OFT Q&A 9 October 2008 update

[EXC]

The OFT's updated Q&As 9 Oct

[Amethyst]

Re: OFT Q&A 9 October 2008 update

4. What was the judgment in the second preliminary issues hearing?
Because the April ruling was limited to current charging terms, a further hearing
was held in July on a representative sample of the charging terms in the banks'
historical and basic bank accounts (and certain other non-mainstream current
accounts)
Historical terms and conditions are a representative selection of previous terms
and conditions that are in dispute in the county courts between individual
customers and the banks. Non-mainstream accounts include for example student
and under 18 accounts.

In October, the judge handed down judgment5 in relation to the banks' historical
and other non-mainstream account charging terms. The judge indicated that he
will make a declaration that the terms can be assessed for fairness under the
UTCCRS, and expect this shortly. The judge found that most of these terms are
not capable of amounting to penalties at common law. However, he was not
able to make a ruling in respect of Abbey's May 2005 conditions relating to its
Instant Plus account, Lloyds TSB's terms, RBSG's terms or HBoS' Intelligence
Finance accounts (he has invited further submissions in relation to all but the
last of these). There will be a further hearing to deal with these submissions and
the question of whether permission to appeal will be granted. This hearing will
be fixed within the next 7 days.






5. When will there be a decision on fairness?
We are continuing to progress our investigation as quickly as possible. In mid-
August, we wrote to each of the test case banks setting out our approach to
the assessment of fairness and (except for Barclays where a view on its now
current terms will come later) provisional views as to the unfairness of particular
terms and conditions that impose charges.
At this stage, no bank's terms have been given a clean bill of health and all
banks remain under investigation. The purpose of the letters is to start a
dialogue with each bank to enable us to reach final conclusions as to whether
the terms are unfair, and to identify which issues may need to be resolved in
court proceedings (as envisaged in the litigation agreement between the OFT,
FSA and banks).