OFT Test Case Discussion

[iancognito]

OK looks like the banks have got this pretty well stitched up, points picked up from various sites today:

• The banks approached the OFT, not the other way round, a sign of desperation? possibly the only way to stop the tide of charges claims, as they obviously can't justify their charges.
• The OFT have stated, in their opinion, the charges are unlawful, they will be using banks current and previous T&Cs to prove this.
• The FOS have allowed the banks to suspend their complaints procedure on bank charge claims - this is the 8 weeks they always quoted in reply to prelims. They will now have to log claims but will not have to deal with them until after the ruling.
• The banks will be applying to the Master of Rolls to have all current court claims stayed, rather than risk leaving the decision to individual courts/judges.

So - a couple of questions to chew over

• How does this delay affect current claims re the Statute of Limitations? given that claims could be at least 1 year older when they get a decision?
• If we are not allowed to pursue charges claims, why are the banks still allowed to impose charges?
• Can we now tell banks/dca's that they cannot pursue debts that contain an element of banks charges?
• If the banks ultimately lose (even if it goes to appeal/house of lords) will they be forced to pay back all charges or only those requested, and will they pay them back on demand?
• If the above is yes, what will happen to all those court cases already in progress and stayed pending this decision? a lot of money wasted there, will court costs still be repaid even if cases don't need to be heard, and will interest still be paid for those cases?
• Are there any other options for people on benefits, I take it the letter of appropriation will still stand?
• What will happen to websites such as this, can we survive the test case and are members willing (or able) to support it in the meantime?

Please feel free to add your further comments/questions but it would be good to keep the debate to one thread, there's hundreds of postings asking the same questions on other sites - cheers

[Turboman]

And does this include Credit Card & Mortgage claims?

Turbo

[iancognito]

No Turbo

The decision on Credit Cards has already been made and this is in relation to bank unauthorised overdraft charges only - but no doubt the CC and mortgage companies will try that one - DON'T FALL FOR IT!!!!!

[Nattie]

I think that the recurring theme in all this is that while all claims are halted surely someone will have the guts to bring an injunction against the banks to halt all penalty charges until such a time that the OFT actually rule on something substantive. My feeling is that the course of events will drag on for two or more years. If the courts say a stop in cases without a stop in charges themselves then the fairness of legality in the UK for me, clearly in football terms that they were 1:0 at the turn of the year, equalised with the Berwick case and the publicity involved, and now are leading 2:1 because they will continue to charge unlawful fees(THEY ARE UNLAWFUL NOT ILLEGAL--someone please tell Declan on BBC Breakfast please) while the process is ongoing. I think it is ridiculous. Why can charges still continue to blight people's lives while a long and lengthy process goes on?

[CYNthesys]

My sentiments entirely
WHY NOT A PRELIMINARY INJUNCTION?

A preliminary injunction, or an interlocutory injunction, is a provisional remedy granted to restrain activity on a temporary basis until the court can make a final decision after trial.

[Nattie]

Totally agree, while the test case is ongoing no charges can be levied until the test case is decided. Of course, that means the bank can return items but simply not charge for doing so.(it would annoy them no end )

[Kafka]

[LIST][*]How does this delay affect current claims re the Statute of Limitations? given that claims could be at least 1 year older when they get a decision?

I think that if you are sticking within the 6 years, everything counts within 6 years of filing the claim. If the bank choses to delay the decision, then you should still be able to fight for the claim as submitted, including the additional interest accruing.

A downside of course is that this will tie up court fees for an indefinite period. I have £120 tied up in a Yorkshire claim where they are due to file a defence before 8 August. If the court refuses to fulfill the commitment to pursue this claim will I be refunded? or can I claim interest on the fee when judgement is made? It is simply unjust if the courts refuse to pursue claims that are already in progress.

Another point is that the issues revolve around unauthorised overdraft charges. If a charge has been placed to refuse a DD for example, this has been done to avoid an unauthorised overdraft, so technically this is a different matter. What would happen if you sued a bank for 30 refused DDs at £20 each. The £600 would not include unauthorised OD fees by definition. Would such a claim be allowed to proceed? The banks would obviously say no, but it will be interesting to test it.

[Nattie]

I am afraid they have classed unpaid items and unauthorised borrowing in the category classed as Unauthorised borrowing. That route is out, as well as referral fees.

