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Mr. Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): May I express my thanks to you, Mr. Speaker, for allowing me to raise the subject of the debate and take the opportunity to congratulate you on your election to your distinguished post?
Many of my constituents will be pleased that I am taking the opportunity to highlight what history will surely judge to be a financial injustice perpetrated by the power of some banks against individual consumers. I have countless examples in my office of constituent cases where banks have imposed unfair charges on customers whose accounts may have been only a few pounds short for a brief period.
Let me briefly sketch the background. The Office of Fair Trading launched its investigation into bank charges in April 2007. It examined the fairness of charging terms for unarranged overdrafts on personal current accounts under the Unfair Terms in Consumer Contracts Regulations 1999. In July 2007, the OFT entered into a written litigation agreement with seven banks, one building society and the Financial Services Authority, with a view to bringing a test case to ensure an orderly and efficient process for the resolution of the legal issues.
At that time, the FSA issued what is known as a waiver. Essentially, the FSA, as the regulator, was waiving the rules that specify time limits for dealing with any complaint about the level, fairness or lawfulness of unauthorised overdraft charges. The managing director of retail markets at the FSA said:
Before the test case agreement was reached and the waiver was invoked, we were in the scandalous position in 2007 where banks had paid out a staggering £784 million to approximately 378,000 customers. Rather than defend their untenable position in the courts, banks paid out when challenged. We can take it as read that some of the banks would not pay out a single penny if they did not need to.
It is important to establish my credibility on this subject by stating that I am not swimming in a tide of populist hostility towards the banks. As a matter of proof, I have in my possession a letter that I wrote to the OFT on 15 August 2007 and another one that I wrote to the FSA on 20 August 2007, along with other representations. In both letters, I questioned the tactics being deployed and the wisdom of both organisations in dealing with the vexed issue of bank charges.
Read more House of Commons Hansard Debates for 01 July 2009 (pt 0025)
Worth Reading
Quite a bit about Hardship etc (governments response is crap tho)
Mr. Tom Clarke (Coatbridge, Chryston and Bellshill) (Lab): May I express my thanks to you, Mr. Speaker, for allowing me to raise the subject of the debate and take the opportunity to congratulate you on your election to your distinguished post?
Many of my constituents will be pleased that I am taking the opportunity to highlight what history will surely judge to be a financial injustice perpetrated by the power of some banks against individual consumers. I have countless examples in my office of constituent cases where banks have imposed unfair charges on customers whose accounts may have been only a few pounds short for a brief period.
Let me briefly sketch the background. The Office of Fair Trading launched its investigation into bank charges in April 2007. It examined the fairness of charging terms for unarranged overdrafts on personal current accounts under the Unfair Terms in Consumer Contracts Regulations 1999. In July 2007, the OFT entered into a written litigation agreement with seven banks, one building society and the Financial Services Authority, with a view to bringing a test case to ensure an orderly and efficient process for the resolution of the legal issues.
At that time, the FSA issued what is known as a waiver. Essentially, the FSA, as the regulator, was waiving the rules that specify time limits for dealing with any complaint about the level, fairness or lawfulness of unauthorised overdraft charges. The managing director of retail markets at the FSA said:
- “We have granted the waiver to help facilitate this test case. We believe it is not in the interests of all consumers for complaints to continue to be dealt with in the current inconsistent way”.
Before the test case agreement was reached and the waiver was invoked, we were in the scandalous position in 2007 where banks had paid out a staggering £784 million to approximately 378,000 customers. Rather than defend their untenable position in the courts, banks paid out when challenged. We can take it as read that some of the banks would not pay out a single penny if they did not need to.
It is important to establish my credibility on this subject by stating that I am not swimming in a tide of populist hostility towards the banks. As a matter of proof, I have in my possession a letter that I wrote to the OFT on 15 August 2007 and another one that I wrote to the FSA on 20 August 2007, along with other representations. In both letters, I questioned the tactics being deployed and the wisdom of both organisations in dealing with the vexed issue of bank charges.
Read more House of Commons Hansard Debates for 01 July 2009 (pt 0025)
Worth Reading
Quite a bit about Hardship etc (governments response is crap tho)
