OFT test case- some early thoughts on their POC

[Nattie]

I know this is early but I have a few points to make and I hope others can respond to this.
There seems to be three/four issues of the test case from their POC's.
1) Whether the charges fall under the test of fairness under the UTTCR
2) charges of exceeding overdraft
3) Returned Item Fee
4) Increased overdraft Interest as a result of exceeding overdraft(not something we have said too much about).

Current t&C's as of October 1st 2007 and some historic ones as well.

[Nattie]

Re: OFT test case- some early thoughts on their POC

That was a base summary. The OFT announced test case on 26th July 2007 and NatWest changed their terms and conditions on unauthorised overdraft from Unarranged Borrowing Fee to Maintenance Charge effective from 31st August 2007. Something sounds a bit odd on this one as it sounds to me like the service argument was already in the process.

[Nattie]

Re: OFT test case- some early thoughts on their POC

I have a bias towards NatWest so apologies for this but a change of Card Misuse Fee to Guaranteed Card Payment Fee is surely where the quick fix to the T and C's initially began. (the quick fix term was referred to in internal documents). If this was a fee for a service then why change the names of charges if it were not a penalty fee rather than a service charge.

[CYNthesys]

Re: OFT test case- some early thoughts on their POC

If you read the 1st paragraph of this section NAB are clearly referring to income from penalty fees.

2004 Half Year Financial Results - Analyst Briefing Transcript - The National Australia Bank Group - NABGroup

In the light of this admission can anyone think of a way this can be used?

[Nattie]

Re: OFT test case- some early thoughts on their POC

Ok i am going to try and make this post because it is slightly controversial. The banks argument of service charge IS one that is compelling when you think about exceeding the overdraft limit. The charges being for an informal request being made for an overdraft. I agree that on this charges alone that the arguments that the banks will be making is compelling.
With regards to returning an item unpaid, I cannot say that I would agree with the service argument because it just does not add up. With regards to the Guaranteed Card Payment Fee, this one is a lot more difficult to defend because even on a credit card cash advance charge it would be unlikely that the amount charged would ever be that high.
that maybe why the outcome of the case will be difficult to call.