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OFT WIN

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  • Re: OFT WIN

    Originally posted by Froggy View Post
    Going back to CI + 8%, there is a precedent on bank charges I believe. Halliday v. HBOS(2007) where the claimant got charges and interest(appealed for CI) and lost. Queen's Bench appeal I believe. Sorry I have no link for the case.
    You are basically correct Froggy.

    Halliday lost the argument to be awarded the banks rate of interest by virtue of an implied mutual or reciprocal term. The Judge decided that no such term could be implied. It is also not 100% clear from the judgment what he did actually get but he certainly got his charges back plus some form of interest as HBOS complicated the overall situation by making various goodwill payments through the course of his claim.

    More recent claims for Compound interest are therefore not relying on this argument as they would be doomed to failure. There are other arguments and case law ( Sempra + others ) that may be utilised but I guess that this thread is not the place to be discussing such matters.

    Besides I will get bashed by Ame....LOL



    For info
    No implied term for compound interest on refund of bank charges
    From 1979 to 2006 Mr Halliday had a current account with HBOS ("the Bank"). From time to time
    the Bank debited this account with charges of various kinds, for example charges for exceeding his
    arranged overdraft limit. Mr Halliday contended that these charges were unlawful and issued a
    claim against the Bank in Bury St Edmunds County Court.
    Having taken a commercial view of the case, and without any admission of liability, the Bank paid
    Mr Halliday an amount of money to satisfy his claim in full. That amount included money not only in
    respect of the charges levied but also in respect of interest charged to Mr Halliday when his account
    was overdrawn. The sum also included interest, at a simple rate of 8%, on the charges and interest.
    The Bank acknowledged that this amount was higher than a court might have awarded but wished
    to avoid any argument on the issue.
    The Bank then successfully applied to strike out Mr Halliday's claim on the basis that there were no
    outstanding issues for the court to deal with. Mr Halliday was however given leave to appeal on the
    question of whether he was entitled to compound interest on the sums which had been deducted
    from his account and at a rate of 28.8%, being the rate which the Bank was entitled to charge on
    unauthorized withdrawals.
    On his appeal, Mr Halliday argued that if he was not entitled to the same rate of interest as the
    Bank then his contract with the Bank would be unfair under the Unfair Terms in Consumer
    Contracts Regulations and the Bank would not be complying with the principles of "fair dealing" as
    set out in the Banking Code and the FSA Handbook. He also argued that a term should be implied
    into his contract with the Bank that he was entitled to the same rate of interest as the Bank as a
    matter of law on the basis of the principle of "reciprocity" and in line with custom and usage of
    banker/customer contracts. He further argued that there was a policy argument for implying such a
    term, as customers on the edge of their credit limit would face higher interest rates when they
    sought to borrow money to make good deductions made by banks.
    The judge dismissed Mr Halliday's appeal. While courts may imply terms into banker/customer
    relationships this will be on the basis of necessity and/or usage or custom, not fairness. Even when
    a term is implied by law there still needs to be some "necessity" for such an implication, some "gap"
    to be filled in the contractual relations between the parties. There was no "gap" here as Mr Halliday
    had been repaid with compound interest and also had the right to claim statutory interest at 8%
    from the court, as would any other claimant. If the law was to be criticized it would be a general
    criticism of a claimant's entitlement to interest not something that could be remedied by implication
    of a term. Further it was difficult to see how it could be right to impose on a bank a rate of interest
    which the claimant had argued was punitive as against himself.
    Last edited by Budgie; 29th April 2008, 22:47:PM.

    Comment


    • Re: OFT WIN

      Originally posted by tomterm8 View Post
      statutory interest is not available for debts incurred on Consumer Credit agreements, so I am no personally convinced that there is any basis for claiming it, albeit that the claim is technically a restitutionary claim.
      Tom - sorry been thinking this one over, can you expand on it a bit pls. Ta, Ame xx
      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment


      • Re: OFT WIN

        Originally posted by Amethyst View Post
        Tom - sorry been thinking this one over, can you expand on it a bit pls. Ta, Ame xx
        Beat me too it, that was my next post LOL

        Comment


        • Re: OFT WIN

          Summary from Bob Egerton..
          http://www.bankbuster.co.uk/ofttestcaseresul.html

          Interesting theory !

