OFT WIN

[Budgie]

A quick update, more to follwo later from Ame

Banks basically win penalty charge aspect argument, HOWEVER

With regards to the 1999 regulations : I conclude that of the terms now generally used by the Banks for personal current accounts other than basic accounts those of HSBC, Lloyds, TSB, Nationwide and RBS are in PIL and Abbey Barclays Clydesdale and HBOS are largely in PIL

However I reject the Banks contention that the relevant terms are exempt from assessment under regulation 6.2 of the 1999 regulations. This does not mean that the relevant terms are necessarily to be regarded as unfair under regulation 5.1 or that they are not binding upon consumers under regualtion 8.1.

[stevokenevo]

Re: OFT WIN

woohoo

[righty]

Re: OFT WIN

If correct that’s one step forward & two steps back

According to the above he's decided the OFT can rely on the UCCTC whilst at the same time stating that that doesn't mean the penalty charges are unlawful

This if correct is of course true because this case was never about their lawfulness it was always about the power of the OFT.

Now the question is what will they do with their new found power? Rule the same as they did with credit cards whilst saying their decision wasn't binding in law as only a court could decide if the fees are unlawful

It would appear that we are back to square one & that after all this delay little has been achieved other than that the banks have been allowed to stop refunding charges & to add insult to injury continue applying said charges to customers account

So whilst the banks may be forced to reduce their charges by the OFT, as some have already done, (whilst jacking up others) the consumer will still have to chase, threaten & possibly litigate to recover their money.

This all assumes of course that the banks don’t appeal which will delay things even longer

I do hope I'm wrong

[argentarius]

Re: OFT WIN

I'd be amazed if the banks don't appeal.

I'm not sure I agree with righty that "the case was never about their lawfulness". Much of the discussion of the case was centred on precisely that. And Martin Lewis has been on TV just now saying that the banks should refund automatically precisely because the charges were unlawful - even though that is not what the judgement said.

In reality, the OFT (and the anti-charging lobby) have lost a major plank of their case - that the charges are penalties. That is a bigger fact than anyone seems to be noticing thus far in the public commentary on the ruling.

Edit: I should also be clear that the banks have also lost a major plan of their case - this is very much an "in between" decision with no clear victor.

It is hard to see why, if this ruling stands unaltered, the OFT would behave any differently than in the credit card case, and therefore I think righty's analysis in this regard is correct - individuals will still have to litigate etc. to recover past charges, but future charges will be charged in line with the laid-down regime.

[RedCardPete]

Re: OFT WIN

I don't quite agree with Righty.

i think this is a major step forward. By confirming the Regs apply, he's given all we wanted. Interpreting the Regs is quite starightforward and if they apply, I'm happy that the charges are unlawful.

As for OFT invetsigation, I don't think that will cause any problems. Look what happened on credit card cases: OFT said £12 OK but none of the credit card companies will fight if you go for a full refund of charges rather than just the excess over £12

[stevokenevo]

Re: OFT WIN

I agree with pete, and i agree with argy's last para, i think it is the best result we could have hoped for!

[ed.]

Re: OFT WIN

Being fair the OFT removed the penalty aspect when they amended POC, and then slightly reintoruced it.

I have vague memories of Brian Doctor saying talking about whether they were penalties or not was irrelevant because the OFT weren't asking for a Judgment on that - that said it might have been in the RTD and it's my head.

But the inclusion of the penalty ruling wasn't straight forward.

Equally, taking Nationwide as an example who said 'breach of contract' in their terms that was pointed out (Day 6 was it) how can he find them not penalties. Let alone HSBC and Abbey who used admin defence for consumers but switched to service fee for test case.

Will be interesting to see how this unfolds.

[Jelly]

Re: OFT WIN

IMO, this will lead to people reclaiming their charges as they did prior to the stay, but will mean the banks do not automatically have to issue refunds to everyone who does not apply.

A victory, perhaps, for those of us confident enough to do this and a defeat for those who are not.

[enaid]

Re: OFT WIN

Well me being a bit slow and all, I would like to ask the experts a question please.
If now we have this decision, will the next stage not be one where the banks have to disclose how the charges are made up?

[righty]

Re: OFT WIN

Hi red

I would really love to say consumers have won hands down but IMHO they have not

Also I'm not sure you see my point. Even the charges imposed on the CCC have never been binding in law. It was the threat by the OFT to take them to court that caused some but not all to reduce their charges. The same will apply to any decision the OFT might make in relation to bank charges

Also I very much doubt the banks will accept this Judgment as it effectively gives the OFT the power to regulate prices. A function it was never envisaged would be part of the OFT's remit

[righty]

Re: OFT WIN

argen that's what I have always said.......the case was never about there lawfulness but about the power of the OFT which frankly I think this judgement has exceeded as I remark in my previous post & because of this may well be struck down at any appeal

[ed.]

Re: OFT WIN

He limits lack of penalty angle to new T&C's.

No comment on historical T&C's in that regard so as things stand we haven't lost the common law (yet).

I thought all of this would head towards another £12 cap anyway and dno't see that changing yet either but depends on how picky the banks try and be now.

[righty]

Re: OFT WIN

He limits lack of penalty angle to new T&C's.

No comment on historical T&C's in that regard so as things stand we haven't lost the common law (yet).

I thought all of this would head towards another £12 cap anyway and dno't see that changing yet either but depends on how picky the banks try and be now.

In other words................no change............except that the OFT's powers have been strenghend......................for now

[ed.]

Re: OFT WIN

That's my reading so far Righty.

Makes sense, all the banks have changed their T&C's so you would expect the new ones to at least remove the common law penalty angle lol

So change on cause of action, OFT's powers strengthened maybe - I'm still seeing voluntary agreement though. Having lose this element, the banks will want to curry some favour and £12 is better than nothing.

[argentarius]

Re: OFT WIN

enaid - if it comes down to the OFT deciding, after interrogating the banks "off line", what a "fair" charge is, then I don't expect anything regarding the banks' costs to be publicly disclosed. AFAIK there has been no such public disclosure with regard to credit card charges.

ed. - of course you are correct that the ruling was on current Ts & Cs and the wording of earlier Ts & Cs was significantly more dubious with regard to the penalty issue. It's interesting that the ruling was so black and white on this issue, though - the judge didn't suggest that there was any question about any of the many different *current* Ts & Cs in this regard.