Govan Law/Mohammed Sawar - excessive charges bill

[Amethyst]

Re: Excessive charges debate

I don't agree with 2.5% at all, or any %. I agree with a set figure proportional to costs which after all is the same however much bounces or is paid. In part 1 he's talking primarly about Loans isn't he, and late payment charges on gas bills and the like? how would the 2.5% be calculated? on the full remaining balance, or 2.5% of the payment that should have been paid but wasn't ? loans I guess its the contractual payment, but bills etc i guess it would be on the minimum payment figure. Its a 2.5% one off charge? actually calculating that would be an additional process and thus an additional cost wouldnt it. The interest is the %. I agree with set charges (proportional to costs) for late payments.

I think its a mistake including the banking overdraft etc in this bill as it is already in progress.



Anyway beside the fact it probably won't go anywhere, it gets it talked about, brings it back into peoples minds and is publicity.....strange timing to do it half way through a test case about similar charges.

[natweststaffmember]

Re: Govan Law/Mohammed Sawar - excessive charges bill

Government always OPPOSES 10 minute bills as well

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

merged two threads.

[natweststaffmember]

Re: Govan Law/Mohammed Sawar - excessive charges bill

I'll give the man his dues he has got a second reading on the bill.

Commons briefing: Prevention of Excessive Charges Bill: ePolitix.com

Commons briefing: Prevention of Excessive Charges Bill

ePolitix.com reports on Mohammad Sarwar's (Lab, Glasgow Central) Ten Minute Rule Bill, which seeks to tackle "unscrupulous" banks.
Mohammad Sarwar (Lab, Glasgow Central) introduced on Wednesday his Ten Minute Rule Bill, the Prevention of Excessive Charges Bill.
It is intended to make provisions which will protect consumers from excessive bank charges.
The Bill would both protect vulnerable people and provide an opportunity for banks to show that they had learnt lessons about responsibility in the wake of the global economic crisis, Sarwar said.
Currently, consumers are paying "disproportionately" high bank charges for "modest contractual failures" with their banks, he warned.
Even more damaging, he noted, was that these bank charges tend to fall mostly on vulnerable people at vulnerable periods in their lifetimes.
Sarwar said that present regulations are too weak and that powerful financial institutions enjoyed too much immunity.
"Consumers needed better legal protection," he said.
His Bill would require that any default charges in a consumer contract with a bank must be "fair and proportionate". It would apply to the whole of the UK, he added.
He referred to Clause 1 of the Bill, making it unlawful for businesses to impose charges regarding a consumer's failed or unauthorised transaction.
Also under his Bill, the maximum which could be levied by the banks for unpaid direct debit charges would be £10, he said.
The Bill was agreed and scheduled for a second reading on Friday, October 16, 2009

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

looking forward to reading the debate on hansard tmw.

[natweststaffmember]

Re: Govan Law/Mohammed Sawar - excessive charges bill

I completely forgot it was even on today

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

1.33 pm

Mr. Mohammad Sarwar (Glasgow, Central) (Lab): I beg to move,

• That leave be given to bring in a Bill to prevent excessive charges or fees from being levied on consumers; and for connected purposes.

Over the last year, we have seen the effects that the irresponsibility and the excesses of the banking sector have had on families and business both here in the United Kingdom and around the world. Tens of billions of pounds of taxpayers’ money has been spent on bailing out our banks in order to deliver help to mortgage holders, businesses and savers. The Bill represents a further measure that must be taken to help those most in need. It is also an opportunity for our banks to show that they have learnt lessons and to act with fairness and responsibility.
In recent years, members of the public have been forced to pay disproportionately high bank charges for modest contractual failures. For example, if a family is late in paying their mortgage they may incur an arrears fee of £60 each month. Over two years those charges can add up to almost £1,500.
In 1998, the average bank charge for customers was £12. By 2006, it had jumped to more than £67—with a £39 charge per declined item, a £28 monthly fee and 30 per cent. unauthorised overdraft interest—which is a 558 per cent. increase in eight years. Bank charges are imposed not just for exceeding an agreed overdraft by a few pounds, but for the act of merely attempting to do so. Typically, they penalise people when they are at their most vulnerable in life and bear no relation to the sums involved.
For example, a constituent’s wages fell because of illness and she was unable to pay four direct debits one week. Her bank imposed default charges of £184, while her creditors imposed individual “failed direct debit” charges of £25, totalling £100. None of her bills has been paid, yet a staggering £284 of charges was imposed—the equivalent of four weeks’ statutory sick pay. The imposition of these excessive charges is forcing hundreds of thousands of individuals into a spiralling cycle of debt and poverty.
We protect individuals against unfair business practices by regulating consumer contracts. The regulations on unfair terms in consumer contracts provide protection for consumers against excessive charges. They allow the court to declare charges as unenforceable if a contractual term requires a consumer to pay a disproportionately high sum in compensation for failing to do something.
There are two major weaknesses with the protection afforded by these regulations.
They are reactive, in that they require individuals to opt in. That means taking a court action, and even then it could take months or years to obtain protection. In the meantime, people continue to suffer from the unfair charges—in addition to which, we know that many people, particularly frail or elderly constituents, will be reluctant to take court proceedings. Why should they have to do so?


