Day 3 - OFT Test Case

[Amethyst]

Listed as:

INTERNATIONAL DISPUTES RESOLUTION CENTRE
70, Fleet Street, London EC4Y 1EU
Before MR JUSTICE ANDREW SMITH
Monday 21 January 2008
At 10:00
For Trial
Part Heard
2007-1186 Office of Fair Trading v Abbey National PLC
Note: There will be a video link of proceedings available in Court 65 at the RCJ

[Tempty]

Re: Day 3 - OFT Test Case

i take it it's not a live feed broadcast on the net ?
but just into the holding room?

kinda hoping i'm wrong there..... would be interesting to watch!

[Tools]

Re: Day 3 - OFT Test Case

Not unless you could intercept the feed somehow Tempty

[Budgie]

Re: Day 3 - OFT Test Case

Anyone heard any news on how things are going today ?

[EXC]

Re: Day 3 - OFT Test Case

I couldn't make it up there today but I'll go again tomorrow, Wednesday & Thursday. Friday is scheduled as a day 0ff.

It's odd that it's listed to start at 10.00 today as the judge had decided on Friday to begin at 9.30 in an effort to catch up.

[EXC]

Re: Day 3 - OFT Test Case

Day 3 BBC coverage

http://news.bbc.co.uk/1/hi/business/7200486.stm

[Amethyst]

Re: Day 3 - OFT Test Case

Due to start 10.30 tmw (so far)


BBC News Item (above)

Overdraft fees 'core' to banking

By Ian Pollock
Personal finance reporter, BBC News


The court was told customers benefit from the current system

Unauthorised overdraft charges are central to the way current accounts work, the High Court has been told. Laurence Rabinowitz QC was defending the Royal Bank of Scotland, one of eight lenders accused of levying unfair overdraft charges.
The Office of Fair Trading (OFT) wants the court to rule that it can challenge the lenders' fees under consumer law.
Mr Rabinowitz said overdraft facilities are a "core" feature of accounts and therefore consumer law does not apply.
Seven banks and the Nationwide building society agreed to the test case to clarify their legal position after a mass of litigation, which has seen hundreds of thousands of consumers claim refunds totalling hundreds of millions of pounds.
'Valuable service'
The barrister told the judge hearing the case, Mr Justice Andrew Clarke, that the average Royal Bank of Scotland customer went overdrawn without permission three times a year.
He said providing such customers with unarranged credit was a "substantial and valuable service", which was central to everyday banking.
Without it, he argued, customers would not be able to draw on cheques until six days after they had been paid it to allow them to clear.
And if the possibility of unarranged borrowing did not exist, then debit card payments could not be guaranteed by banks.
Retailers would be forced to phone banks to check every transaction before allowing them to be processed.
Under current arrangements, banks will honour payments, even if they are not covered by an account holder's balance, and then charge the customer accordingly.
"What the bank is doing is processing his payment instructions and what the bank is doing is providing the customer with credit - that is indeed providing a service", said Mr Rabinowitz.
Crux
This issue is critical to the banks' defence.
They claim that their unauthorised overdraft charges are fees for a "core" part of the current account product, and not unfair penalties.


BANK REFUNDS IN 2007
Barclays - £87m
HSBC - £116m
HBOS - £79m
Lloyds TSB - £36m
RBS - £81m

Source: Bank interim results


Key court case underway at last


As a result, they disagree with the case put forward by the OFT that the charges fall foul of the regulations governing unfair terms in consumer contracts.
The OFT wants the High Court to rule that under these regulations it has the authority to decide that the charges are unfair.
Mr Rabinowitz went on to deny that the banks' current terms and conditions - some of which have been rewritten in the last few months - were a cosmetic attempt to disguise the truth.
The OFT claims the position regarding charges was more accurately reflected in historic terms and conditions.
"There has been no attempt to change the core of the contract," he said.
Consequences
The outcome of the long-awaited court case could bring a fundamental change to the UK current account market.
If the OFT argument is upheld, it could mean banks and building societies having to return billions of pounds collected from customers over the past six years.
The hearing is expected to last several weeks, longer than originally anticipated.
An initial ruling is expected around Easter.
However, whichever side loses is expected to appeal, possibly all the way to the House of Lords, meaning the issue may not be resolved until next year.

[Guest]

Re: Day 3 - OFT Test Case

Without it, he argued, customers would not be able to draw on cheques until six days after they had been paid it to allow them to clear.
And if the possibility of unarranged borrowing did not exist, then debit card payments could not be guaranteed by banks.
Retailers would be forced to phone banks to check every transaction before allowing them to be processed.