          However he does overlook the fact that Historical terms and conditions for all personal accounts and both present and historical terms for basic accounts were actually included as part of the test case. It's just that the Judge hasn't yet handed down his judgment on these yet.

          He stated at the end of the test case :-

          "I have already said that the reason I felt it appropriate to deal with the current terms at this stage, and not deal with the historic terms, is because there is every indication that to some extent my findings will translate readily to a significant proportion of the historic terms, and
          that, while nothing is certain, might well lead to decisions on the historic terms being made in very short order, within a month one would certainly hope. I can't go so far as to say that necessarily they will translate to all the historic terms, and one will have to take stock as to what the residue is, how significant they are, and the residue is in terms of number of accounts and customers involved, and the management of the residue can only be considered at that stage."


          So the Judge was giving an indication that judgment wrt the historic terms and basic accounts should be handed down, he hoped, within one month of his initial judgement in respect of the present terms.

          So bearing in mind that probably all of the claims that are stayed in the County Court were relating to charges based upon historic terms you can therefore consider that NO JUDGEMENT has yet been made that affects these claims.

          We don't know what that judgement is likley to be.

          Personally I suspect that the decision with regard to UTCCR 1999 will be the same as for the present terms. I suspect that the Banks may lose the PIL argument for some historic terms. I also think that we stand a good chance of winning the penalty argument for at least some of the standard bank accounts based on historical terms and probably winning it for all of the very basic bank accounts.

          When will the Judge actually let us know his thoughts on the Historical terms, it all points to either just before or even at the case Management Conference scheduled for the 22nd May.

          One important point. The OFT had already formed it's conclusions about the Banks terms and conditions prior to the Test Case being announced in July last year. After the test case was announced most of the Banks frantically modifed their terms and conditions to try to avoid both the penalty charge arguments and the test of fairness under UTCCR 1999.
          OK, so the Banks won the penalty charge and PIL arguments for those modifed terms. But even after changing their terms they still lost the UTCRR 1999 argument.
          The OFT and the Judge are not unwise to these events and I am sure that neither party will allow a deal to be done that allows the banks to avoid future regulation on their charging regimes.

          Budgie

          Comment


          • Re: OFT WIN

            Posted this OTR.

            Wonder how long it will stay there ???

            Budgie

            http://www.consumeractiongroup.co.uk...ml#post1502317


            I found this elsewhere on the site.

            Does anyone have any views on some of the things that Bankfodder is suggesting ?

            I started to make an attempt at highlighting some sections that I thought might need a bit of work, however my higlighter pen ran out !!!

            Thought it would be interesting to discuss on this thread.

            Bank Charges at April 2008 - draft work in progress
            Published by BankFodder
            28th April 2008


            What has happened with the OFT test case?

            Until 24th April 2008, the argument against bank charges was that they were contractual penalties imposed by the bank for customer breaches. These breaches included exceeding overdraft limits or having insufficient money to support a direct debit or a cheque, etc. Where penalties exceed the actual losses suffered by the bank, they are unlawful.

            A second basis for challenging bank charges was that they were subject to the Unfair terms in Consumer Contracts Regulations 1999 and therefore they must not be unfair.

            Clearly the banks were concerned about both of these arguments as in the two years from January 2006, the Financial Times and the BBC each estimated that the banks had repaid tens of thousands of their customers well over a half a billion pounds in bank charges.


            The pressure upon the banks and upon the courts became so great that finally in August 2007 the OFT announced that it would bring a case before the High Court to find out whether the charges were in fact subject to the 1999 regulations.

            At the same time the FSA announced that it would suspend the duty of banks to investigate bank charges complaints until the test case had been decided. The Financial Ombudsman also announced that bank charges complaints would be suspended pending the test case. Finally the County Courts received a general advice that they should stay all claims for bank charges. With very few exceptions, the suspension of all cases has been complete.

            This suspension of claims was entirely predictable and from a pragmatic point of view, quite understandable. However it has been deeply unfair that the banks were permitted to continue charging and even to raise their charges in some cases.

            The OFT test case was heard in February 2008 and the judgment was finally handed down on 24th April 2008.

