FOI - FSA waiver - Ten applications to vary charges terms

[Amethyst]

Tel. 020 7066 9378
Our Ref. FOI1107


Dear Ms Amethyst - Legal Beagles
Freedom of Information: Right to know request

Thank you for your request under the Freedom of Information Act 2000 (the Act), for the following information:


“My request pertains to the banks’ Complaints Handling Waivers issued by the FSA on 26 July 2007 and 26 July 2008 and in particular section 21 of the Waiver Direction - monthly reporting - ‘Changes to charges’.

The information I seek comprises of 7 elements.

Request

1) Please supply me with the total number of applications to date that the FSA has received from personal current account providers to change the level and/or structure of unauthorised overdraft charges.

2) Please supply me with the dates the above applications were submitted to the FSA.

3) Please supply me with the total number of applications to date that were granted by the FSA in their original form.

4) Please supply me with the total number of applications to date that were not granted by the FSA in their original form.

5) Please supply me with the total number of applications received by the FSA that are currently pending.

6) Does the FSA conduct it’s own analysis to satisfy itself that the proposed changes to the structure and/or level of charges are not materially adverse to its customers?

7) Does the FSA consult any other body, such as the FSA Consumer Panel, when considering applications?”



Your request has now been considered and I will answer each point in turn:



1) The FSA has received ten applications in relation to section 21 of the waiver direction dated 26 July 2008.

• 2) The submission dates were as follows:

· 08 August 2008

• • • 1 11 September 2006
      2 06 October 2008
      3 20 October 2008
      4 21 October 2008
      5 05 November 2008
      6 10 November 2008
      7 28 November 2008
      8 19 and 24 December 2008.
    
    
  
  

3) Four of these applications were agreed to by the FSA in their original form.

• 4) Four of these original applications were not agreed to by the FSA in their original form.
  5) Two applications are currently pending.

Please note that questions 6) and 7) were not dealt with under the Freedom of Information Act as they weren’t requests for recorded information however, our response to these questions is below:

• 6) The FSA makes an assessment of the analysis that firms are required to undertake when applying for a variation of condition 13 (21) in the 26 July 2008 waiver direction. As part of such an assessment, the FSA may require a firm to provide additional analysis or further information to support its application.
  7) No. As explained in our answer to question 6, we require firms to provide sufficient evidence of the impact of any changes they are planning for the FSA to assess whether the impact is likely to be materially adverse to consumers. Proceeding in this way enables the FSA to continue to satisfy itself that having the waiver direction in place will not result in undue risk to the customers that the FSA's rules are intended to protect.

As you may be aware all the waiver directions granted to the firms (and finalised variations) have been published on the FSA register. Also, the FSA has issued several press releases as the OFT Test Case progresses and regularly updates moneymadeclear:
http://www.moneymadeclear.fsa.gov.uk/news/product/unauthorised_overdraft_charges_test_case.html
If you have any queries then please contact me.
Yours sincerely

Sherine Malko (Ms)
Information Access Team
Financial Services Authority

[EXC]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Excellent Ame well done.

Taken in isolation the answer to Q6 is astonishing! And even taking account of the answer to Q7 it still appears that the 'analysis' of the contracts is undertaken soley by the banks themselves and the FSA merely assesses that analysis.

This reads to me that the banks are free to cherry pick examples of the impact of their new terms and present them for assessment.

I think it was Lloyds who were the first of the banks to change their charging structure under the waiver and the then FSA Director of Retail Markets, Clive Briault, limply said ''the possibility that a few people might have been disadvantaged did not mean the waiver should be cancelled'' which in my book dosen't sound like a particularly thorough assessment, let alone analysis.

http://news.bbc.co.uk/1/hi/business/7105911.stm

I wonder if some bright spark could figure out who are the 2 banks who's applications are still pending?

[EXC]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Any ideas for a follow up on this?

I'd dearly love to know if the FSA were aware of the of Barclays opt out for the reserve and if so, did they assess the impact of it? But I very much doubt if they would give bank specific information.

[Amethyst]

Re: FOI - FSA waiver - Ten applications to vary charges terms

I was thinking about this in bed this morning (saddo) and specifically barclays. Did Barclays apply for exemption from the waiver, or did the FSA decide the new terms were not penaltys or UTCCR applicable and thus exempted them. From what they say in the moneymadeclear information Barclays decided for themselves, which somehow doesn't seem fair, as now this way of couching the terms doesn't get tested.

Quote FSA
Barclays introduced replacement terms and conditions on 18 August 2008. Our waiver does not cover complaints and charges set by these terms.


Why doesn't it ? It still regarding overdrafts - the £8 penalty for unauth overdraft still exists.

Thing is asking for company specific info may not be accepted under FOI. I have read a few older FOI requests and there have been accepted requests for copies of letters betweem the FSA and other government departments. Not sure if ones between commercial companies and the FSa would be allowed or declined as commercially sensitive.

I agree with the rest of what you said about question 6 too. Surely they should have investigate impact themselves, the banks are going to make things look as good as possible to get the terms through. We know how easy it is to make the terms/fees look as bad or as good as possible.

I'm not sure knowing things like who made the decision re barclays etc would help that much.

Joined that guys facebook group btw. Wish there was some law we could use regarding this opt out stuff, as that seems the main problem with the reserve accounts.


Or ask Barclays.....?

[Amethyst]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Tools has just mentioned possibly writing to OFT and ask them their views on opt out without being barclays specific - re opt out and unfair terms etc.

[EXC]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Yep that is sad.

It's the commercial confidentialilty aspect that would prevent the FSA from playing ball (I think) which is why dealings between the FSA and government departments are fair game.

The other stumbling block is that FoIA only applies to 'informatiom held' as opposed to views, procedures and policy as was pointed out for answers 6 & 7 in your request, although they did answer them voluntarily.

I definately agree though that the opt out is the single most negative aspect of Barclays terms and we should try something.

Even without mentioning Barclays I very much doubt the OFT would give us their views on opt outs especially when they're still investigating and legal proceedings are ongoing.

Banks have to apply for waivers to cover each of their terms - they're not automatically given - and I did read somewhere (can't remember where) that Barclays didn't apply for one toi cover the reserve T&Cs as in their view thay didn't apply but I don't know why.

[Amethyst]

Re: FOI - FSA waiver - Ten applications to vary charges terms

hmmmm I suppose they see it as an overdraft fee rather than an unauthorised overdraft fee. Much like the Natwest £28 a month one. Although it isn't, at all, in my view.

Can we word something so it has nothing to do with banks....there must be other financial products with ''we'll add this to your account and charge you for it unless you opt out'' type things we can use as an example. Maybe will have a think later on. Unless any roll off the top of peoples heads. Would be interesting to get their views on the fairness of opt outs as opposed to oft ins, we can then go in with the barclays part to the fsa/barclays.

Maybe even write a nice letter to barclays asking why they chose to do opt out (something about being easier for customers i suspect nothing to do with profiting from vulnerable people for not realised you had to opt out)

[EXC]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Bearing in mind we can't explictly ask for bank specific info and can only ask for the FSA's 'information' as opposed to views I think we should ask for their assements of any opt-out clauses that were included in applications to them.

[Amethyst]

Re: FOI - FSA waiver - Ten applications to vary charges terms

Reminder.....

[righty]

Re: FOI - FSA waiver - Ten applications to vary charges terms

It was my understanding that whether or not their new charges can be justified is irrelevant in that the waiver was agreed on the clear understanding that none of banks would increase or amend their charges , lawful or not, to the detriment of the consumer, something that every man & his dog (except the FSA) knows they have done