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Following a discussion with the OFT in which they asked Beagles to set out in a bit more detail what our concerns about the Test case and issues surrounding it are, we have submitted the following;
Campaign Concerns & Questions
1. OFT & Banks deal: Our concern being that a £12 credit card type cap would:
a) Simply result in people still having to claim the balance on past and possibly future charges
b) Not address the fundamental issues of penalties and fairness.
c) Have a major impact on the level of refunds for past charges. The success of complaints and litigation on historical T&C’s are based on the breach of contract/penalty argument which renders the whole charge unenforceable.
2. Test Case Issues: Historical T&Cs have not been given nearly enough consideration in the test case:
a) The court should be made more aware that the penalties were simply reworded to accommodate the ’fee for a service’ argument and that ‘cloaking’ has occurred.
b) Will the judgment on the limited number of historical T&Cs being considered by the court apply to ALL historical T&Cs on the issue of penalties and UTCCR?
3) PCA investigation:must be finalised by July:
a) The campaign is concerned that there is no clear conclusion in sight and that the banks have been afforded enough consultation.
b) If a cap on the level of charges is made, will this take into account the bank's true administration costs?
c) Will the PCA cover the high compound interest charged on the charges and will it be accounted for in any refunding of past charges?
4. Waiver & stays:Although not strictly the OFT's remit, this is a massive issue and widely seen as the most unfair and inequitable aspect of the test case. It has severely dented any confidence consumers had in financial regulation and is universally seen as a concession made to the banks for the privilege of taking then to court.
a) The waiver has been in place for 10 months on the basis that the legal issues in the county courts would be resolved in the test case but historical T&Cs have only recently been scheduled to be dealt with:
b) The FSA have been manifestly negligent in enforcing the consumer protection elements of the waiver conditions.
c) Hardship cases are being routinely ignored. There are a growing number of hardship cases who’s debts are either mainly or wholly made up of unauthorised charges.
5. Credit cards: The 'quick fix' £12 charge cap needs addressing urgently.
a) Will there be a read-over to credit card charges?
6. Barclays new charging structure:
a) The headline £8 charge obscures the real potentially high cost of the scheme.
b) It is inherently complicated and I’m yet to come across anyone who fully understands it. Do you?
c) Future charging structures MUST be standardised if consumers are to have any hope of making informed decisions on choosing current accounts.
d) What are the implications for the PCA investigation and test case for this and similar schemes being introduced at this stage?
Legal Beagles.info 30 May 2008
We look forward to their response.
Thanks to Budgie, Cetelco and EXC.
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