OFT let consumers down AGAIN on Overdraft Charges

[Amethyst]

Re: OFT let consumers down AGAIN on Overdraft Charges

OFT causes bank customers to pay more for less Telegraph Blogs

People need to be able to say no to bank charges - This is Money Blog

[Amethyst]

Re: OFT let consumers down AGAIN on Overdraft Charges

America can manage it !

B of A scraps debit overdraft fees
• 15 Mar 2010
Bank of America has scrapped the $35 overdraft fees it charges on debit purchases, according to The Wall Street Journal, reported by The Euromoney Institutional Investor Online Portal. Under the new policy, any customer who tries to buy with insufficient funds will be denied at the point of sale.

[EXC]

Re: OFT let consumers down AGAIN on Overdraft Charges

OFT causes bank customers to pay more for less Telegraph Blogs

I think I'll send that to the OFT. What's HSBC's address again?

[natweststaffmember]

Re: OFT let consumers down AGAIN on Overdraft Charges

To put it bluntly, The Office Of Fair Trading had the chance today to show that it had cojones(testicles) and in the end what it has shown is that the faith that many of us had in a regulator to do a job has been misplaced. I think the conservatives were going to get rid of it, weren't they? I wholeheartedly agree.

If the USA and their federal reserve can have the balls to make it an opt in only service then the UK is clearly far behind our American friends.
Thank you OFT for wasting 3 years.

[Kafka]

Re: OFT let consumers down AGAIN on Overdraft Charges

I've long given up expecting surprises on my birthday, and the OFT did nothing to change that view today with its spineless and self-congratulatory study. My only surprise is that people expected better from the OFT, which has now cemented its credentials as a consultative and advisory body, not a regulator.

Its almost 4 years to the day since the credit card report made clear what banks had to do to realign their charges to actual costs and they have just ignored it, knowing that the OFT would not take action. They will quite happily wait for another two years now to realise that voluntary compliance won't work, as they seem to have no sense of urgency or importance now, while the banks wait to see what consumer pressure will do or a new administration after the spring.

I also couldn't help thinking that their invitation to consumer groups to meet following the SC judgment was also a cynical ploy. Immediately after the judgment they told Stephen Hone categorically that they would not meet consumer groups, but this changed when the Government stepped in to reveal the announcement would be made on 22nd December. Suddenly the consumer groups were welcome participants and politicians made much of the boast that there had been consultation with consumer groups, when I suspect that the decision to surrender to the banks and to sell out consumers had already been made.

Here are some comments I wrote for an announcement at Penalty Charges in the New Year. I looked back today to see if the comments still rang true.

Penalty Charges regrets the recent decision by the OFT that it will no longer be continuing its case into the fairness of bank charges, following the bizarre judgment handed down by the Supreme Court in November. This decision has let down millions of victims of these charges, who have already been denied justice since July 2007, while the banks have remained free to continue levying the charges. The one excuse that the government regulator cannot fight on due to costs (allegedly) beggars belief, in the light of the tens of billions of taxpayers’ money used to bail out the consequences of the same banks’ failings. The Government needs to take drastic action now to regulate the financial services sector effectively and to act on behalf of the public, not the banks’ profits and bonuses. This must be a top priority for the incoming administration after the General Election in the spring.

While the OFT is still chasing the rainbow of ‘voluntary compliance’ from the banks for future charges, the real world requires action to help people to recover the billions already owed to consumers. Penalty Charges is proud to continue the fight for justice, in co-operation with several other consumer forums. This work is investigating a range of new approaches for reclaiming, in the light of the banks’ deceitful claims that charges can no longer be reclaimed. Default charges on bank accounts are both unfair and unlawful, with the income generated by them providing £2.6bn per year that the banks use to cross-subsidise other current accounts. This fact has now been confirmed by the High Court, exposing the false statements sworn by the banks for years that penalty charges are based on genuine costs.

[EXC]

Re: OFT let consumers down AGAIN on Overdraft Charges

http://www.independent.co.uk/news/bu...g-1922340.html

The banks send the OFT packing


Outlook They are smart cookies at HSBC. Within hours of the Office of Fair Trading announcing yesterday that it had come to a deal with the banks on unauthorised borrowing fees, HSBC proudly unveiled a new launch. Its customers will soon be able to opt for an account that does not allow them to exceed an agreed overdraft limit, so the question of penalty fees will never arise.