Secondly and more worryingly, powerful financial institutions appear able to evade consumer law protections. In 2006, the British Bankers Association claimed bank charges were fair because it really did cost £39 to send a computer-generated letter. That justification was dropped a year or so later when banking whistleblowers revealed that the true cost of these charges was between £1 and £2.
More recently, most UK banks have altered their terms and conditions to avoid the common law prohibitions on penalty charges, as well as arguing that default charges were truly fees for requesting an informal overdraft—an “overdraft” which would generally be automatically declined.
In July 2007, the Office of Fair Trading launched its bank charges test case, with the full co-operation of the major high street banks. While this case has progressed, the banks have continued to impose excessive charges on customers. At the same time, most customers are being prevented from seeking a refund of unfair charges pending the outcome of the test case. Clearly, this position suits the banks well, and it is hardly surprising that even though they have lost the preliminary rounds of this case before the High Court and the Court of Appeal, they are now pursuing a further appeal to the House of Lords.
While it is for the courts to decide whether the banks are right or wrong in terms of the existing law, I believe there is now an overwhelming case for providing UK consumers with better legal protection in this area. The Bill would overcome current statutory law inadequacies and would require any default charge or fee in a consumer contract to be proportionate and fair. This safeguard would provide protection for all consumers throughout the UK.
Protection would apply to any contract currently regulated by the Consumer Credit Act 1974, or any contract where one of the parties was a consumer. A consumer is defined as any “natural person” who enters into a contract

• “outside his or her trade, business or profession”.

Also included would be contracts for banking services regulated under the 1974 Act.
Clause 1 of my Bill would make it unlawful for a business to impose a charge, fee, or series of charges and fees for a consumer’s failed or unauthorised transaction unless those charges were valued at no more than 2.5 per cent. of the transaction. That would ensure that the value of charges was always proportionate to the value of the unauthorised or failed transaction.
Returning to my example of a constituent with four bounced direct debits, if the total value of those debits was £400 the maximum overall charge would be reduced to £10 under my Bill. Whereas most companies would impose £25 for unpaid direct debit charges—resulting in an additional £100 of charges—the maximum that could be levied under my Bill would again be £10. So, the charges under my Bill would be no more than £20, which can be set against the excessive £284 that would be imposed under the current system.
I believe this proposal to be both fair and proportionate, having regard to the fact that most businesses have efficient computerised credit control systems whereby standard letters, e-mails or automated telephone calls will typically cost around £1 or less to produce and dispatch. The present system of charging is, I believe,
29 Apr 2009 : Column 889
indefensible in terms of the effects it is having on our society, particularly on its poorest and most vulnerable members, especially in the current economic climate. The system simply pushes people into unnecessary financial hardship and exposes countless households to eviction and repossession.
I hope that hon. Members will support my Bill to protect vulnerable people from excessive and unfair charges. I am pleased to say that the Bill commands support from hon. Members from all the main political parties in this House.
Question put and agreed to.
Ordered,
That Mr. Mohammad Sarwar, Mr. Jim Devine, Mr. Jim McGovern, Willie Rennie, Mr. Tom Harris, Mr. Virendra Sharma, Mr. Ian Davidson, Lindsay Roy, Mark Fisher, Jim Sheridan, Mr. Charles Walker and Ms Dari Taylor present the Bill.
Mr. Mohammad Sarwar accordingly presented the Bill.
Bill read the First time; to be read a Second time on Friday 16 October and to be printed (Bill 89).

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

Bill read the First time; to be read a Second time on Friday 16 October and to be printed (Bill 89).

This didnt happen ?

[natweststaffmember]

Re: Govan Law/Mohammed Sawar - excessive charges bill

[/i]This didnt happen ?

Bills and Legislation - Prevention of Excessive Charges Bill


This Bill was presented to Parliament on 29 April. This is known as First Reading and there was no debate on the Bill at this stage.
This Bill was on the Order Paper for a Second Reading on several Fridays before being dropped by its sponsor, Mohammad Sarwar.

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

Good good.

Thanks Nats I guessed it might have been ditched but couldnt find anything

[EXC]

Re: Govan Law/Mohammed Sawar - excessive charges bill

.
This Bill was on the Order Paper for a Second Reading on several Fridays before being dropped by its sponsor, Mohammad Sarwar.

My guess is that Sarwar realised he was being led up the garden path by a dubious Scottish 'solicitor' of questionable integrity.

[natweststaffmember]

Re: Govan Law/Mohammed Sawar - excessive charges bill

My guess is that Sarwar realised he was being led up the garden path by a dubious Scottish 'solicitor' of questionable integrity.

I have asked him for the "official reason" so I await with interest his response.

[charitynjw]

Re: Govan Law/Mohammed Sawar - excessive charges bill

Spooky!

NWSM post #26 - 14:46hrs
Amethyst's response #27 - 14:43hrs

Be afraid, banks; be very afraid!!

cnjw

[Amethyst]

Re: Govan Law/Mohammed Sawar - excessive charges bill

ooo errrrr twlight zone

(looks okay now actually might have been a time glitch in the clusters or something)

[ROBSTER]

Re: Govan Law/Mohammed Sawar - excessive charges bill

Halloween


(oops sorry i thought I'd strayed onto the 5000 post thread after the last comments!) LOL