OFT WIN

[argentarius]

Re: OFT WIN

It dosen't define it but I'm not sure that was the point. UTCCR relates to 'unfair terms' as the name suggests. If an unfair term relates to the price of that term then the two are wedded.

(b) to the adequacy of the price or remuneration, as against the goods or services supplied in
exchange

does the case below show that you may have misunderstood or just picked out one statement in isolation?




Fairer terms for online I.T shoppers


Following discussions with the OFT, dabs.com plc (Dabs) has agreed to amend unfair terms and conditions regarding returns and refunds in its consumer contracts.
Dabs supplies computers, software and electronic goods directly to customers in the UK via its website. The company's old terms and conditions of sale contained a number of terms that the OFT considered unsuitable in a consumer contract, and that raised concerns under the Unfair Terms in Consumer Contracts Regulations (UTCCRs) and the Consumer Protection (Distance Selling) Regulations (DSRs).
The terms and conditions that the OFT wanted Dabs to amend included those that:
* excluded the company's liability for errors in the descriptions of goods,
* limited the company's liability for faulty goods sold, by making the consumer pay cost of carriage to return items,
* imposed time limits for notifying the company of defects in goods, and
* made refunds under the DSRs conditional on the return of cancelled goods.
Following discussions with the OFT, Dabs has agreed to delete or revise its unfair terms, and agreed to introduce terms that are fairer and comply with the UTCCRs and DSRs.

I don't understand either of your comments here.

@EXC - the part of UTCCR that I quoted seems to say precisely that UTCCR's power against "unfair" terms does not relate to agreement of the price or remuneration.

@scoobydoo - sorry but I don't see what your quote has to do with the point I'm making. Nothing in that quote relates to price.

I think what I'm trying to say is that it may be possible to determine under UTCCR that making a specific charge for (for example) making a payment whilst overdrawn is fair, or unfair. But I can't see how it is possible to determine under UTCCR what amount would be fair or unfair for that transaction - because that is the price of the transaction, and hence outside the scope of UTCCR.

This has been my problem all along with understanding the basis of the "anti bank charges" case. Once the penalty argument is lost - as it has been - I don't understand the UTCCR case and therefore there doesn't seem to be any case.

Do you see what I'm trying to say?

[argentarius]

Re: OFT WIN

Okay could do with a hand on understanding this bit.

372. I therefore accept the OFT’s submission that if a Bank declines to pay upon a Relevant Instruction, it supplies no, or no relevant, services by way of considering, processing or otherwise dealing with it.

DD payments that are not paid.

They are not a service. so no service fee
They are not a breach of contract. so no penalty fee nor liquidated damages.


So, okay being a bit dense today, does that mean they can charge whatever they like or they are not entitled to charge anything at all.

It reads to me that they can't charge at all. If he's saying there is no service, there can be no charge for one.

I've already suggested this - post #19.

I can't read what he's said here any other way - he seems to be stating that there is no service and hence nothing to charge for.

Frankly, it's a ridiculous interpretation of the law. The customer has chosen to have a bank account; the customer has authorised the direct debit; the customer hasn't got the funds to meet the payment. There is a transaction which the customer is responsible for, which involves the bank in some sort of effort - whether automated or not. Indeed, more effort is required by the bank to reject a DD than to pay it - but nobody would claim that it was illegal or wrong for a bank to have a charging structure which charged per transaction for each payment made.

I can't see this point of the judgement standing on appeal because it really makes no sense.

[tomterm8]

Re: OFT WIN

Yes but no but.

The biggest part of the "no but" is that the UTCCR says:Essentially UTCCR has nothing to do with setting a fair price for goods or services. This was a major part of the banks' argument - the price of an overdraft or a bounced DD or whatever was part of the price or remuneration for the service of providing a current account.