            The judge held that:-
            • the banks' 'delinquency' charges were subject to the test of fairness under the UTCCR and so therefore the OFT are free to investigate the charges and to decide a fair level.
            • the charges were not penalties at Common Law as we had argued from the beginning of our campaign.
            • the bank's current accounts contracts were couch in plain accessible language
            • the banks were not providing any kind of service by bouncing cheques, dealing with exceeded overdrafts, direct debits and so forth.
            Is that the end of the matter?

            No. There are likely to be appeals by the banks on the issue of whether their delinquency charges are really subject to test of unfairness as decided by the High Court.

            We expect that the High Court's decision will be confirmed by the Court of Appeal.
            It is on that basis that we give the following advice.
            Please don't forget that if the Court of Appeal decides differently then there will have to be a reappraisal of the entire situation.

            So are my charges still unlawful?

            We believe that your bank charges are still unlawful. The reason for this is that the High Court judge ruled that the charges must be fair. We have yet to understand exactly how "fairness" will be measured. However we are extremely confident that the OFT and maybe the courts will decide that the present very high level of charges is unfair.

            We all know from the revelations of the CYNthesys costing system used by the Yorkshire and Clydesdale banks that it costs no more than £2.00 to deal with a bounced cheque or bounced direct debit even when the process is conducted entirely manually.

            As it is clear that there is scarcely any manual intervention in these matters, we can be certain that the banks never spend more than a few pence (say, .50p) in dealing with each delinquency episode. As all of the banks charge at least £30 per episode ( sometimes as much as £38 ), it is obvious they are making several thousand percent profit. The normal mark-up of any High Street business is about 100%. We do not see any reason why High Street business - including the High Street banks - should be able to enjoy such a privileged level of profit, especially when it is clear from the High Court judgment that delinquency charges are not core business, that it is the poor and vulnerable who will be affected and when those charges are meant to be controlled by law.

            We are unable to say at the moment what the correct level of charge should be or what will eventually be decided. However, the OFT capped the credit card companies at a very excessive £12 and it is likely that the banks will be capped similarly. So, yes. Your charges are still unlawful.


            Can I claim my bank charges back?

            Assuming that the OFT or the courts agree that the current level of charges is unfair, then yes, you can claim them back. The charges will be invalid under the UTCCR and therefore you should be able to recover them in full.


            What is the procedure for recovering my unlawful bank charges?[font=Arial]This is not entirely clear at this point in time. What is certain is that the suspension of claims will continue until all of the issues raised by the OFT have been finally settled. This means that it is confirmed that the charges are subject to UTCCR, that the present level of charges is deemed to be unfair and that a new fairer level has been announced by the OFT. At that point, all of the suspensions will be lifted and the claims will be progressed.

            Our own informal view is that once the matter of the status of bank charges is finally settled either on appeal or by agreement, that there will have to be put in place some special scheme of repayment.
            [size=3]The numbers are so huge in terms of the numbers of people affected and the amount of money involved, that neither the banks, the courts, the FOS nor the government will want the FOS or the Courts to be besieged with claims for repayment.

            What form might an FSA repayment scheme take?We envisage that the scheme will take the form of payment on demand within a time limit agreed between the FSA and the banks. Given the size of the problem (all created by the banks) the time limit is very likely to be much longer than the current FSA approved 8 weeks for settling customer complaints. It may be as long as 3 months and maybe even 6 months.

            There is unlikely to be any provision for the payment of interest on your unlawfully seized charges.

            Other possibilities include:-
            • The FSA may agree that the banks refund merely the difference between the charges they have seized and the new capped limit.
            • The FSA may agree that banks are only required to repay charges going back 6 years - in line with the contractual limitation period under the Limitation Act 1980
            Does this mean that I shouldn't bother bringing my claim right now?Our advice is that you should bring your claim immediately. Don't wait.
            This is especially so if you have outstanding bank charges going as far back as about 6 years. It may well be that the banks will try to resist any charges claims beyond 6 years on the basis that they are subject to the 6 year limitation under the Limitation Act 1980.
            If you start your County Court claim now then you will have laid down your marker and your claim will be heard - even if it takes another year for the suspensions to be lifted.

