OFT WIN

[argentarius]

Re: OFT WIN

righty - I think you are being harsh on (particularly) Amethyst. Nobody said that using the POCA is a great arrangement. It obviously provides very few of the benefits of a proper bank account. BUT it is a means of avoiding the risk of charges, but still providing a vehicle for benefits to be paid into, which those in financial hardship may choose to use.

We've already made the points about use of such an account leading to higher utility charges etc. That's not in dispute. But you can't have everything in life.

I've also referred to other basic bank accounts offering much of the benefit of a POCA but with the added facility of paying by DD. But, if you want the benefit of being able to pay by DD, you inherently bring the risk of going overdrawn and incurring charges.

EXC - I wasn't passing a value judgement. I was simply being realistic. Anybody who thinks that the outcome of the anti-bank charges campaign is going to be a world where there are no (or very low) bank charges is being very naive. At the end of the day, there is very little to prevent any supplier charging the price they wish to for a product or service. All UTCCR etc. do is to fiddle around at the edges. And that's quite right, because there's nothing inherently unfair about a bank account which charges (say) £500 a year any more than there's anything inherently unfair about a trolleyful of shopping at a supermarket costing £100.

So, the anti-bank charges campaign may achieve refunds for some (or many) people relating to past charges - indeed, it already has. And it may result in a redistribution of bank charges between bank users - indeed, it already has for some banks who have changed their charging structures quite materially. But I don't believe it will necessarily result, in the long term, in a reduction in the total level of bank charges incurred.

scottishlass - I don't quite understand how you think banks could have been prevented from changing their Ts & Cs. Any supplier of an ongoing service can change their terms when they like, after giving appropriate notice to the other party and giving them the opportunity to reject the change (by closing the account, in this case). The fact that the Ts & Cs were under legal challenge doesn't affect their ability to change them. I think the point is, more, that just reviewing and ruling on the latest Ts & Cs was less than helpful.

[scottishlass]

Re: OFT WIN

scottishlass - I don't quite understand how you think banks could have been prevented from changing their Ts & Cs. Any supplier of an ongoing service can change their terms when they like, after giving appropriate notice to the other party and giving them the opportunity to reject the change (by closing the account, in this case). The fact that the Ts & Cs were under legal challenge doesn't affect their ability to change them. I think the point is, more, that just reviewing and ruling on the latest Ts & Cs was less than helpful.


That's the problem Argentarius I don't understand, I thought if they were under investigation they wouldn't be allowed to change them. Thanks for clearing that up for me, as I said it takes me a little longer than most to grasp what is going on, I am not the cleverest person but I do try.
And as most of the claims are under the old Ts & Cs why were they not ruled on first, as the new ones have only been out for a very short period of time.

[EXC]

Re: OFT WIN

EXC - I wasn't passing a value judgement. I was simply being realistic. Anybody who thinks that the outcome of the anti-bank charges campaign is going to be a world where there are no (or very low) bank charges is being very naive. .

That's was not my point, not my view and as far as I'm aware not the view of anyone on the forum. I'd be grateful if you wouldn't accuse me or my collegues of naivety, based on an incorrect assumption.

[scoobydoo]

Re: OFT WIN

[quote=argentarius;59077].

"EXC - I wasn't passing a value judgement. I was simply being realistic. Anybody who thinks that the outcome of the anti-bank charges campaign is going to be a world where there are no (or very low) bank charges is being very naive. At the end of the day, there is very little to prevent any supplier charging the price they wish to for a product or service. All UTCCR etc. do is to fiddle around at the edges. And that's quite right, because there's nothing inherently unfair about a bank account which charges (say) £500 a year any more than there's anything inherently unfair about a trolleyful of shopping at a supermarket costing £100."


not exactly true- what about price fixing cartels?
And why have credit card charges been capped then?

[scoobydoo]

Re: OFT WIN

"The judge also noted that for most of the banks, the amount of their PICs and UICs were identical or at least very similar. (paid item charges and unpaid item charges)"

A quote from bbc report today.

interesting

[Amethyst]

Re: OFT WIN

They would be wouldn't they? They are the same thing - only so many ways you can describe them lol.

DOhhhhhhhhhhhhhh my brains so gone to sleep just ignore me and wake me up when its over !

[tomterm8]

Re: OFT WIN

i don't personally object to usage based charges (banks must be able to make money, or there will be no banks), my main objection is that the current system tends to penalise the poorest people in society, and make people who (in some cases) hardly afford to feed their children subsidise other bank users. To me, it is quite simply a moral issue.

Personally, i find the irish solution of charge for use banking fair.