There is just one snag with the bank's new deal: customers will have to pay a £15 monthly fee for the account. In other words, peace of mind that HSBC will never charge you outlandish unauthorised borrowing charges will cost £180 a year.

Is this what the OFT has in mind when it talks about how competition in the current account market will force the banks to mend their ways? Well let's hope it works, because the OFT hasn't pulled off the trick.

Yesterday's deal with the banks represents the final fizzling out of what once promised to be an explosive investigation into the current account sector. Having failed to get a result in its High Court action on borrowing charges, the OFT was forced to seek a voluntary agreement with the banks. The commitments now made by the industry – in particular, to let customers opt out of unarranged overdraft facilities – were the best the OFT could do.
The watchdog's two-year investigation has had some positive results. The public focus on borrowing charges has led to many banks reducing them – the OFT reckons overdraft penalties are now half as high as they were a year ago. And the industry has also agreed to make it easier for customers to switch accounts.

Still, there is nothing to stop banks charging what they like when customers breach agreed borrowing limits. While average fees have come down, there are still many instances of unacceptably high charges.

Moreover, all those claims for compensation from customers caught out by charges in the past have come to nothing, because the OFT's legal defeat has left victims high and dry. Those claims – more than a million of them, worth several billion pounds collectively – are now being routinely dismissed.

It's worth remembering that the courts ruled that the OFT was exceeding its powers by investigating the level of charges, not that the charges, in themselves, were fair. But the regulator seems to have decided that the judgment was a knock-out punch, rather than seeking an alternative remedy.

The OFT may be right when it says that new entrants to the banking sector will make it harder for the established players to go on as if nothing has changed. But the regulator's threat of more action, should current account terms and conditions not go on improving, will hardly have the banks quaking in their boots.

[enaid]

Re: OFT let consumers down AGAIN on Overdraft Charges

I replied to Telegraph blog here is what I wrote..

As a member of a consumer site I get to see a lot of heart breaking situations that some people have gotten into. Most could have been prevented if people didn't bury their heads in the sand, this though is very hard to do especially if you think the situation is all your own fault. The banks have often contributed to these peoples downfalls for having a system in place whereas a simple missed payment can lead to a lifetime debt.
I for one would not object to paying for a bank account if they offered a more personal and customer friendly service. If more time and energy was put into understanding their customers needs on a personal basis instead of trying to sell them all and sundry to make even more money then I am sure a lot more wouldn't object to paying either.
As for the OFT they have let the consumer down greatly and not once, but twice.
They were offerd consumers thoughts and feelings on how the banks ran PCAs and were given ideas on what people wanted from this sevice, all this on their request I may add. Looks like that was filed under 'B' (for bin) as so many of consumer complaints are.
Time the OFT folded imo, they havent got the bottle or the clowt to help the people they are there for.

[natweststaffmember]

Re: OFT let consumers down AGAIN on Overdraft Charges

I don't believe that the OFT let us down twice but yesterday's report was a betrayal of the hope many of us had for what COULD be done. I'm sorry but the time has come to legislate because "may" opt out is not good enough.
Page 32 footnote is the one issue where charges are incurred ie where there is an option to put through a card voucher without seeking authorisation. WHY did they not talk to those providers of card swipes. Utter waste of a regulator. Question, where to we go from here?
Downing Street Petition?
Writing to MP's?

[Amethyst]

Re: OFT let consumers down AGAIN on Overdraft Charges

I also couldn't help thinking that their invitation to consumer groups to meet following the SC judgment was also a cynical ploy. Immediately after the judgment they told Stephen Hone categorically that they would not meet consumer groups, but this changed when the Government stepped in to reveal the announcement would be made on 22nd December.

LB submitted thoughts on legal issues to OFT just after the Judgment.

LB met the OFT on 9th December.
MSE on the 10th December
Stephen met with them on the 11th December.


LB, MSE, CAG, Bob Egerton met with the OFT on 4th February.


There have been other meetings before too, as well as submissions asked for and views requested.

I think they have legitimately sought views of the informal consumer groups as well as the formal ones like CAB and Which?

