OFT DROP bank charges case - leaks by sky news and sarah mccarthy-fry in advance ..

[rhysjames250]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

How the hell does this get leaked, and yet we were all oblivious to the result of the Supreme Court Case.

[natweststaffmember]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

How the hell does this get leaked, and yet we were all oblivious to the result of the Supreme Court Case.

Perhaps contempt of court is a worser punishment than contempt of the OFT?

[Kafka]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

How the hell does this get leaked, and yet we were all oblivious to the result of the Supreme Court Case.

On Friday HSBC started churning out letters to say - effectively - that you could no longer reclaim charges at all. The timing might suggest to the cynic that the banks were tipped off by the OFT when they confirmed the timing of the announcement just before this.

If this is correct, then the banking world all knew last week so it would be hardly surprising that the story was released in this shoddy way.

[Dexter]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

I agree AME no one should go into the next stage lightly and ill prepared, but I think that legal arguments are only part of the battle. If we could look at post OFT I am sure we will find some unbelievable client claims submitted to the courts and FOS, stating 'i want my charges back' etc, yet I bet the banks paid out, where they could have realistically wipped the floor with most of the claims.

The question is why didn't they? personally I think it was because the banks couldn't afford a claim either in court or in the FOS being looked at and ruled upon, because the banks could have lost, and the ramifications for that could have been vast. You only need to read the banks legals in the House of Lords to realise how catastrophic that would have been.

The situation hasn't changed. Yes an area of law can not be looked at, but that in the banks eyes is not the point. They like us have seen how apharently daft the law can be (4 senior High Court judges against 5 Law Lords, how does Dizzy Rascal put it, BONKERS!). The law can act in very mysterious ways and again the banks can't allow this uncertainty.

The banks know that they have been granted a get out of jail free card with the ruling and now need to be pushed to resolve claims in the system.

No more claims will come on board now, the HOL and OFT tomorrow will put pay to that and lets face it if people haven't submitted a claim in the last 2.5 years then what have they been doing and are they worth worrying about, as they don't seem worried.

My point is that legal issues aside the campaign can be used to force the banks hand to resolve claims by causing them work and costing them money but all through their own complaints process, and without going to court until much further down the line, if necessary. The banks know this!

[natweststaffmember]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

On Friday HSBC started churning out letters to say - effectively - that you could no longer reclaim charges at all. The timing might suggest to the cynic that the banks were tipped off by the OFT when they confirmed the timing of the announcement just before this.

If this is correct, then the banking world all knew last week so it would be hardly surprising that the story was released in this shoddy way.

Kafka, the banks with all concerned groups were in talks with the OFT and FOS. The beginning of rejection letters from the FOS started as well. At the moment from what I can gather a lot of the rejections are from July 2007 so in a sense they seem to be working in a logical pattern from longest case to nearest case. Others may well have been waiting for the OFT decision itself before adding any information from them to their letters. Clearly HSBC decided not to wait that long and the FOS were rejecting non hardship cases that were stayed.