As I've said previously, I struggle with understanding how anyone believes UTCCR can be used to define a "fair" price for banking services - because UTCCR is not about defining "fair" prices, as this section of it demonstrates.
[/size][/font]

While I understand what you are saying, the UTCCR price argument is, in any case, irrelevant for agreements made after april 2007, or for charges incurred after april 2007 (as far as the financial ombudsman is concerned), or after october 2008 for all agreements (as far as the courts are concerned), since the unfair relationship clauses of the consumer credit act 2006 come into force and explicitly include price as one of the criteria the courts can examine.

so, basically, the argument will be distinguishable for all of the terms the judgement actually inspected for charges after october of this year, if the OFT eventually lose the case. Charges made during the transition period (after april 2006) can be inspected by the court from october.

In other words, this judgement (so far) is of little actual relevance in the real world, since almost all agreements are either historical terms (which may be caught by the common law argument) or will be soon covered by the Consumer Credit Act 2006 Unfair Terms clauses. The most important part of the arguments so far has been the penalty charge one, which is elegant but bizzare... leading (in legal logic) to a concept of a new right of action when you are not in breach, but there is no service or product being provided. You can't help but think that this judgement is actually creating a heck of a lot of new law.

Phew.

[EXC]

Re: OFT WIN

Frankly, it's a ridiculous interpretation of the law. .

I would remind you that Justice Smith is a senior high court judge who sat through 14 days of submissions, waded through mountains of evidence, case law and witness statements and spent months working on his judgment.

For a legal amateur to tell me that his interpretation of the law is ''ridiculous'' is not deserving of a serious response.

[scoobydoo]

Re: OFT WIN

Reference my post- does not the fact that the cost of return limiting liabilty wed the cost of the purchase including the return to the fairness of cost? linking post by EXC?

[Tools]

Re: OFT WIN

Just to throw something into the mix regarding whether or not returning a DD is actually performing a service or not.

In January of this year my employer failed to pay my wages into the bank, this in turn did not leave enough funds in the account to cover the weekly mortgage payment. Naturally I was charged £35 for "Unpaid Mortgage Charge" obviously my employer was liable to refund me this charge(bear with me it is relevant).

I first discovered this when checking my telephone banking as to why I was so overdrawn when my weekly wage should have been credited to the account. What has only just occurred to me is this. The list of transactions on the voice recorded telephone banking clearly stated that the mortgage payment had first been debited from my account and then later that day credited back in. So the order of events was

4th Jan Unpaid Mortgage Charge £35
4th Jan Direct Debit £154(mortgage)
4th Jan Credit £154
7th Jan Credit £350(when I threatened my boss if he didn`t give part of my wage in cash there and then it would cost him a hell of a lot more)
7th Jan Debit Under Advice £154(mortgage)

It does not however, show on my printed statements as such. It only shows

4th Jan Unpaid Mortgage Charge £35
7th Jan Credit £350(cash paid in)
07th Jan Debit Under Advice £154(mortgage)

Now does this actually mean they DID remove the mortgage from my account briefly, consider the payment request, decide against it and refund to my account?

We have surmised that the Judgement interprets that they cannot charge for a service that was never carried out, but have they actually carried out a `service` from the above example? I am no expert on how direct debits are actually presented and processed by the banks/computers so over to you.

[Budgie]

Re: OFT WIN

Budgie

a) Stays are not to do with what type of account - stays are for overdraft/bank charges - still UTCCR to consider on them and stays still in place because the case is not completed.
b) The stay wont be lifted because its a basic account - Justice Smith hasnt looked at basic accounts so I don't see why that should be a reason for the stay not to be imposed/kept.
Also re this historic terms/current terms my thoughts are the Judge has looked at the essence of the charges, and we are picking on the wording (correctly maybe but even so). Whether they call it an unarranged overdraft or a penalty charge the essence is the same. You ask them to give you money you don't have, they charge you for it (whether they supply or not).

I do think the Judge is right to look at the essence/principals of the actual charge trigger as opposed to how the banks have worded their T&C's. Once the essence is sorted legality wise then the T&Cs can be bought into line. Think thats where the fault is.

Don't know if I agree with myself on this but thats the way I'm thinking historic terms will be going - hence the huge discussion in the case of PIL in T&C's.