[argentarius]

Re: OFT WIN

Anybody who thinks that the outcome of the anti-bank charges campaign is going to be a world where there are no (or very low) bank charges is being very naive.

That's was not my point, not my view and as far as I'm aware not the view of anyone on the forum. I'd be grateful if you wouldn't accuse me or my collegues of naivety, based on an incorrect assumption.

I didn't accuse anyone on this forum of anything, least of all yourself, EXC. But clearly there are people (very many people, in fact) in less erudite forums who do have the naive belief I refer to.

not exactly true- what about price fixing cartels?
And why have credit card charges been capped then?

I don't believe that the banks are part of a price-fixing cartel with regard to bank charges for unauthorised overdrafts and the like.

And the credit card charges have been capped, haven't they, because the OFT felt like doing so. There is no legal judgement on which the £12 cap is based - it is merely the OFT's view of what is a reasonable charge.

This article: Credit card companies still raking it in despite 12 charges cap | Money | The Guardian is interesting reading given the views I've stated about the "unfair" bank charges cases not eventually costing the banks anything with regard to future charges.

One might suggest that the banks have not bothered to legally challenge the £12 cap on credit card charges because they have recouped the money by other means. As they will presumably do following any curtailment of their present ability to charge for unauthorised overdrafts.

[Kafka]

Re: OFT WIN

I don't believe that the banks are part of a price-fixing cartel with regard to bank charges for unauthorised overdrafts and the like.

Surely a cartel is where a group of similar companies join together to control prices and limit competition, for collective gain. This is exactly what the banks have done for years by following each other in raising their penalty charges. I can remember when credit cards went from 12 per item to 15, then 20, with Citibank taking a lead at 25. These jumps were generally done at different times but often by the same amounts, not governed by anything other than what they could get away with and what someone else was charging. The 'Ethical Bank' (Co-op) and the mutuals like Nationwide could have risen above all this and displayed more integrity, yet they have been no different in their infinite greed and the treatment of their customers than the other banks.
The idea of this is to keep an even keel, where the consumer has nowhere to turn where the charges are fairer or more realistic. Interestingly, whilst banks put PCA charges up to 39 in some cases, noone has seemed willing to be the first to exceed the 40 limit, despite the claims that the charges represent ever-increasing costs.
If this isn't a cartel what is it?

And the credit card charges have been capped, haven't they, because the OFT felt like doing so. There is no legal judgement on which the £12 cap is based - it is merely the OFT's view of what is a reasonable charge.

Only someone from the banking industry would have the chutzpah to say this. The OFT said no such thing. They asked the banks (as I recall without checking detail) to consider what was a fair charge, whilst setting the limit for action at 12. The banks, of course, did nothing for fairness but have continued to charge this because they know they can get away with it. Egg have even charged 16 and gotten away with it because the regulators are so unwilling to enforce anything and the banks know this.
I have it in writing from one CC company in response to a claim that the OFT said 12 was a fair price. A blatant lie, yet they paid up in full because they could not defend the charge.

[Amethyst]

Re: OFT WIN

Isn't price fixing cartels where companies get together and decide upon a price of something and agree to keep to that price, as opposed to following what others in the same market are doing ?


And re the £12 - there isnt a legal judgement that its fair - its the OFTs view of what is reasonable based on their report findings - and its a level at which the OFT may intervene if its over, as they have done previously. It is still open for a court to decide on the true level that the fee should be hence reclaims going ahead because it isnt a legal judgement.

[Kafka]

Re: OFT WIN

And re the £12 - there isnt a legal judgement that its fair - its the OFTs view of what is reasonable based on their report findings - and its a level at which the OFT may intervene if its over, as they have done previously. It is still open for a court to decide on the true level that the fee should be hence reclaims going ahead because it isnt a legal judgement.

Some quotes below from the OFT guidance of 2006
The Office of Fair Trading: Current credit card default charges unfair

I don't see here anything that suggests they think £12 is reasonable at all.
They seem to be saying that only legitimate and actual costs should be recovered, which is, of course, the legal position and the basis upon which the banks pay up when challenged. One of the great mysteries is why they settled on a figure of £12 when this patently bears no relationship to reality. As I recall, all efforts to identify why they set the enforcement threshold so high have been stonewalled. Despite a multi-million pound investigation into this, the figure was evidently plucked out of the air to give the appearance of supporting the consumer (as it does) whilst not seriously tackling the banks.