Nonsense! Ten years ago, I used RBS online banking to pay my staff. I paid money via the computer on my desk and I paid myself the same way too. On one occasion I checked my balance at the moment my wife withdrew some money and although I could not witness the transaction, I was able to see how much was withdrawn and even from which ATM - yet Mr Rabinowitz claims that " Retailers would be forced to phone banks to check every transaction before allowing them to be processed."

What a load of Pollocks!

Transactions are tracked, limits are imposed, accounts are monitored and controlled minutely and precisely. The levying of charges and the manner and frequency of the same is ruthlessly efficient and clearly designed and engineered specifically to generate as much revenue as possible for the bank at the expense of the customers balance.

[scoobydoo]

Re: Day 3 - OFT Test Case

Exactly

if you go into any shop then if there is no money in the account - the transaction will be refused. If you go to a cash machine then the withdrawal will be refused.

If you have a DD and there is no money through your own fault - then dont pay the DD ( fair enough) but charge a fair amount - With regard to cheques there is a new rule now anyway - 7 working days clearance - I will try and post the info later.


Last week a DD went out of my account for much more that I anticipated - but on the day it was due out there was a credit coming in. A&L charged me £25.00 to tell me they werent paying it - and then on the same day -they did pay it - and made another charge as well!

jan
Online sellers warned on UK cheque clearance changes

On the seventh day banks guarantee payments

By John Leyden → More by this author
Published Wednesday 28th November 2007 12:36 GMT
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Online retailers and eBay sellers are advised to keep abreast of new cheque clearance rules that come into force in the UK on 1 December, or risk a heightened threat of becoming victims of fraud.
The new 2-4-6 cheque clearance rules mean that payment by cheque is not guaranteed until the seventh working day after a cheque has been presented to a bank for payment. This means that even if a payment looks to have cleared an account on day 4, the money is not safe until close of business on day six.

So anyone accepting payment for goods by cheque should hold off dispatching merchandise until seven working days after a cheque has been presented for payment, unless the payment has first been screened by a reputable fraud screening service or secured by a cheque guarantee card.
The new rules are of particular relevance to goods sold on auction sites and purchased by cheque.
Anti-fraud experts welcomed the changes as a clarification of the sometimes complicated cheque clearance process, even though it may lead to an increase in dispatch times where cheques are used as a payment method.
"The new 2-4-6 rules give a guarantee that on day seven a retailer or member of the public can dispatch goods with the certainty that the money is cleared funds in their bank account, and can not be clawed back unless the payee is a knowing party to fraud," said Andrew Goodwill, director of anti-fraud service 3rd Man. "I await the day when we receive this type of guarantee for credit card payments," he added. ®
26 comments posted — Comment period finished

[Nattie]

Re: Day 3 - OFT Test Case

Scoobydo, have already posted clearing cycle already on the forum and will give the link shortly to it

EDIT: the link
http://www.legalbeagles.info/forums/...ead.php?t=3306

[scoobydoo]

Re: Day 3 - OFT Test Case

Mr Rabinowitz went on to deny that the banks' current terms and conditions - some of which have been rewritten in the last few months - were a cosmetic attempt to disguise the truth.


Who was the clever person who accused them of this?:okay:

nice wording.

Also Dont you all think we are bombarded with small print /terms /conditions on everything now. To be honest I think that even the paperwork involved in applying for say a mortgage now is beyond a vast majority of people. I sometimes have to act as an unofficial interpreter to work colleagues as the different types of mortgage / rates/APR / penalties etc are beyond them. If I as an ex BS employee struggle sometimes, then surely others must do. Is there really any need for all the complicated wording on bank accounts or loans? Or is it just a smokescreen so the majority dont read any of it?

My recoomendations would be Simpler wording on contracts - and compulsory lessons on interest rates borrowing etc. in school. With talks from some of those who have suffered badly from decisions made from ignorance or just bad advice - and also talks from the banks as well

jan

[Nattie]

Re: Day 3 - OFT Test Case

Scoobydo, the wording that was used internally within NatWest was "quick fix" so maybe semantics we are playing.

[TANZARELLI]

Re: Day 3 - OFT Test Case

Did anyone know if EXC was able to make it today? No worries if he couldn't as it msut be costing him to get there.

There's an idea, perhaps it would be good to set up a thread for donations towards his expenses etc, such as parking or transport, refreshments etc. I would be happy to chip in next week when I get paid as he's doing a fantastic job in setting the scene for those of us not able to make it.

Tanz

[Budgie]

Re: Day 3 - OFT Test Case

Very good idea Tanzarelli.

Don't know about anyone else but I've missed his reports the last couple of days. I know he plans to be there tomorrow.

Budgie

[Tools]

Re: Day 3 - OFT Test Case

DIARY of the OFT Test Case - as it happens - EXC