[Judge mental]

Re: OFT let consumers down AGAIN on Overdraft Charges

What a farce, after 3 years of investigation, consultation and a bodged legal challenge the OFT have decided that allowing consumers to change banks, coupled with their anticipation of Tesco and Virgin entry into the market, the Banks will sort themselves out, and they will look again in 2 years to see if this has happened.

Despite their initial loud noises to bring the Banks into line, it now appears that the OFT have decided their role is one to ‘help consumers to understand the costs of their accounts and compare them with other accounts’ . . . . they really don’t get it do they?

The Banks will now be scrutinising the report looking for sentences to be used (probably out of context) to strengthen their defences to future challenges, no doubt claiming they have the backing of the OFT, and they wont have to look to hard whilst ever the OFT feed them lines like this –

‘The Supreme Court found that unarranged overdraft charging terms cannot be assessed in full for fairness.’

This of course was not the outcome, the decision was that they could not be assessed under regulation 6(2) only and other avenues would have given rise to a more likelihood of success.

They will also not ask Parliament for an amendment to the laws which would allow them to pursue their preferred or chosen route -

‘The OFT is not recommending legislative change at the present time.’

Also
‘The OFT has also heard concerns around the operation of basic bank
accounts........These concerns suggest that the basic bank account is not operating as effectively as it might.’

But they are not going to do anything about it

‘Increasingly, it will be possible to opt out of unarranged overdrafts.’

but then incur unfair charges on returned items so achieves nothing.

The minor changes highlighted in the report that have occurred since the OFT's investigation began in 07 are as a direct result of consumer pressure, the OFT have no reason to be back-slapping themselves and one would hope their stance and ‘failure to deliver for consumers’ will be subject to fierce questioning by the Treasury Select Committee.

Office of Fair Trading – fit for purpose? Again they have proved not by choosing diplomacy and negotiation as opposed to enforcement or utilising their given power and authority, to the detriment of the consumer.

[natweststaffmember]

Re: OFT let consumers down AGAIN on Overdraft Charges

Something else struck me today. The OFT has stated that the cost of a bank account has gone down to £150(??) and the opt out of overdraft services, hmmm, well HSBC is gonna cost you £180.00 which is £30 over that amount...

When you look at opt out services you find Barclays--YOU ARE IN whether you like it or not.
LloydsTSB Control---YOU WILL PAY for us to do what we are already supposed to be doing
HSBC----YOU WILL PAY regardless
SANTANDER---If you are the ones incurring charges that are making your situation worse then tough luck because the Zero account excludes anyone who has arrears on the mortgage.

Still, at least they will review this again in 2012 which is 6 years after their first thoughts on the issues became known....won't it be statute barred

[PocketTheDifference]

Re: OFT let consumers down AGAIN on Overdraft Charges

*RANT*
If its our money they are using, why don’t they actually persue that “other Avenue” and try, all they have done is get our hope up over the past 3 years, Dash them in an instance by actually being crap at their approach to this, then eventually faid away....??
If these people are “the Peoples Speech and Power” and the government as always decide to actually Ignore us then theres no hope in this point and proably many more in the Future.

Im not big on these things but take it to downing street, Get that Fat Badger of a Prime Minister to listen somehow, not saying its easy but.....

Seems to me a lot like the Gov “hired an bunch of deliquants” and just let them lay down and take it.

Let down by so many, So many Let down....

Can we not claim Mis Rep – and Get som others to look into it an fight, although i do see that by the time this would be made possible, we’ve already forgoten how much they owe us and will have take a few more million from us all.


I like this aswell

“3.2 The OFT is not a price regulator and has no power to impose price caps
on bank charges or elsewhere. The OFT aims to ensure that consumers
get value for money by making markets work well. Providing consumers
with greater control over whether and when they use an unarranged
overdraft can help consumers to get value for money from their PCAs."

Value for money like Ive had for the past 20 years you mean??? HAHA

Isn’t It crazy and how easy or Stupid would life be if we all took their (OFT) attitude and just “opted” out eveytime we failed at something or just plainly couldn’t be botherd haha.

Think we should remember these days as a National Holiday

Is this mainly down to if they tgave money back etc, then Gov would lose out on something, because I clearly cannot understand why they have to keep wearing blindfolds.

