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

[PocketTheDifference]

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

If they pas it over what does that entail!?

[Centium5000]

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

The Competition Commission would investigate and report back on whether there had been anti-competitive behaviour on the part of the banks.

For more info, have a peek at the Competition Act 1998, particularly the prohibitions under Chapter I & II and look at Schedule 7 for the CC's constitution:

http://www.opsi.gov.uk/acts/acts1998..._19980041_en_1

Probably take a while to investigate though, plenty of 'behaviour' to consider...

[Amethyst]

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

].
12. Most of the banks made reference to monitoring of their costs, and sought to recover cost increases through their charges. However, as such costs tended to arise across a range of bank activities there was no direct feed through from particular cost increases to particular charges, but would be spread across the charging structure with regard to competition on these charges.

14. Several of the banks told us that they did not seek to use unauthorized overdraft charges as a source of profits, because this would alienate customers and reduce potential to build a long-term profitable relationship with a customer, including cross-sales. For example, [􀀈] said that: ‘If we simply end up charging those 10 per cent of customers who do not enjoy fee free banking in any quarter with excessive delinquency charges, on a reputational basis, that takes you nowhere ultimately.’ Thus several of the banks said that they would contact customers and seek to educate them to reduce the likelihood of them going into unauthorized overdraft again;11 this may take the form of explaining charging structures, giving advice on budgeting, or suggesting more suitable financial products such as loans.

16. [􀀈] pricing papers show that it priced with regard to the other clearers. [􀀈] the papers stated under the heading ‘competitors’, ‘Northern Bank traditionally lead the price changes and I would recommend that as in the past we follow their lead’. [􀀈]
17. [􀀈] The increased revenue calculations make no allowance for any changes in customer behaviour, ie they assume the price elasticity of demand for referral
11Northern told us that it contacted and worked with customers who had incurred unauthorized overdraft charges to help avoid the situation arising again. Similarly [􀀈].
A4(6)-21
charges is zero. It says in the context of discussing how to achieve income targets, ‘In the past we have relied on increases in the unpaid and referral item charge, this year there is a need to rely on changes in the referral item charge [􀀈].
18. [􀀈] states ‘as is always the case the biggest impact in terms of service income price increases lies in penal charges such as unpaids and referral items, and I have had little option but to concentrate on these in an attempt to achieve the [􀀈] targeted increase in income’. [􀀈]

Just a few bits I thought would be interesting regarding the current discussions.

[PocketTheDifference]

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

A pointless question right here, but if OFT won would refunds have begun yet?

[davidl]

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

Well if the oft one the banks may have pre-empted the inevitable and started refunding customers but as far as i was concerned what would of happened is the banks and oft would of gone back to court to decide what a fair charge is, so the answer to your question is no one knows but it was a possibility.

on another note does anyone know when the oft will be announcing what they are doing next?

[Amethyst]

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

Definately not before Friday.

[EXC]

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

This is the evidence that Kane was asked to provide the committee after the March session:

Uncorrected Evidence m3

[Amethyst]

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

2. Bank of Scotland and Halifax have a dedicated Money Management Team-a free service which helps customers work out how to repay debt-as well as an interactive budget calculator and 24 hour banking.

mmmm lovely people they are too, refering people to fee paying debt management companies and managed accounts with Think Banking. Not quite compliant with the banking code as was me thinks.

[natweststaffmember]

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

http://en.wikipedia.org/wiki/Talk:Of...y_National_plc
It's over

[EXC]

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

Bank job.

[thephoenix]

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

Bank charges are the norm in Canada, but at least you get a personal service in return. Would you get similar in the UK? I doubt it... all those fat cats are sooooo weighted down by their wallets they wouldn't be able to stand up straight to greet through as you walk into the bank (allegedly)

http://www.guardian.co.uk/money/blog...n-bank-charges

[PocketTheDifference]

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

:carols:

http://en.wikipedia.org/wiki/Talk:Of...y_National_plc
It's over

Whats Over? I can't get on wikipedia?!

[Amethyst]

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

Posted from MSE

I called the Abbey the day after the Supreme Court Ruling to find out the status of my case as the FSO said I wouldnt be affected as mine was a hardship case. The Abbey said all hardship cases are now on holding pending the negotiations they are having with the FSA. I called the Ombudsman back and they said that was not true so I asked them to confirm with the Abbey as I was really confused by this point! The FSO then called me back to say actually yes they had spoken to the bank and my case was 'on hold'. I asked how long this might be for and they said they didnt know and would keep me posted.

(for nattie might tie up with the Friday thing from last week )

Basically all the banks are keeping things on hold whilst talking to OFT/FSA etc until a decision is made on way forward - but it shouldnt be holding up hardship complaints

[Smasher]

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

Precisely. So either:

1. There was misrepresentation on the part of the banks that they were charging penalties as opposed to contracting to provide services, or
2. The bank were aware of our 'mistake' in thinking these were penalties but didn't correct this as it was to their benefit. Or,
3. The bank thought they were penalty charges, realised they could argue they were services and lied to the court about their intentions.

In any case, we were acting on a false, however reasonable assumption that these were related to costs rather than a service charge and therefore it wasn't part of the consideration in exchange for the contracted 'package'.

Id aver we can't then be held to pay for these 'services' under contract.

Couldn't we simplify point #1? There was misrepresentation on the part of the bank who stated that the cost of dealing with this transaction was £38. Let's examine their costs - "Ooh look, it was actually only a couple of quid!"

Should it matter if it is a service disguised as a penalty or a cross subsidy disguised as a service? It's £2 disguised as £38, a simple deceitful statement.

[Centium5000]

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

Unfortunately it does make a difference

If you've got a letter from the bank stating that 'you've been a naughty boy', 'please keep your account in good order to avoid these charges in future' or something similar then they're clearly presenting the charges to you as a penalty.

If you have letters that say 'it's to cover our costs', 'administration charge' etc. then they're implying it's a default charge - the payment is to remedy the 'breach' and should be proportionate to costs incurred.

However, absent these letters and a court accepting your mistake was still encouraged or purposely uncorrected, the bank is entitled to charge whatever it like for the service, at least under UTCCR. Regardless of costs.

Once they have the money, it's their's to do with as they wish, including the use of it to subsidise other accounts. The thing is, what they do with the money afterwards is something outside the scope of the contract with us as individuals.

On a brighter note, there's plenty of letters out there that refer to costs and ask us to keep our accounts in order. There's also a number of public statements by the banks made before they presented them as services.

Next thing to consider is what loss you've incurred as a result of the misrepresentation / mistake. What would you have done / not done if you'd known the true nature of the charges?