The lack of bottle by the OFT in 2006 was a costly error. Recognising that the OFT was allowing them so much freedom to carry on overcharging, all CC providers (I think) have still applied the £12 with noone as far as I'm aware taking any notice of setting fair charges. The 'read across' to other accounts has also been ignored, resulting in the current mess with the test case. You can only wonder what would have happened if the OFT had shown any spine in 2006 that it meant business to enforce fairness for the consumer as well as the legal position. It might also have negated the need for consumers to take on their own mass litigation to recover charges, because the regulators failed to act effectively (when they had finally recognised the problem) and there was no other option.

The OFT now expects all credit card issuers to recalculate their default charges in line with the principles set out in a statement published today and to take urgent action where needed to reduce the level of credit card default fees. The industry has until 31 May to respond to the statement. These principles also apply to default charges in other consumer contracts such as those for bank overdrafts, store cards and mortgages.
Where credit card default charges are set at more than £12, the OFT will presume that they are unfair, and is likely to challenge the charge unless there are limited, exceptional business factors in play. A default charge is not fair simply because it is below £12. Setting a threshold for intervention is a pragmatic pro-consumer action that is designed to give the industry the opportunity to change its practice without litigation. It is supported by detailed guidance to the industry as to how to reduce the likelihood of public enforcement (see note 2).
A default charge should only be used to recover certain limited administrative costs. These may include postage and stationery costs and staff costs and also a proportionate share of the costs of maintaining premises and IT systems necessary to deal with defaults (see note 3). Exceptional business factors which may affect the level of a fair charge may include policies to prevent casual defaults as operated by issuers such as Egg (see note 4).

3. A fair default charge should not exceed a reasonable estimate of certain limited administrative costs which the credit card issuer reasonably expects to incur as a result of default.
4. The OFT is not proposing that default fees should be equivalent to the threshold, and a court will certainly not consider that a default fee is fair just because it is below the threshold.

[EXC]

Re: OFT WIN

I didn't accuse anyone on this forum of anything, least of all yourself, EXC. But clearly there are people (very many people, in fact) in less erudite forums who do have the naive belief I refer to..

You made the accusation while directly addressing me. If the accusation was not relevant to me or anyone else on this forum, then why make it?

What kind of a jerk do you take me for?

[EXC]

Re: OFT WIN

Stephen Hone does make a good point in that the historical T&C's which are the subject of waived and stayed cases were not addressed in the judgment and therefore shouldn't have been put on hold.

The Judgment

Okay after reading the judgment it is clear the are a number of point that need to be addressed.


1. in my opinion one of the most important is the fact Mr Justice Andrew Smith
Did not consider the so-called “basic” accounts, which he states offer a more limited range of services than conventional current accounts and upon which Banks do not allow customers to arrange an overdraft facility.

Clearly these account need to be assessed even more that the “normal” accounts. If the banks do not (my emphasis added) allow their customers to arrange an overdraft yet customer can and do go into “unauthorised” overdrafts then clearly this is a breach of contract, therefore I would submit that this situation clearly supports the penalty argument as well as the Unfair Terms Argument.

2. The next failing in my opinion was that Mr Justice Andrew Smith was only concerned with Relevant Terms and Relevant Charges in the Banks’ due to a Litigation Agreement and for case management reasons, his judgment only really focused on the banks current terms.

Whilst I can see the problems of considering all the historical terms, nonetheless this exercise has to be undertaken in any event. There are a large number of cases held on stays which clearly rely on historical terms.

Therefore one must ask the question on what grounds were these claims stayed, If the very terms they rely on were not to be assessed in the test case. This is an Issue members may wish to address with the local MP and their local county court and or the FSA.

3. Business claims, in my opinion this judgment has caused an end to business claims which are using the Bank new terms and conditions. This is because the Mr Justice Andrew Smith finding on the service argument and his decision that there is no breach of contract.

However is must be noted that the Judgment was based only on Consumer contract and not Business contracts. Nevertheless we have to be realistic and I can see a court following Mr Justice Andrew Smith reasoning’s and applying the same principle to business contracts. (Subject to the terms of the contract) therefore my advise to business claims is, if your claims above 5K don’t issue a claim just yet. Claims below 5k are in the small claims track and as you all know there is generally no award for costs.

Additionally one comment did catch my eye Mr Justice Andrew Smith said “As far as Lloyd's TSB is concerned, there is (perhaps understandably in view of the issues raised in the pleadings) no evidence before me whether it had any contractual power to introduce changes to its contracts with its existing customers”

Clearly Lloyd's TSB customer need to look in to this issue in detail if you have copies of your old contracts check to see if Lloyd's did in fact have the contractual power to change its contracts.


Now we have to wait on the OFT, but even when and if the OFT recommends a lower bank changes level they probably "in fact I can almost guarantee" that they wont force the banks to refund the six years so it will be down to thousands of consumers to do what they were doing right form the start “FILE A CLAIM”

So my verdict is that the Test case has to date played right into the hands of the banks and resulted in them have a rest bite from paying out.

