OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

[ROBSTER]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Not true just a predicted speech had the OFT Won.
------------------------------- merged -------------------------------
Amusing though!

[PocketTheDifference]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Ohh aye it was your post wasn't it DAMMIT!! Well put though!! (Can we all still please not vote for him) ;p

[Yoda]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Just noticed this on another site. Unfortunately, when it comes to this type of thing, I'm afraid I am totally useless. Does this mean anything? Is it useful?

Yesterday's judgement made it clear that contracts between banks and customers can be subjected to a charging structure which is not deemed as penalties for specific services, but for the all-round service of the contract. This now becomes a bit of an Achilles’ heel as these charges are now for the overall service... i.e. their delivery of the overall contract.... so they'd better jolly well deliver then.

BUT, the UTCC Regs also state that ALL contracts must be fair and equitable, i.e. all terms and conditions MUST apply to both parties. This part was the bit, I think, that Phillips hinted at... it's just now a case of will you go the next lap?

So, write a short letter to your bank:
1) asking if they agree with the Supreme Courts judgement (SC6, 2009) that charges and fees ARE applicable in the management of the contract;
2) Ask for a copy of their latest table of fees/charges for all events that your account(s) may be subject to;

When you get it, send them a recorded letter back, stating that as the laws allows for all Terms and Conditions to be individually negotiated, you are applying your own equitable terms to the contract and thus ensuring that the same rights to both parties to the contract are both met and fulfilled for future purposes.
e.g. £10 for each breach of contract, £5 for letters, etc. plus your own extras for their potential breaches e.g. actual liquidated losses for indirect consequences (e.g. they bounce a DD by error , and the payee then charges you a subsequent fee for late payment), telephone calls.

Quote something like "In light of the Supreme Court's judgment, it is only reasonable to now ensure that both parties adhere to the overall service 'package' in terms of delivery of the contract."

Quote "Office of Fair trading v Abbey National plc and Others, UKSC 6, 2009" as the precedent.

Make it clear that these will only be applied when the bank has breached the contract, made an error or fails to deal with a matter in accordance with their published timescales and the Banking Code.

Add that these terms will be applied in x days (however many days notice their own contract states - usually 30 days, sometime more).

They then have various options...
a) They might ignore you. However, keep the recorded delivery slip.
b) Write back and claim that these are agreed - hardly likely, but wonders will never cease!!
c) Write back contesting them... and that's your bingo card.

If the bank refuses to accept equitable terms, then you can write back and state that due to their refusal to accept reciprocal terms, their own terms of fee charging can only be considered one-sided and in contravention of Consumer Law. including parts of the UTCC Regs that the OFT didn't use so are not dissed by the SC judgement.

State that in consideration of their refusal, you will apply to have the term within the contract that allows for them to make charges deemed as unlawful. That you consider the contract to have been constructed since signing to have been one-sided and that you will apply to have the specific clause to be struck out and all charges made under that specific clause, since signing, to be null and void.

Then send that letter recorded giving them 14 days to respond.

After, apply to the County Count under a General N1 claim.

Even if the Court disagrees on retrospective charges... we had it in one case... they did also Order that the term should be removed unless the bank agreed to equal terms. The bank refused, so the Order was made to remove the Fees table clause. Result = no future bank charges, whatever the reason.

The Banks CANNOT have it both ways. so lets get at them with their own judgement that they like to crow about.

[PocketTheDifference]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

So Is the above advice on what to do next, Like do you suggest thats the steps we now take!?

Is there a template for this?

Cheesr Yoda!

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

No, its not recommended you take that route. It is unproven and despite asking the poster of that for evidences/case law a couple days ago I have not yet received anything. There nothing in the UTCCR about equitable terms. A contract does not have to offer equal rights on both sides. I'll post up the actual imbalance argument basis shortly.

I understand people looking for routes to take but you really do need to be patient a few days. Anyone in court has 28 days following the judgment (so basically until Christmas) to make a move with the court, IF it is deemed necessary, and the OFT should make an announcement this/next week sometime.

Whatever that announcement is, a lot of work is going on in the background to ensure claimants can move swiftly and correctly immediately afterwards if necessary and we can only ask you hang fire and trust us.