[Kafka]

It can't be unauthorised borrowing if they don't lend the money can it, whatever they say? It is a penalty charge pure and simple, not an unauthorised OD, if it doesn't cause an immediate OD.

It will be interesting to test this properly in the courts. The banks also claim that their penalties are service fees but this could never stand up in court if the true costs were revealed.

[Nattie]

I agree, but the OFT has laid down like a carpet and said, walk all over us, and the banks have. It is diabolically idiotic to continue to charge WHILE a test case is being heard. It will drag on for YEARS not 12 months. HORRIFIC. Oh, and GOOD LUCK TOM BRENNAN FOR MONDAY, I have switched allegiance.

[CYNthesys]

Many of the Banks Top Brass have already referred to these charges as Penalty fees, how can they backtrack now and claim they are service fees.
I will earch for the relevant links and post asap

[Celestine]

Regarding the Limitation Act aspect of these claims.

If the OFT eventually win in court and prove the charges are unlawful, that would constitute the final piece of the jigsaw regarding the true nature of these charges.

If the charges are proven to be unlawful it will become significantly easier to claim that the true nature of the charges had been 'concealed' and under s.32 b LA 1980, the 6yr limitation period from the cause of action would fall away.

This area requires significant protest and questioning to prevent them sneaking this under the wire or striking a deal to limit all claims to within 6yrs.

[veilside01702]

I am just another member here, but feel we are being royally stitched up!
I have this nagging feeling that the banks have approached the OFT and agreed to these test cases, but already struck a deal with the OFT should they lose...
Why would they even consider letting the OFT bring these cases if they didn't have a get out of jail free card to play??
My nagging sus****ion is that a deal would have included the 6 year limitation being fixed and all cases currently lodged being repaid without interest, if at all....
If the banks lose in court, the OFT can step in and state that the banks charges should be £12 as with credit cards and that customers can only get the difference back....that way it saves the banks, kills all court cases and stabs us all in the back, but makes the OFT look good for bringing the cases to court!
Win, Win for the banks and OFT.....
Correct me if I am being paranoid here....
I have just become so cynical of the OFT, Banks, FSA and the ICO.....None of them give a hoot for us customers and claimers......
If they did they would have forced the banks to suspend all charges as you already pointed out, and would have forced the Banks to supply subject access information as required.....
Sorry if I am wrong here.....just my conspiracy theories raising their head.....lol
Russ

[Nattie]

Veilside. The OFT did say the Credit card charges were £12 but people are still suing and winning. Veil, don't worry about what is going on outside and publicly. THere are a lot of people working in the bankground and privately. I do understand the conspiracy bit though

[iancognito]

Can we just clarify things on what the OFT actually said about credit cards and the magic £12 figure the Credit Card Companies are quoting

We consider that a contract term is likely to be unfair if it requires consumers to pay more as a result of a default than the court would order them to pay if they were sued for breach of contract. This means that a default charge should not exceed a reasonable pre-estimate of the administrative costs that the consumer ought to have realised would be likely to be incurred by his or her card issuer in dealing with defaults. What costs were in the reasonable contemplation of the consumer would be a question for the court to decide. We think that in general terms a default charge may include postage and stationery costs, and also a proportionate share of the costs of employing staff and of maintaining premises and IT systems in order to deal with defaults of the same kind. The precise level of any particular fair default fee, however, would depend on the business circumstances of the particular credit card issuer.

We expect card issuers to recalculate their default charges in line with the principles in our statement to achieve consistency with unfair contract terms legislation. We have decided that, as a provisional step, it is appropriate to give priority to addressing default charges which exceed a simple monetary threshold of £12, in line with our duty to use our resources to tackle contract terms that have the potential to cause the most serious harm to consumers. We are not suggesting that default fees should be set at £12, and a court will certainly not consider that a default fee is fair just because it is below the threshold.

• So basically, charges should be a proportion of their costs incurred in order to deal with defaults.
• They will give priority to investigating charges set at above £12
• A default fee is not fair just because it is set below the [£12] threshold.

It is because of the above statement that we can continue to pursues credit card charges, whether set at £12 or not, if a similar statement was made about bank charges this would apply there too.

The banks will have spent the last couple of years trying to justify their charges as high as possible, they have obviously not go anywhere near the £38 (or whatever) they are charging otherwise they would have been defending in court.

Whatever figure they have managed to get to (which I suspect will be higher then £12) will be the figure at which they will be set - assuming the OFT win the case.