[EXC]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

Here it is

OFT to review newspaper supply code - The Office of Fair Trading



OFT announces decision and next steps on bank charges

144/09 22 December 2009
Following the Supreme Court's judgment last month, the OFT has today announced its next steps in securing changes to unarranged overdraft charges and the wider personal current account market.
The Supreme Court found that unarranged overdraft charging terms in the contracts considered are not assessable in full under the Unfair Terms in Consumer Contract Regulations 1999 ('UTCCRs').
After detailed consideration of the judgment and of the various options available to it, the OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the UTCCRs would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation.
The OFT nevertheless continues to have significant concerns about the operation of the market for personal current accounts. Despite some recent and planned improvements by banks, particularly around transparency and customer switching, it believes fundamental changes are still required for the market to work in the best interests of bank customers. Banks earn around a third of their personal current account revenues from unarranged overdraft charges that are difficult to understand, not transparent and not subject to effective consumer control.
A number of options are available to secure the changes that the OFT wants to see, ranging from voluntary action to legislative change. The OFT will now discuss these issues intensively with banks, consumer groups and other organisations, with the aim of reporting on progress by the end of March 2010.
The OFT's decision not to continue its investigation into banks' unarranged overdraft charging terms under the UTCCRs as a result of the Supreme Court judgment followed extensive consideration of the issues including discussions with consumer groups, campaigners, banks, the Government, the Financial Services Authority and Financial Ombudsman Service.
Consumers with complaints about bank charges should look at advice available from the FSA and FOS on their websites.
John Fingleton, OFT Chief Executive, said:
'The Supreme Court judgment was not the outcome we had hoped for and was disappointing for many bank customers.
'Having now considered in detail all the options available to us in light of the judgment, we have decided not to continue what would be a narrow investigation with limited prospects of success.
'But we remain deeply concerned that the market for personal current accounts is not working well for consumers and does not give banks sufficient incentives to compete.
'We are committed to securing significant changes to unarranged overdraft charges going forward, whether through voluntary agreement with the banks or by other means. Customers can play their part by looking for value for money and switching accounts if necessary.'
NOTES TO EDITORS:
1. A document setting out the reasons for the OFT's decision is available here.
2. The OFT announced an investigation under the UTCCRs into the fairness of terms for unarranged overdraft charges in March 2007. It agreed to bring a test case with seven banks and one building society - Abbey National plc, Barclays Bank plc, Clydesdale Bank plc, HSBC Bank plc, Lloyds Banking Group plc (including HBOS), Royal Bank of Scotland Group plc and Nationwide Building Society - on whether the terms of unarranged overdraft charges are exempt from an assessment of fairness under the UTCCRs, with a litigation agreement requiring each side to bear their own costs. The High Court and Court of Appeal found in favour of the OFT and found that the terms did not fall within the exemption. The Supreme Court on 27 November overturned these previous judgments. For more information on the investigation see Personal banking - current accounts.
3. The OFT published its market study into Personal Current Accounts in July 2008 and published a follow-up report in October 2009. For more information see Personal banking - current accounts.
4. Consumers with complaints about bank charges should visit the FSA website and FOS website for more information.
5. On 9 December 2009, in its Pre-Budget Report, the government noted that it "will take action to deliver change if a voluntary approach does not result in a fair outcome for consumers." (p.57). HM Treasury website.

[Amethyst]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

OFT Document setting out reasons behind decision.

[borgbaiter]

Re: OFT drop case - What are the options for consumers with charges claims ?

worst possible outcome. banks now just turn up to court and wave this at the judge and its game over. Merry Christmas

[Amethyst]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

4.19 It may be more appropriate, rather than continuing an investigation, for
the OFT to intervene as a third party to give the court the benefit of its
views and experience on PIL if and when any such issues are ever
litigated privately.

GOOD

[Amethyst]

Re: OFT announcement 7am TUESDAY - leaks by sky news and sarah mccarthy-fry in advanc

This is an explanation of the PIL arguments as posted by Tools earlier in this thread

Re: OFT v Banks Judgment 25th November 2009 - 9.45am- Supreme Court - Test case
OK, this was something I was looking at over the weekend in regard to still being able to use Regulation 6(2) in certain circumstances.

Article 4(2) states:-
Quote:
2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplies in exchange, on the other, in so far as these terms are in plain intelligible language.
and is interpreted in Regulation 6 of the UTCCR 99 Regs as:-

Quote:
(2) In so far as it is in plain intelligible language, the assessment of fairness of a term shall not relate-

• (a) to the definition of the main subject matter of the contract, or
  
  (b) to the adequacy of the price or remuneration, as against the goods or services supplied in exchange.

In my opinion (limited as it may be) there may still be scope to add Reg 6 into certain claim arguments if your account was operated under one of the examples Andrew Smith J. declared to be "largely in PIL except in respect of..."

These were certain examples of
Abbey, Barclays, Clydesdale and HBOS

In Andrew Smith J. original Judgment he said...