[Yoda]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

So Is the above advice on what to do next, Like do you suggest thats the steps we now take!?

Is there a template for this?

Cheesr Yoda!

Hi,

No it was just somethiong I noticed. I am not the best person for advice on this, so I posted it to see if it was any help for the higher powers on here. Obviously they have seen this already.
Thanks Amethyst.

Yoda

[Amethyst]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

hmmmm ok I was going to just post up something we prepared for the barristers preparing the documents for MSE and the other sites however was a tad long winded and complicated so will summarise (as best I can in PIL and wait for peeps to correct me)

1: the argument is no longer about the price

2: the terms which result in charges have been deemed as core terms in the contract

3:the terms, regardless of the price, create an imbalance between the parties (bank v consumer) across the entire contract

4: These imbalances are, in the main, based on the power of the bank over the consumer (being able to help themselves to money without notice / prioritising debts owed to themselves etc) and the imbalance in impact on bank vs impact on consumer - so for example a £50 misdemeanor on a bank account has very little effect on the bank, however the term imposing the charge is capable of having a massive impact on the consumer (charges on charges / unable to pay other bills (incurring charges/restriction of utilities/reposession etc) /essential living expenses / ) and that effect is disproportionate to the initial 'breach'.

4: The onus is on the banks to prove the terms are fair

5: A court MUST assess terms for fairness (ECJ ruling)


THIS IS JUST MY VERY SIMPLISTIC VIEW AND SUBJECT TO A LOT OF FURTHER DISCUSSION AND LEGAL ANALYSIS SO THE ADVICE REMAINS TO HANG FIRE FOR NOW.

The OFT of course could still decide to look/act under competition rules which is also being looked at. Or they could ask the individual consumers to take their own cases, creating a class action and thus a precedent. Or they could pick up 5(1) again from where they left off to argue 6(2) and go straight in for a declaration and injunction.

[Dexter]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Like everyone, it was with disbelief when the judgment was heard. However LB has and will always be there to support everyone, where like others we thankyou, as this judgment must have also rocked all at LB, but not dented your tireless support!

We have waited for almost 2 and a half years so an extra few weeks patience to get the battle lines drawn is a small price to pay.

Once again thankyou again for all of your contined efforts and support, which means so much to so many.

[catinahat]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

deleterious.... think it means... harmful, disadvantageous to... detrimental to... adversely affects... etc etc... in a word, aint good!!! Hope this helps. CatXXX

[Dougal16T]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

hmmmm ok I was going to just post up something we prepared for the barristers preparing the documents for MSE and the other sites however was a tad long winded and complicated so will summarise (as best I can in PIL and wait for peeps to correct me)

1: the argument is no longer about the price

2: the terms which result in charges have been deemed as core terms in the contract

3:the terms, regardless of the price, create an imbalance between the parties (bank v consumer) across the entire contract

4: These imbalances are, in the main, based on the power of the bank over the consumer (being able to help themselves to money without notice / prioritising debts owed to themselves etc) and the imbalance in impact on bank vs impact on consumer - so for example a £50 misdemeanor on a bank account has very little effect on the bank, however the term imposing the charge is capable of having a massive impact on the consumer (charges on charges / unable to pay other bills (incurring charges/restriction of utilities/reposession etc) /essential living expenses / ) and that effect is disproportionate to the initial 'breach'.

4: The onus is on the banks to prove the terms are fair

5: A court MUST assess terms for fairness (ECJ ruling)


THIS IS JUST MY VERY SIMPLISTIC VIEW AND SUBJECT TO A LOT OF FURTHER DISCUSSION AND LEGAL ANALYSIS SO THE ADVICE REMAINS TO HANG FIRE FOR NOW.

The OFT of course could still decide to look/act under competition rules which is also being looked at. Or they could ask the individual consumers to take their own cases, creating a class action and thus a precedent. Or they could pick up 5(1) again from where they left off to argue 6(2) and go straight in for a declaration and injunction.

Good evening everyone,

This is exactly in line with the CCA Regulations 2006 'Unfair relationships', where the onus of proof is on the lender to prove that an unfair relationship did not exist and NOT on the borrower to prove that one did!!