Now we are left with the OFT to decided what it will do, and what is worse we may all have to wait on an Appeal

If the banks do appeal the worst thing is that an appeal still won’t cover all the historical terms and all types of banks accounts on offer. So even after all the appeals and judgments, we could still be left with thousand of consumers unsure of their legal position , An issue that needs to be addressed urgently.

[righty]

Re: OFT WIN

Stephen Hone does make a good point in that the historical T&C's which are the subject of waived and stayed cases were not addressed in the judgment and therefore shouldn't have been put on hold.

The Judgment

Okay after reading the judgment it is clear the are a number of point that need to be addressed.


1. in my opinion one of the most important is the fact Mr Justice Andrew Smith
Did not consider the so-called “basic” accounts, which he states offer a more limited range of services than conventional current accounts and upon which Banks do not allow customers to arrange an overdraft facility.

Clearly these account need to be assessed even more that the “normal” accounts. If the banks do not (my emphasis added) allow their customers to arrange an overdraft yet customer can and do go into “unauthorised” overdrafts then clearly this is a breach of contract, therefore I would submit that this situation clearly supports the penalty argument as well as the Unfair Terms Argument. I agree if there is no overdraft facility as part of the account offered there can be no such service offered therefore no charge

2. The next failing in my opinion was that Mr Justice Andrew Smith was only concerned with Relevant Terms and Relevant Charges in the Banks’ due to a Litigation Agreement and for case management reasons, his judgment only really focused on the banks current terms.

Whilst I can see the problems of considering all the historical terms, nonetheless this exercise has to be undertaken in any event. There are a large number of cases held on stays which clearly rely on historical terms.

Therefore one must ask the question on what grounds were these claims stayed, If the very terms they rely on were not to be assessed in the test case. This is an Issue members may wish to address with the local MP and their local county court and or the FSA.

3. Business claims, in my opinion this judgment has caused an end to business claims which are using the Bank new terms and conditions. This is because the Mr Justice Andrew Smith finding on the service argument and his decision that there is no breach of contract.

However is must be noted that the Judgment was based only on Consumer contract and not Business contracts. Nevertheless we have to be realistic and I can see a court following Mr Justice Andrew Smith reasoning’s and applying the same principle to business contracts. (Subject to the terms of the contract) therefore my advise to business claims is, if your claims above 5K don’t issue a claim just yet. Claims below 5k are in the small claims track and as you all know there is generally no award for costs.

Additionally one comment did catch my eye Mr Justice Andrew Smith said “As far as Lloyd's TSB is concerned, there is (perhaps understandably in view of the issues raised in the pleadings) no evidence before me whether it had any contractual power to introduce changes to its contracts with its existing customers”

Clearly Lloyd's TSB customer need to look in to this issue in detail if you have copies of your old contracts check to see if Lloyd's did in fact have the contractual power to change its contracts. I spotted this & my further thought is perhaps the other banks changing of their T's & C's can still, despite what Mr Justice Smith states, be disputed as an unfair term because it is of such a magnitude that the contract was altered considerably yet was imposed rather than negotiated


Now we have to wait on the OFT, but even when and if the OFT recommends a lower bank changes level they probably "in fact I can almost guarantee" that they wont force the banks to refund the six years so it will be down to thousands of consumers to do what they were doing right form the start “FILE A CLAIM”

So my verdict is that the Test case has to date played right into the hands of the banks and resulted in them have a rest bite from paying out.

Now we are left with the OFT to decided what it will do, and what is worse we may all have to wait on an Appeal

If the banks do appeal the worst thing is that an appeal still won’t cover all the historical terms and all types of banks accounts on offer. So even after all the appeals and judgments, we could still be left with thousand of consumers unsure of their legal position , An issue that needs to be addressed urgently.

I think the court has failed in that it didn't take into account the whole picture.

Make no mistake the civil courts, such as this, have a duty to look behind the legislation & it's consequences & to protect the ordinary citizen against the corporate bully & in this it has failed miserably.

I keep making the point. If it walks like an elephant, sounds like an elephant, looks like an elephant then it almost certainly IS an elephant therefore if it looks like a penalty charge, has the same purpose as a penalty charge, has the same affect as penalty charge then the chances are it IS a penalty charge.........even the banks used to call them penalty charges............so what's changed.....nothing

[Amethyst]

Re: OFT WIN

Just wondered any of you guys opinion on the Sale of Goods and Services Act s.15 applying to the level of charges now they are deemed a service ?