Quote:
Conclusion about plain intelligible language
293. I therefore conclude that the terms of four of the Banks, HSBC, Lloyds TSB,
Nationwide and RBSG are in plain intelligible language. Those of Abbey, Barclays,
Clydesdale and HBOS are in plain intelligible language except in certain specific and
relatively minor respects.
294. What is the effect of my conclusions that the terms of four of the Banks are largely
but not entirely in plain intelligible language? The Banks’ position is that any
assessment of fairness should in these circumstances be restricted to “the parts of the
term” that are not plain and intelligible. The OFT’s position is that, “The term is
thereby opened, as a whole, to the full assessment of fairness”. The parties did not
fully develop their arguments at the hearing before me, the issues that are raised are
not straightforward (not least as to how a “term” is identified for the purpose of this
enquiry, given that the OFT recognises that a single contractual clause can comprise
more than one “term”) and the question is one of some general importance. If I had
held that otherwise Regulation 6(2) applied to the Bank’s terms, I would have invited
submissions as to how the positions adopted in these broad terms by the parties are to
be applied to my conclusions about the terms and in light of my conclusion about the
nature of the exemption from assessment if Regulation 6(2) does apply (see paragraph
436 below). Since in my judgment Regulation 6(2) does not in any event protect the
Banks’ terms from assessment as to fairness, it is unnecessary for me to say more
about this.
Amethyst is telling me in my ear that she remembers Abbey and HBOS did appeal these points and their permission to appeal was turned down.

In the appeal hearing it was said...

Quote:
Plain Intelligible Language
116.
Abbey and HBOS applied for permission to appeal against the judge’s order so far as it related to the issue of plain intelligible language, the judge having refused permission in relation to all his rulings on that point. The judge held that Abbey’s documents failed this test in three respects, of which only two are under challenge on appeal, and that HBOS’ documents failed in one respect. Both appellants accept that, if their main appeal fails, this aspect of the case is academic. We can therefore deal with it briefly.
117.
The judge dealt with the subject of plain intelligible language generally at [83] to [104] and [119] to [122]. Neither appellant challenges what he said in those passages. In particular, he said that the question whether terms are in plain intelligible language was to be considered from the point of view of the average consumer who is reasonably well informed and reasonably observant and circumspect: see [89]. He held that non-contractual material made available to the customer before or at the time the contract was made could and should be taken into account in deciding whether the contractual language was plain and intelligible: see [92] to [94]. He said that the standard to be achieved was whether the contractual terms put forward by the seller or supplier are sufficiently clear to enable the typical consumer to have a proper understanding of them for sensible and practical purposes: see [119]. These conclusions are not in issue on the appeals, nor are the judge’s other general
Judgment Approved by the court for handing down. OFT v Abbey National & ors
observations about plain intelligible language. It is common ground, not only that the typical customer is reasonably well-informed and reasonably observant and circumspect, but also that he or she is taken to read the relevant documents and to seek to understand the contractual terms from that reading. It is also to be noted that at [294] the judge reserved for eventual future argument, if it became necessary (as it did not on his conclusion, and as it does not on ours on the main appeal), the issue as to the effect of a failure to satisfy the plain intelligible language obligation.
118.
What is said by each of Abbey and HBOS is that the judge did not apply his own test when he came to consider their respective documents, but rather applied an incorrect, narrow and legalistic test.
119.
In each case the respect in which he held that the documents failed the test, and which is challenged on appeal, fell within the area of uncertainty as to the scope of a Relevant Charge, by way of inconsistencies or conflicts in the wording relating to the levying of the Relevant Charges: [116]. The points now at issue are as follows:
i)
He held that two of Abbey’s conditions are in conflict as to whether a Paid Item Charge is incurred when a payment instruction does not cause the account to become overdrawn (because it already is overdrawn) but increases the amount of the overdraft, and that this meant that the terms were not in plain intelligible language: see [150] to [151].
ii)
He also held that the plain intelligible language test was not met by Abbey’s terms as to whether an Instant Overdraft Monthly Fee was charged if a customer gives a Relevant Instruction during the month but payment is refused, because of a lack of clarity as to the meaning of the phrase “used the Instant Overdraft service”: see [152] to [153].
iii)
In relation to HBOS he held that there was a conflict as between the contractual terms and a non-contractual leaflet, causing uncertainty as to whether the Unarranged Overdraft Fee is charged only during the month in which the account goes into unarranged overdraft, or also during succeeding months if the account remains in that position: see [218] to [220].
120.
Even if we had not concluded that the main appeal ought to be dismissed, we would not have granted permission to appeal to Abbey or HBOS on these issues. No point of wider importance arises, given that the parties accept the correctness of what the judge said about the applicable principles. Therefore the points decided by the judge only relate to the respective banks and to their current documents. For those reasons, we do not accept the submission made on behalf of both banks that permission to appeal should be given on the ground of a compelling reason, regardless of whether there is a reasonable prospect of success on the appeal.
121.
The judge expressed his conclusions quite briefly on each point, but the points are, in their nature, apt for decision as a matter of impression and not suitable as the subject of detailed textual analysis. As to the merits of the issues, it seems to us that the judge was correct in the conclusion that he reached, for the reasons he gave, as to the conflicts within the documentation and their resultant lack of clarity to the hypothetical customer.
Judgment Approved by the court for handing down. OFT v Abbey National & ors
122.
For HBOS Mr Dicker criticised one sentence in [219] of the judgment on the basis that the judge had considered the position on the basis of only selective reading on the part of the hypothetical typical customer. Any substance that there might have been in that point is taken away by the next sentence in which the judge correctly addressed the effect of the documents as a whole.
123.
For those reasons, briefly expressed both because of the nature of the issues and also because the question is academic, we refuse permission to appeal to Abbey and HBOS on the plain intelligible language appeals.
CONCLUSION
124.
For these reasons we conclude:
i)
that an assessment of the fairness of the Relevant Charges is not precluded by regulation 6(2) of the 1999 Regulations and that the appeal must be dismissed; and
ii)
that the applications by Abbey and HBOS for permission to appeal on the basis that the judge was wrong to hold that some of their Relevant Terms imposing Relevant Charges were not in plain intelligible language should be refused.
125.
We wish to add by way of postscript that in the course of this appeal we have had the great assistance of two judicial assistants, Katherine Apps and Rebecca Wright. We would like to take this opportunity of thanking them for all their help.
Since his decision that the overall the Relevant Terms were assessable under 6(2) was overuled in the Supreme Court and decided that they were not assessable, the fact that the terms he found to be not fully in PIL should now be looked into to see if they should now be looked at under Regulation 6(2) even if it is then found there is no argument to use, I still think it should be looked at.