This may be where the lenders come against a problem....!!


As ever
Dougal

[EXC]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

3:the terms, regardless of the price, create an imbalance between the parties (bank v consumer) across the entire contract

Just to expand on this from Amethyst's last post, section 5(1) of UTCCR - the part of the regulations that the Supreme Court suggested might work - basically means that as OFT cannot now assess the fairness of the charges in isolation, they may be able to assess the fairness of the balance of the whole contract, due to the charges.

Section 5(1) reads as follows:

Unfair Terms
5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

Some commentators believe that the imbalance relates to the overall imbalance of the banking business model where the 20% who pay the charges subsidise the banking services of the 80% that don't.

But we believe that section 5 applies to the imbalance created within the contract between the individual consumer and individual bank and this is made clear in the hearing transcripts where the issue was discussed.

[natweststaffmember]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I want to strike a word of caution and see where we go. RBS Group in June I believe changed the notice period to 21 days after the statement date. Does that change the helping themselves bit?

[Dougal16T]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Good evening all,

I know I keep 'flogging my horse' for want of a better phrase but this I think might be a way forward or some of us - especially as the 2006 Act allows reopening of agreements which have finished!!

Extracted from OPSI website:

Consumer Credit Act 2006

Section 140B Powers of court in relation to unfair relationships

(1) An order under this section in connection with a credit agreement may do one or more of the following—
(a) require the creditor, or any associate or former associate of his, to repay (in whole or in part) any sum paid by the debtor or by a surety by virtue of the agreement or any related agreement (whether paid to the creditor, the associate or the former associate or to any other person);
(b) require the creditor, or any associate or former associate of his, to do or not to do (or to cease doing) anything specified in the order in connection with the agreement or any related agreement;
(c) reduce or discharge any sum payable by the debtor or by a surety by virtue of the agreement or any related agreement;
(d) direct the return to a surety of any property provided by him for the purposes of a security;
(e) otherwise set aside (in whole or in part) any duty imposed on the debtor or on a surety by virtue of the agreement or any related agreement;
(f) alter the terms of the agreement or of any related agreement;
(g) direct accounts to be taken, or (in Scotland) an accounting to be made, between any persons.
(2) An order under this section may be made in connection with a credit agreement only—
(a) on an application made by the debtor or by a surety;
(b) at the instance of the debtor or a surety in any proceedings in any court to which the debtor and the creditor are parties, being proceedings to enforce the agreement or any related agreement; or
(c) at the instance of the debtor or a surety in any other proceedings in any court where the amount paid or payable under the agreement or any related agreement is relevant.
(3) An order under this section may be made notwithstanding that its effect is to place on the creditor, or any associate or former associate of his, a burden in respect of an advantage enjoyed by another person.
(4) An application under subsection (2)(a) may only be made—
(a) in England and Wales, to the county court;
(b) in Scotland, to the sheriff court;
(c) in Northern Ireland, to the High Court (subject to subsection (6)).
(5) In Scotland such an application may be made in the sheriff court for the district in which the debtor or surety resides or carries on business.
(6) In Northern Ireland such an application may be made to the county court if the credit agreement is an agreement under which the creditor provides the debtor with—
(a) fixed-sum credit not exceeding £15,000; or
(b) running-account credit on which the credit limit does not exceed £15,000.
(7) Without prejudice to any provision which may be made by rules of court made in relation to county courts in Northern Ireland, such rules may provide that an application made by virtue of subsection (6) may be made in the county court for the division in which the debtor or surety resides or carries on business.
(8) A party to any proceedings mentioned in subsection (2) shall be entitled, in accordance with rules of court, to have any person who might be the subject of an order under this section made a party to the proceedings.
(9) If, in any such proceedings, the debtor or a surety alleges that the relationship between the creditor and the debtor is unfair to the debtor, it is for the creditor to prove to the contrary.