            Alternatively you could choose to make a complaint to the Financial Ombudsman (FOS). This is a cheaper option as there are no court fees. However, it is not at all clear on what basis the Ombudsman might make decisions or whether the FOS might decide to accept a limitation period if this argument was put up by the banks. Very importantly, the FOS is unlikely to award interest on your unlawfully taken charges. The County Court will award you 8% from the day that the charges were seized from you. On the basis that the bank will be obliged to repay you your court fees as well, a County Court claim is likely to be much more profitable.


            Suppose I bring a court claim now and later on I find that I have to use an FSA repayment scheme?
            If you have started a claim in court, it is unlikely that you will be forced to abandon it and go a different route. Even if you were, the bank would be obliged to pay your court fees as your decision to bring a court claim would not have been unreasonable.


            Now that it is clear that bank charges have been unlawful what can I do about my credit reputation?

            ]
            It is clear that anyone who has negative comments or a default entered against their names with the Credit Reference Agencies (CRAs) has a good basis for complaint.
            We will be posting advice and templates to assist you with an effective course of action in respect of this.
            Please watch out for announcements and also keep an eye on this FAQ document as it is likely to be amended from time to time as the situation changes or becomes clearer.

            Comment


            • Re: OFT WIN

              I have asked some questions and have got some answers already!
              "What makes the desert beautiful is that somewhere it hides a well." - Antione de Saint Exupery

              "Always reach for the moon, if you miss you'll end up among the stars"


              Comment


              • Re: OFT WIN

                Originally posted by scoobydoo View Post
                I have asked some questions and have got some answers already!
                Bugger!

                I should have been a tad braver with my sarcasm.

                Oh well, good questions Scoobs

                Comment


                • Re: OFT WIN

                  thankfully he seems to have amended his 8% sections.



                  and hes added this

                  This is a draft FAQ which is intended to give a brief explanation of the the salient points of the recent decision in the OFT test case and to explain how the decision affects you if you have been the victim of unlawful bank charges.
                  This FAQ is not complete. Furthermore it will be amended from time-to-time. Watch out for announcements or visit this page regularly to see if it has been updated.
                  ========================= ========================= =======
                  Last edited by Amethyst; 1st May 2008, 07:21:AM.
                  #staysafestayhome

                  Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                  Received a Court Claim? Read >>>>> First Steps

                  Comment


                  • Re: OFT WIN

                    Originally posted by Amethyst View Post
                    Tom - sorry been thinking this one over, can you expand on it a bit pls. Ta, Ame xx
                    Statutory interest is payable under Late Payment of Commercial Debts (Interest) Act 1998 http://www.opsi.gov.uk/ACTS/acts1998..._19980020_en_1, but under s2(5)(b) of the act consumer credit agreements are exempted.

                    An alternative method to claim interest is under the county courts act, however, under 1991 No. 1184 (L. 12) COUNTY COURTS The County Courts (Interest on Judgment Debts) Order 1991 http://www.opsi.gov.uk/si/si1991/Uksi_19911184_en_1.htm 2(3)(a) again, Consumer Credit Agreements do not carry statutory interest.

                    the court still has some power to award interest under s69 of the county courts act, but these powers are discretionary powers and the case law suggest they should only be used in exceptional circumstances.

                    Comment


                    • Re: OFT WIN

                      I didn't think bank accounts, and thus overdrafts, were subject to CCA ?
                      #staysafestayhome

                      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                      Received a Court Claim? Read >>>>> First Steps

                      Comment


                      • Re: OFT WIN

                        Originally posted by Amethyst View Post
                        I didn't think bank accounts, and thus overdrafts, were subject to CCA ?
                        Overdrafts are generally subject to the CCA 1974 and 2006, they are however exempted agreements in terms of the requirements under part V of the 1974 act. However, they are still regulated agreements as long as the credit limit is greater than £50.

                        Nb. Bank accounts are generally regulated by the FSA. Overdrafts by the OFT.

                        Comment


                        • Re: OFT WIN

                          Okay I did think all overdrafts were exempt from the CCA 1974.

                          Which regulation states about being regulated agreements for overdrafts over £50 ?