Also, if your account was operated under any T&C's not submitted by the OFT to the test case for consideration by the court.

We are currently compiling a list of the T&C`s that could fall into this category, but this is still a work in progress.

Thoughts anyone?

[pinknico]

Re: OFT drop case - What are the options for consumers with charges claims ?

Gutted. Would like to know how much the OFT took on board from the consumer groups discussions.

[ed.]

Re: OFT DROP bank charges case - leaks by sky news and sarah mccarthy-fry in advance

To be honest, although it loops to misrepresentation again, isn't PIL called into question (being polite I mean seriously failed) by the fact they are default charges to cover costs for almost a decade, and suddenly when we start suing them them become service fees, and now become for the whole PCA package.

What's plain or intelligable in that?

If we come up with an argument around the whole package defence, will they start calling them Mavis next?

[EXC]

Re: OFT DROP bank charges case - leaks by sky news and sarah mccarthy-fry in advance

All in all I think the announcement is more positive than Sky made out yesterday.

Although they've dropped UTCCR they haven't ruled out other avenues. It's very positive that they'll be continuing to consult campaign groups.

[ed.]

Re: OFT DROP bank charges case - leaks by sky news and sarah mccarthy-fry in advance

It's a lot more positive, and I'm glad they spelled out exactly why (Fingleton on BBC news now) they are backing out.

Don't agree with all of it, but at least with reasons it helps us move forward.

[borgbaiter]

Re: OFT DROP bank charges case - leaks by sky news and sarah mccarthy-fry in advance

fingleton was on for 3 mins and i didnt get anything possitive off it

5.10 A further relevant factor is the risk that the OFT would be liable for costs
incurred by the Banks if it pursued an investigation and litigation that
was ultimately unsuccessful. The test case that has been conducted to
date was conducted in accordance with a litigation agreement under
which the OFT and the Banks each agreed to bear their own costs. It is
not clear that any future litigation would be covered by the same costs

arrangement.

this says it all really if the OFT cant afford it what chance has a litigant in person!!!