21 Interpretation of ss. 140A and 140B of the 1974 Act
After section 140B of the 1974 Act (inserted by section 20 of this Act) insert—140C Interpretation of ss. 140A and 140B
(1) In this section and in sections 140A and 140B ‘credit agreement’ means any agreement between an individual (the ‘debtor’) and any other person (the ‘creditor’) by which the creditor provides the debtor with credit of any amount.
(2) References in this section and in sections 140A and 140B to the creditor or to the debtor under a credit agreement include—
(a) references to the person to whom his rights and duties under the agreement have passed by assignment or operation of law;
(b) where two or more persons are the creditor or the debtor, references to any one or more of those persons.
(3) The definition of ‘court’ in section 189(1) does not apply for the purposes of sections 140A and 140B.
(4) References in sections 140A and 140B to an agreement related to a credit agreement (the ‘main agreement’) are references to—
(a) a credit agreement consolidated by the main agreement;
(b) a linked transaction in relation to the main agreement or to a credit agreement within paragraph (a);
(c) a security provided in relation to the main agreement, to a credit agreement within paragraph (a) or to a linked transaction within paragraph (b).
(5) In the case of a credit agreement which is not a regulated consumer credit agreement, for the purposes of subsection (4) a transaction shall be treated as being a linked transaction in relation to that agreement if it would have been such a transaction had that agreement been a regulated consumer credit agreement.
(6) For the purposes of this section and section 140B the definitions of ‘security’ and ‘surety’ in section 189(1) apply (with any appropriate changes) in relation to—
(a) a credit agreement which is not a consumer credit agreement as if it were a consumer credit agreement; and
(b) a transaction which is a linked transaction by virtue of subsection (5).
(7) For the purposes of this section a credit agreement (the ‘earlier agreement’) is consolidated by another credit agreement (the ‘later agreement’) if—
(a) the later agreement is entered into by the debtor (in whole or in part) for purposes connected with debts owed by virtue of the earlier agreement; and
(b) at any time prior to the later agreement being entered into the parties to the earlier agreement included—
(i) the debtor under the later agreement; and
(ii) the creditor under the later agreement or an associate or a former associate of his.
(8) Further, if the later agreement is itself consolidated by another credit agreement (whether by virtue of this subsection or subsection (7)), then the earlier agreement is consolidated by that other agreement as well.”
22 Further provision relating to unfair relationships

(1) After section 140C of the 1974 Act (inserted by section 21 of this Act) insert—
140D Advice and information

The advice and information published by the OFT under section 229 of the Enterprise Act 2002 shall indicate how the OFT expects sections 140A to 140C of this Act to interact with Part 8 of that Act.”
(2) In section 16 of that Act (exempt agreements) before subsection (8) insert—
“(7A) Nothing in this section affects the application of sections 140A to 140C.”
(3) Sections 137 to 140 of that Act (extortionate credit bargains) shall cease to have effect.
(4) In section 181 of that Act (power to alter monetary limits etc.)—
(a) in subsection (1) before “155(1)” insert “140B(6),”;
(b) in subsection (2) before “shall” insert “or 140B(6)”.

I am proposing to use this argument against a sub-prime mortgage lender - WATCH THIS SPACE!! :beagle:

BEST WISHES TO ALL AS ALWAYS

Dougal

[Knight_Templar]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

Ame, in relation to my last correspondance from the court they stated the 28 days following the decision...first instance...Blah blah blah. Is it incumbent on me to respond within the said 28 days? As I mentioned earlier, I am in the US and I will need to factor in delivery time.

Sorry to take up you rcollective research on an individual issue, i just don't want to lose what little hope there is left on a technicality.

Thanks.

[WendyB]

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case

I want to strike a word of caution and see where we go. RBS Group in June I believe changed the notice period to 21 days after the statement date. Does that change the helping themselves bit?

Fair point Nats and well worth bringing up, IMO. However, and this is also just my opinion, the way I see it is no matter if they give notice or not, they are still helping themselves. The only difference is that now they are telling me they are going to help themsleves to it on xxx date. I still don't have any say in the matter. Okay, I can (try to) budget for the charges becuase I know they will be taken out, but if I said "errm well actually Natwest I know you've told me when you are going to take the money but I'd really rather you didn't if you don't mind" they would still help themselves anyway.

Although I have to say in Natwest's favour that at least they have slashed the charges so it's not as bad as it used to be.