News from the CMC - May (OFT v Banks)

[EXC]

Re: News from the CMC (OFT v Banks)

I've not much to add to anything on today except that I was pretty sure that the judge, referring to the appeals, stated on more than one occasion that they would be heard in the House of Lords as opposed to being heard in the court of appeal first. If I'm right - that's an IF) it would certainly speed up the eventual conclusion.

[TANZARELLI]

Re: News from the CMC (OFT v Banks)

Thanks to you all yet again. You are doing us all proud by providing qualitative (if thats how its spelt lol) information.

Nice one folks :-)

Tanz

[Ladidi]

Re: News from the CMC (OFT v Banks)

This was also being reported on the BBC news website..

http://news.bbc.co.uk/1/hi/business/7415225.stm

[EXC]

Re: News from the CMC (OFT v Banks)

Something we didn't mention from day 1 of the CMC is that basic bank accounts will be included in the declaration that will be made on the 7-8 July

[Amethyst]

Re: News from the CMC (OFT v Banks)

cough ahem - post #1

7th and 8th july hearing the judge will be making decisions re the penalty issues and UTCCR 99 on historic terms and basic accounts. This will be a declaration ( handing down of judgement ).

[EXC]

Re: News from the CMC (OFT v Banks)

Ooops! Sorry!

[righty]

Re: News from the CMC (OFT v Banks)

I think the suggestion that things need not move forward until a HOL ruling & that stays should remain without a moratorium on the banks charges is disgraceful

Its clear Justice Smith thinks that consumers being unable to recover their charges are a minor irritation for them. He probably thinks that any compensation is merely a windfall to be enjoyed by buying a new car, hi fi or an exotic holiday. He either doesn't know or chooses to ignore that for many it's the chance to become solvent again & ease the pressure on their day to day lives.

That whilst the banks are allowed to impose these charges with no possibility of relief for the consumer more & more are going to find themselves sinking deeper & deeper into debt

[Amethyst]

Re: News from the CMC (OFT v Banks)

I think Justice Smith came across as being quite keen to get things moving for the consumers with their money held up in litigation. I don't believe he underestimates the gravity of the situations some people have been forced into by the charges - although I would like to see more action on the hardship cases stuck in the waiver - but for the we need to lobby the FSA as opposed to the court.

I think we talked about the possible consequences of a ''moratorium'' on charges whilst the the issue is undecided before. I really truely can not see how it can work for the benefit of the consumer. Should the decision go against us then wouldnt people be faced with huge bills of charges that have built up over the period. It could also encourage people to think oo doesnt matter if I don't keep track so closely on my account they can't charge me anyway. If a waiver that way round were imposed then it would have to be a blanket stop on any fee incurring transactions (ie just not pay stuff if its going to go over your limits - which the judge did mention in his judgement couldnt be perceived as a chargeable service) which brings its own problems with it, eg peoples mortgages not going through cause of a few pence over limit etc. and subsequent problems with that.

Just my thoughts. They need to get the banks to actually CONSIDER their customers as individuals and account for peoples circumstances when applying charges. That would have a lot greater effect - although I understand the cost of this to the banks would be huge (they have enough to cope I'm sure)

[Amethyst]

Re: News from the CMC (OFT v Banks)

Theres a little report in Independent today about PayPoint's profits rising by 14%. Apart from the cash machine service they provide, they offer a payment service for bills like water, tv licence, electric - which have previously (recently anyways) been being paid by direct Debit - maybe this shows a slight move away from DD useage by the consumers.

[EXC]

Re: News from the CMC (OFT v Banks)

Its clear Justice Smith thinks that consumers being unable to recover their charges are a minor irritation for them.

I would have to disagree with that. He spent a lot of time yesterday explianing to both parties the importance of an early conclusion to the stayed litigation.

It might seem. from a distance that he is complicit in the delays but I can assure you he is very aware of it.

[Amethyst]

Re: News from the CMC (OFT v Banks)

INDEPENDENT - Friday 23rd May

Court presses OFT to rule on bank charges

By David Prosser, Deputy Business Editor
Friday, 23 May 2008


The Office of Fair Trading pledged yesterday to decide by mid-July whether bank borrowing charges are unfair and how much compensation customers should receive. The regulator was pressed into giving the commitment by a High Court judge, who said courts considering such cases and customers making claims for refunds had already faced significant delays due to the legal impasse in the dispute.

The OFT gave its commitment to Mr Justice Andrew Smith yesterday afternoon after its barrister had initially warned that he did not know how long the regulator's ongoing inquiry into unauthorised borrowing charges would take.

"We are facing a lot of litigants who have not had their claims struck out and who should be in a position to pursue their claims," Mr Justice Smith said. "How long should we hold up the county court litigation? Are we talking months, years or weeks?"

