from MSE article.

Is this really the case - if the HoL go with the banks then it's all over and the OFT cannot appeal themselves ????

Sounds worrying to me that everything now rests with the HoL decision.

shazza

[Amethyst]

Re: One million in bank charge logjam

The OFT can appeal the HoL decision to ECJ I think, I can't see the HoL overturning the decision thus far and really the FNB case.

[TUTTSI]

Re: One million in bank charge logjam

If ever you want his contact details I have chatted with Guy Anker about 18 months ago, he is very much in favour for the bank charges campaign and for getting justice for us. I think he is a very usefull contact.

[EXC]

Re: One million in bank charge logjam

The OFT can appeal the HoL decision to ECJ I think, I can't see the HoL overturning the decision thus far and really the FNB case.

I agree. If the banks were to win in the House of Lords it would seem to me the case would be perfectly suited to be referred to the ECJ and I couldn't imagine that an issue of such importance wouldn't.

[Amethyst]

Re: One million in bank charge logjam

One million bank customers in limbo

A freedom of information request has revealed how many claims for "unfair" bank charges have been frozen

David Budworth

div#related-article-links p a, div#related-article-links p a:visited { color:#06c; } Nearly one million bank customers have had their claims for the return of sky-high bank charges put on hold since July 2007, according to figures obtained under the Freedom of Information Act.
Statistics from the Financial Services Authority (FSA) reveal that nearly 973,000 complaints have been frozen by banks and building societies, since the start of the Office of Fair Trading (OFT) test case on bank charges. Almost 27,000 cases have also been put on hold in the UK courts.
A waiver, allowing banks and the courts to freeze claims, was introduced by the FSA at the start of the OFT court action in July 2007.
It was due to expire in January. However as the test case, against eight institutions responsible for the majority of the UK’s current accounts, is far from complete, the FSA has allowed banks to continue to put claims on hold until at least the end of July.
Related Links

• Bank charges case to go to appeal

• Bank charges claims delayed again

Claims still have to be assesssed and payments made in case of "genuine financial hardship". However, out of nearly 98,000 people who have applied to the banks for the waiver to be suspended only 24,500 have been successful.
The figures were obtained from the FSA by Legal Beagles, a consumer website campaigning for banks to return "unfair" charges to their customers.

One million bank customers in limbo