Also Probably Aimed at Ame or Natty, But didn’t they request your input (OFT) etc but now have decided they can’t be botherd??? (im probably wrong …)

it now appears that the OFT have decided their role is one to ‘help consumers to understand the costs of their accounts and compare them with other accounts’ . . . . they really don’t get it do they? - Is OFT funded by Tax payers, if so Id rather STOP the OFT and not pay them for this Crap!!

*RANT OVER*

[righty]

Re: OFT let consumers down AGAIN on Overdraft Charges

*RANT*
If its our money they are using, why don’t they actually persue that “other Avenue” and try, all they have done is get our hope up over the past 3 years, Dash them in an instance by actually being crap at their approach to this, then eventually faid away....??
If these people are “the Peoples Speech and Power” and the government as always decide to actually Ignore us then theres no hope in this point and proably many more in the Future.

Im not big on these things but take it to downing street, Get that Fat Badger of a Prime Minister to listen somehow, not saying its easy but.....

Seems to me a lot like the Gov “hired an bunch of deliquants” and just let them lay down and take it.

Let down by so many, So many Let down....

Can we not claim Mis Rep – and Get som others to look into it an fight, although i do see that by the time this would be made possible, we’ve already forgoten how much they owe us and will have take a few more million from us all.


I like this aswell

“3.2 The OFT is not a price regulator and has no power to impose price caps
on bank charges or elsewhere. The OFT aims to ensure that consumers
get value for money by making markets work well. Providing consumers
with greater control over whether and when they use an unarranged
overdraft can help consumers to get value for money from their PCAs."

Value for money like Ive had for the past 20 years you mean??? HAHA

Isn’t It crazy and how easy or Stupid would life be if we all took their (OFT) attitude and just “opted” out eveytime we failed at something or just plainly couldn’t be botherd haha.

Think we should remember these days as a National Holiday

Is this mainly down to if they tgave money back etc, then Gov would lose out on something, because I clearly cannot understand why they have to keep wearing blindfolds.

Also Probably Aimed at Ame or Natty, But didn’t they request your input (OFT) etc but now have decided they can’t be botherd??? (im probably wrong …)

it now appears that the OFT have decided their role is one to ‘help consumers to understand the costs of their accounts and compare them with other accounts’ . . . . they really don’t get it do they? - Is OFT funded by Tax payers, if so Id rather STOP the OFT and not pay them for this Crap!!

*RANT OVER*

Yes they did ask for Legal Beagles input but as we now see that was only so they could claim they were consulting all stakeholders

I'm still of the view that it's been a monumental stitch up by the OFT, FSA & the Banks

[Kafka]

Re: OFT let consumers down AGAIN on Overdraft Charges

The one I love is that accounts like HSBC's will cost you to avoid their unfair charges. In the old days we might have called this a protection racket and it certainly has more to do with that than the OFT has to do with regulation.
:deadhorse:

[Amethyst]

Re: OFT let consumers down AGAIN on Overdraft Charges

Okay am going to stick up for the OFT so look away now.

I think they have taken consumers views (via consumer organisations) into account when dealing with the investigation and with the banks and I dont think it is some weird ploy so they can say they have done so but not do anything.

They are limited in what they can do, the banks took the issue over charges to court - credit card companies could have done the same but knew they would lose. Banks thought they could win. And did. Thats ruled the OFT have no power to limit the fees.

Very disappointed yes and thought the OFT would go further but really they don't actually have the power to.

People WANTED to be able to opt out of having unauthorised overdrafts - it was one of the main things that has come up time and time again - and the OFT have got the banks to agree to do it - it may take some time, but competition in that area will push the monthly fees for such an account down over time.

I don't feel like we were used at all, I think we did right trying to put consumers views across and try to get the OFT to act on them.

If you read the first interim OFT PCA report and this one they have looked at quite a few areas which we(consumers) put forward and things are improving, slowly and marginally maybe, but improving.

I'm not put off continuing putting consumers views across - we're much more at ground level and in a position to put true views across than say CAB or Which? who's consultation responses tend to be a few case studies and some statistics - so will continue to respond to consultations and complain about stuff we think is wrong - because if we dont, who will? and how will the OFT know whats going on ?

Still flipping angry, yesterday was absolutely furious, but I'm not giving up, so I hope no one else is either.