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The OFT have now confirmed in writing that they were not given any reason for the FSA's intention to introduce the waiver until after the OFT had announced the test case. A perfect example of joined-up regulation.
But hold on, what did the OFT say in their announcement of the test case on their wedsite? ''In the course of its work on the issue the OFT has liaised closely with the Financial Services Authority ''. Yeah right.
Our ref: EPIC-ENQ-E-12657
11 October 2007
Dear EXC
Freedom of Information Act 2000 (FOIA)
I write in reply of your e-mail of 18 September.
In your e-mail you request:
1. The reasons the FSA gave the OFT for the need to introduce the complaints
handling waiver on 27 July, and
2 The OFT's view on how, in practicle terms, the waiver would help to facilitate
the OFT's proceedings for a declaration on the application of the law in respect
of unauthorised overdraft charges.
We have considered your first request under the FOIA. Under the FOIA we have a duty to confirm whether we hold information requested and to supply that information, unless the FOIA provides a basis for not doing so.
I can confirm that we do not hold information that is in the scope of your request.
We understand the FSA's rationale for the waiver to be:
> Customer complaints about unauthorised overdrafts were being determined
inconsistantly owing to the legal uncertainty.
> Customer complaints and claims to FOS and the courts significantly increased
following the announcement of the OFT fact finding investigation in September
2006.
> Concerns to the extent to which firms were complying with the complaints handling rules in dealing with complaints about unauthorised overdraft charges.
> The test case is expected to give greater legal certainty, consequently enabling
complaints about charges to be handled fairly, consistantly and promptly; and
> Consumers are protected by the conditions built into the waiver.
These factors were implicit or explicit in discussions we had with the FSA focusing on the question of the test case. However FSA's reasons for the need to introduce the waiver are not set out in any document prior to 27 July that we hold.
The 'test' case was devised as the best way to ensure consistant application of the law and resolution of consumers' complaints, to resolve the overall disagreement between regulators, enforcers and consumers on the one hand and the banks on the other as to the application of the UTCCRs, and to overcome the inconsistant approaches between individual county courts. That being so it is logical to allow banks not to have to deal with complaints pending clarification of the law, by means of a waiver.
In relation to your second request, in practical terms we recognise that the waiver along with the formal agreement with the banks and the FSA has helped to mitigate the risk of a parallel consumer action being taken which could prejudice the test case.
Yours sincerely
Rob Williamson
Retail Banking
Markets & Projects
Office of Fair Trading
But hold on, what did the OFT say in their announcement of the test case on their wedsite? ''In the course of its work on the issue the OFT has liaised closely with the Financial Services Authority ''. Yeah right.
Our ref: EPIC-ENQ-E-12657
11 October 2007
Dear EXC
Freedom of Information Act 2000 (FOIA)
I write in reply of your e-mail of 18 September.
In your e-mail you request:
1. The reasons the FSA gave the OFT for the need to introduce the complaints
handling waiver on 27 July, and
2 The OFT's view on how, in practicle terms, the waiver would help to facilitate
the OFT's proceedings for a declaration on the application of the law in respect
of unauthorised overdraft charges.
We have considered your first request under the FOIA. Under the FOIA we have a duty to confirm whether we hold information requested and to supply that information, unless the FOIA provides a basis for not doing so.
I can confirm that we do not hold information that is in the scope of your request.
We understand the FSA's rationale for the waiver to be:
> Customer complaints about unauthorised overdrafts were being determined
inconsistantly owing to the legal uncertainty.
> Customer complaints and claims to FOS and the courts significantly increased
following the announcement of the OFT fact finding investigation in September
2006.
> Concerns to the extent to which firms were complying with the complaints handling rules in dealing with complaints about unauthorised overdraft charges.
> The test case is expected to give greater legal certainty, consequently enabling
complaints about charges to be handled fairly, consistantly and promptly; and
> Consumers are protected by the conditions built into the waiver.
These factors were implicit or explicit in discussions we had with the FSA focusing on the question of the test case. However FSA's reasons for the need to introduce the waiver are not set out in any document prior to 27 July that we hold.
The 'test' case was devised as the best way to ensure consistant application of the law and resolution of consumers' complaints, to resolve the overall disagreement between regulators, enforcers and consumers on the one hand and the banks on the other as to the application of the UTCCRs, and to overcome the inconsistant approaches between individual county courts. That being so it is logical to allow banks not to have to deal with complaints pending clarification of the law, by means of a waiver.
In relation to your second request, in practical terms we recognise that the waiver along with the formal agreement with the banks and the FSA has helped to mitigate the risk of a parallel consumer action being taken which could prejudice the test case.
Yours sincerely
Rob Williamson
Retail Banking
Markets & Projects
Office of Fair Trading
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