A bit more detail on my stayed claim. I appealed against the stay on my claim in August 07, because Halifax had closed the account. I requested a stay lift hearing and got the stay lifted in December. The Halifax appealled and got the allocation hearing adjourned. The exact wording on the order is as follows :-
The allocation hearing be ADJOURNED to the first open date after the delivery of judgment in the test case referred to in Paragraph 1 of the order dated bla bla bla.
So in reality my claim isn't actually stayed it's adjourned. Am gonna draft a letter out asking for date for allocation hearing and attach a new witness statement requesting that Court deny any further stay request from Halifax. Will scour judgment for suitable material ( will certainly use the nice little fact that the banks have made around £3 billion profit from £0.6 billion of debt ) work on it and post for comments before sending.

[Vortex]

anything that shows in the morning is classed as provisional entries(provisional on sufficient funds being available to cover payments). Still not read judgement but i would say a service is performed each time an item is presented when the account goes overdrawn becaue a decision is made whether to pay or not pay that item. I think i had better get some brekkie and a coffee to go through the judgement and get up to speed

ok, am working through the judgement so will post thoughts as and when I read it and apologies to anyone who has made these points before. I think the basic bank account exclusion in the terms and conditions is not the relevant because unpaid item charge referred to within the test case is applicable in all banks' account. Back soon with more.

I know this judgement should be read as black and white because it is dealing with the Law, but the practicalities are wide of the mark. Paragraph 45 "nor is the bank under any obligation to lend to a current account customer or to allow him to overdraft facilities unless he has agreed to to do so". The view on the ground is that banks sometimes automatically increase overdrafts and send out a letter to that effect with only a tear off slip if you do not want the facility and not a tear of slip with both options. If the post is not received then it is implied acceptance. I am off on a tangent here so back to it.

paragraph 49 about "floor limits", some people simply spend until their card stops(i know that it seems irresponsible) but the is the practicalities of the situation yet the contract is surely not necessarily individually negotiated as such. They do not contract that payment instructions are governed by an additional level of authorising, maybe irresponsible by the banks to allow floor limits, perhaps.

another angle of attack dare I say it is presented in paragraph 64. The case is interesting to note where the bank pays as per the mandate, now it is the case that some banks do not hold a valid signature on their bank records. mmmmm, so pay or return anywy? interesting by point.

paragraph 76 would be interesting if the judge looked at basic accounts where provision of an overdraft is not allowed yet a returned item could create something not alowed on it.

[tomterm8]

Re: OFT WIN

Now does this actually mean they DID remove the mortgage from my account briefly, consider the payment request, decide against it and refund to my account?

We have surmised that the Judgement interprets that they cannot charge for a service that was never carried out, but have they actually carried out a `service` from the above example? I am no expert on how direct debits are actually presented and processed by the banks/computers so over to you.

No, what you have there is a single transaction log, where the transaction would say that it was taking money out of the account, and put it back in, but scarcely any work would happen in the intermediate time. Essentially, except for writing a standard rude letter, no additional work needs to be done if you haven't got the money in the account compared to if you do. At the most, you are talking about 1p worth of computer time extra.

[Vortex]

Re: OFT WIN

Paragraph 82 is simply not correct to the actuality on the ground. Justice Smith does not seem to be aware of this and I am not sure the OFT case have made much of a play on this point.

[Guest]

Re: OFT WIN

There is a transaction which the customer is responsible for, which involves the bank in some sort of effort - whether automated or not. Indeed, more effort is required by the bank to reject a DD than to pay it - but nobody would claim that it was illegal or wrong for a bank to have a charging structure which charged per transaction for each payment made.

Please define the "effort" you refer to above, in particular as you also make reference to this being automated, which tends to contradict the notion that any effort is involved at all.

[righty]

Re: OFT WIN

I have read this twice! & I think it's going to take a couple weeks of study before anyone can make any sort of meaningful Judgment about Justice Smiths initial findings

I think there are parts of the Judgment that frankly are contradictory & like Argentarius in at least one instance makes no sense.