                          Sorry just trying to understand your original point. Not trying to be a pest honestly, just trying to get things straight in my mind.
                          #staysafestayhome

                          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                          Received a Court Claim? Read >>>>> First Steps

                          Comment


                          • Re: OFT WIN

                            Originally posted by Amethyst View Post
                            Okay I did think all overdrafts were exempt from the CCA 1974.

                            Which regulation states about being regulated agreements for overdrafts over £50 ?

                            Sorry just trying to understand your original point. Not trying to be a pest honestly, just trying to get things straight in my mind.

                            The agreements that are regulated by the consumer credit act 1974 are defined in s8 of the act as:

                            8.
                            Consumer credit agreements.
                            — (1) A personal credit agreement is an agreement between an individual ( “the debtor ”) and any other person ( “the creditor ”) by which the creditor provides the debtor with credit of any amount.

                            (2) A consumer credit agreement is a personal credit agreement by which the creditor provides the debtor with credit not exceeding [F1 £15,000].

                            (3) A consumer credit agreement is a regulated agreement within the meaning of this Act if it is not an agreement (an “exempt agreement ”) specified in or under section 16.
                            (note, I quoted this from statute law, but this section has been ammended by CCA 2006 and other regs, so in fact individual includes partnerships etc and there is no real financial limit, before 2006 the actual limit was 25,000)


                            The exempted agreements are set out in s16 of the act avaiilable from http://www.statutelaw.gov.uk/content...filesize=41723

                            You will note, ovedraft does not come into these categories, but small agreement (one for under £50) does, as do interest free agreements with 4 or fewer repayments over a period of less than 1 year.


                            When people talk about "overdrafts" being exempted agreements, it is because a determination was made by the oft under s74, which i will quote

                            74.
                            Exclusion of certain agreements from Part V.
                            — (1) This Part (except section 56) does not apply to—
                            (a)
                            a non-commercial agreement, or

                            (b)
                            a debtor-creditor agreement enabling the debtor to overdraw on a current account, or

                            (c)
                            a debtor-creditor agreement to finance the making of such payments arising on, or connected with, the death of a person as may be prescribed.


                            (2) This Part (except sections 55 and 56) does not apply to a small debtor-creditor-supplier agreement for restricted-use credit.

                            [F1 (2A) In the case of an agreement to which the Consumer Protection (Cancellation of Contracts Concluded away from Business Premises) Regulations 1987 apply the reference in subsection (2) to a small agreement shall be construed as if in section 17(1)(a) and (b) “£35 ” were substituted for “£50 ”.]

                            (3) Subsection (1)(b) or (c) applies only where the Director so determines, and such a determination—
                            (a)
                            may be made subject to such conditions as the Director thinks fit, and

                            (b)
                            shall be made only if the Director is of the opinion that it is not against the interests of debtors.


                            [F2 (3A) Notwithstanding anything in subsection (3)(b) above, in relation to a debtor-creditor agreement under which the creditor is the Bank of England or a bank within the meaning of the Bankers’ Books Evidence Act 1879, the Director shall make a determination that subsection (1)(b) above applies unless he considers that it would be against the public interest to do so]

                            (4) If any term of an agreement falling within subsection [F3 (1)(c)] or (2) is expressed in writing, regulations under section 60(1) shall apply to that term (subject to section 60(3)) as if the agreement were a regulated agreement not falling within subsection [F3 (1)(c)] or (2).
                            Part V contains the requirement of the consumer credit act 1974 as to form and content of agreements. There are still requirements for overdrafts, but these amount to informing the debtor of interest rates and charges, and repayment terms without any strict format requirement or the signature of the debtor.

                            http://www.oft.gov.uk/shared_oft/rep...it/oft786a.pdf may help you, particularly points 1.3, 1.4, 1.5 on page 12.
                            Last edited by tomterm8; 30th April 2008, 18:19:PM.

                            Comment


                            • Re: OFT WIN

                              I've always understood it to be more related to the operating of an overdraft, ie default notices and the steps that need following etc.

                              But because you cannot CCA for an overdraft, most believe there is no coverage at all.

                              Comment


                              • Re: OFT WIN

                                FABULOUS. I was in the most I'm afraid. Thankyou for that Tom.
                                #staysafestayhome

                                Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                                Received a Court Claim? Read >>>>> First Steps

                                Comment

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