Having been urged to set a deadline for a decision, the OFT's legal representatives returned to court later in the day and said they would give the banking sector its verdict during the second week of July. If banks dispute the decision, the two sides pledged to return to court before Christmas to settle the question.

The OFT has been conducting an investigation for more than a year into whether the charges – often more than £30 – that banks levy on customers who exceed current account overdraft limits or bounce cheques are lawful.

Last month, Mr Justice Smith said the OFT had a legal right to consider what level of charges was fair – and to order compensation if necessary – under consumer contract laws enacted in 1999. However, the OFT has until now been unable to say when it would reach a decision, leaving hundreds of thousands of bank customers who have already filed claims for compensation facing uncertainty over when their cases would be heard.
Despite yesterday's commitments, customers may still face a long wait for compensation. Mr Justice Smith also gave the eight banks covered by test cases on borrowing charges leave to appeal last month's ruling. The appeal will be heard this autumn, but the case could drag on into next year if subsequent appeals by either side are launched in courts at different levels up to the House of Lords.

The appeal was criticised by consumer groups, which accused the banks of deliberately spinning out the dispute to put off paying compensation for as long as possible. Phil Jones, of Which?, said: "This has taken far longer than we had hoped, so the OFT's move is a positive one, but we are disappointed in the banks, which we had called on not to continue stringing this out."
Nevertheless, yesterday's commitment by the OFT represents a breakthrough for customers seeking refunds that could cost the banking sector up to £3.5bn. A spokesman for the regulator said: "We have always made it clear that any appeal by the banks would not prevent us from considering the fairness issue."

The OFT was also buoyed by the banks' decision to accept that verdicts in the test cases would be binding on previous terms and conditions on current accounts, as well as the detail in the cases under consideration.
In theory, the OFT could now come to a view about the compensation owed to customers only for the courts to rule the 1999 consumer contracts legislation does not give it the right to use its authority in this way. However, the OFT's pledge also means the regulator will be in a position to order compensation payments – assuming it deems charges unfair, as it has in the credit card sector – as soon as the courts give a final verdict on its jurisdiction.

[righty]

Re: News from the CMC (OFT v Banks)

I'm sorry I just don't have the confidence in Justice Smith that many other seem to have

Why not a moratorium we have one for consumers in the form of the stays & not only the banks still applying them they are also still trying to recover them using all the old methods, threats DCA's etc

I note you think some consumers would run amock if they didn't have to pay these charges ............ really .................... I thought like the rest of us you are against these charges ............... what if the consumer does win ............... do you expect some will run amock then ........... and if so what's the difference between a moratorium now & a win later..

Wouldnt it be more likely that vast majority of consumers knowing they are not being charged & knowing that risk receiving a large bill if they lose would actually act differently & be more careful.

I'm sorry Amethyst I do most sincerely mean this when I say I admire you & your works very much but your suggestion that it would be a bad thing because some consumers can't be trusted ranfg alarm bells as it smacks of a similar attitude as that displayed by the banks that they are just feckless.

If being on these boards & helping consumers hasn't yet dispelled any such misconceptions I don't know what will as it certainly has me

[enaid]

Re: News from the CMC (OFT v Banks)

So it's possible that the judge might do what the FSA should have done when they allowed the stay, place a moratorium on bank charges

moratorium:
1 a: a legally authorized period of delay in the performance of a legal obligation or the payment of a debt
b: a waiting period set by an authority

2: a suspension of activity

for those of us who may be wondering

[righty]

Re: News from the CMC (OFT v Banks)

Justice Smith can make all the right sounding noise's he likes & he will as he realises that he's very much in the public eye but unless he actually rules they can proceed his words are meaningless

I think much more telling was what I believe his remark that the stays must remain until HOL ruling which may be a couple of years away

[Amethyst]

Re: News from the CMC (OFT v Banks)

lol not at all, and I know my views can be taken that way by some.

I do agree that the ''vast majority of consumers knowing they are not being charged & knowing that risk receiving a large bill if they lose would actually act differently & be more careful.'' Sadly it is the more vulnerable in society who may think today deal with tomorrow when/if it comes. Myself included in the past. If charges were put on hold, people yes might worry about getting a big bill at the end of it if the decision were to come down on that side, but equally I think there would be people who would think the decisions likely to come down on our size so the bill wont be that big etc etc. Like I say its just my opinion, and I know its the way I would have thought a couple years back. Also if I knew that if I didnt quite have enough to pay my mortgage in my account and it would get paid but I;d get a £35 wallop I'd likely get up to the bank if I possibly could and get the extra in to avoid the charge. If there were no charge or a minimal charge then I most likely wouldnt. Thats just the way I think.

I would just be concerned that a halt entirely on charges during the test case could end up with the most vulnerable people facing bills at the end of it increasing debt at a time when we really don't need any more.


And thanks for your other comments righty, thats lovely to hear from you


Oh and I have no notions whatsoever about Plasma TV's before any one chucks that old chestnut in to the mix