I think that rather than get worked into a lather about something that has yet to be concluded sites like this should, in the meantime, concentrate efforts into a much more vigorous & very public campaign that exposes the banks often unconscionable behaviour toward debtors

I hate saying this but I think the more sorrow stories that expose the banks the more profound the effect on the public & politicians consciousness

I for one am preparing a piece, with evidence, about the finance industries shenanigans which should hopefully appear on the world wide web within the next couple of months

Any comments?

[Kafka]

Re: OFT WIN

This is an interesting approach that I am currently discussing with another member.

My feeling is that whatever comes out of the legal debates - that are currently absorbing 99% of the attention - after the CMC in late May we will find that nothing has been done about the stays and the hardship cases in particular. The courts will also still look to freeze everything for an easy life - any excuse not to do their work regardless of whether the claims are releated to the test case.

Whatever materialises, I think we should be working now to research this topic, collect a body of data and be ready to use this as appropriate in late May to help the hardship victims. The FSA and the banks hide behind the hardship clauses as if they are helping hardship cases, when we all know they are not. This could make a lovely story of deceit on their part, together with some really dire cases of hardship focusing on the victims.

For this to work I suggest that we need a small dedicated team of people to focus on this issue in the coming month to do the following.

1. Pull together the key issues of the failings to deal with hardship cases.
2. Compare these with the dodgy claims made by the banks and FSA (EXC is already working on this with the FSA)
3. Identify some of the best clear hardship cases that we can use.
4. Pull this info together to make a potentially free-standing article that would read well as a feature connected with the next stage of the test case in late May.

If I know this will be coming together then I can approach the press to see whether we have anyone interested in this as an exclusive. I am also able to feed this through political channels and working on strengthening these as we speak.

For personal reasons I cannot take on the responsibility for this area of work, but I will be happy to help if we have enough people willing to split the work. We have a growing body of talent and commitment on the foum and i think many people will be glad to get involved with helping now that there is momentum once again and we can see things that clearly need doing as part of the strategy to win.

I personally think this should be one of the key foci of our work at the moment, as both a best weapon and a duty to those suffering the most as a result of the stays and other injustices.

Off soapbox now - I need a cuppa
:tea:

[Amethyst]

Hardship has been a tricky one all the way through this and the FSA are aware of these, possibly a more public campaign is needed.

First of all does anyone have a list of cases that we know HAVE got a stay properly overturned and the case allowed to continue.

Temptys stay was overturned, as it should have been due to her circumstances, but was reimposed at appeal. The case should have been allowed to continue as the bank were partly responsible for the problems she was having at that time. I understand the banks arguments and that the legality of the charges is a massive subject to look at and rule on in the county court level, but I very much doubt if any compensation would be made to people, if/when charges are ruled unfair, that have lost homes etc that would have been prevented had they received their charges back when originally claimed. The additional 8% interest earnt on those claims (should they then go on to win) just doesn't cut it.

A lot of hardship cases which have been claimed haven't, in my opinion, been hardship in the true defination of the term, but I think a good review of cases across the sites and press which have been claimed as hardship is called for, and these cases that stays were continued upon should be given priority once the stays are lifted - IF those people want to continue depending on the judgement.


Hmmm I'll read that back in a minute think I made it sound more complicated than I mean.



Also this PCA Market Study needs to come out as soon as possible. They have put it off until end of April, and intended on holding back the parts specific to unfair terms - yet now this initial judgement is through they are putting off the entire report ?

[EXC]

Re: OFT WIN

I'd agree with most of what Kafke & Ame said.

I think Scoob would be just the gal for the job - with our help of course. She has already offered to do it.

Ame's suggestion of finding successful hardship claims is very good. we've tended to concentrate on the unsuccessful cases in the past and we could learn from them - if indeed there are any!

The PCA investigation and market study are 2 separate things. It's the PCA investigation that will rule on the fairness issue and Tom asked them on Thursday when it would be published but needless to say they wouldn't say.


I would hope that the PCA investigation will be published shortly after the CMC. The last I had on this was in February from Kate Farrow:

With regards to the investigation, we are continuing to request and analyse information from the banks and we therefore will not be concluding the investigation until after the judgment. The market study is expected to be published pre-judgment however this depends, to a certain degree, on when judgment is handed down.