FSA complaints on bank charges waiver 2006/07 & 2007/08

[Amethyst]

from annual report - http://www.fsa.gov.uk/pubs/annual/ar07_08/Appendix3.pdf

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Bank charge waiver

We received 703 complaints relating to the waiver we granted to firms on
unauthorised overdraft charges. These complaints were received from
consumers and organisations representing consumers but fell outside of the
scheme as they related to our exercise of discretion.

[EXC]

Re: FSA complaints on bank charges waiver 2006/07 & 2007/08

Good spot

[Amethyst]

Re: FSA complaints on bank charges waiver 2006/07 & 2007/08

and

Regulation of retail banking
We acknowledge the Panel’s concerns about the regulation of retail banking.
We have begun a review of whether the current system of self-regulation for
conduct of business in retail banking should continue for areas within our
remit. We are working closely with the Banking Code sponsors and other key
stakeholders, and will continue to seek input from the Panel throughout the
review.
Charges on unauthorised overdrafts
We note the support the Panel gave the test case and also acknowledge its
concerns about the length of time the waiver might be in place. The waiver
was established to facilitate a test case between the Office of Fair Trading
(OFT) and seven banks and a building society on the lawfulness of
unauthorised overdraft charges under Unfair Terms in Consumer Contract
Regulations (UTCCRs). We were concerned that without legal certainty over
the level, fairness and lawfulness of these charges, firms would not treat the
significant number of complainants fairly or consistently.
The Court proceedings to date have dealt with the preliminary legal issue of
whether the charges are assessable for fairness under the UTCCRs and
whether they are a penalty at common law. The firms concerned have
indicated they will appeal the decision that charges are assessable under
UTCCRs. We cannot predict how long the case will last. We granted a
waiver for 12 months. We will consider whether renewing the waiver is
necessary and appropriate. Once the legal position is clear, we will require
firms to deal with outstanding and new complaints, taking into account the
principles established for resolving these complaints.
The waiver contains a number of conditions designed to ensure that
consumers’ interests are appropriately protected and we have kept firms’
compliance with these under review. However, the waiver does not extend to
customers in financial difficulty, or to complaints about issues other than
unauthorised overdraft charges. The identification and handling of situations
involving financial difficulty is covered by the Banking Code and is overseen
by the Banking Code Standards Board (BCSB). We and the BCSB have
conducted joint visits to a number of firms to examine financial difficulty
issues. Our aim in these visits was to check whether firms are complying with
the waiver, including by identifying and dealing with complainants it does
not cover. The BCSB’s aim was to ensure that firms are dealing with financial
difficulty issues in line with the standards set out in the Banking Code.
We continue to monitor firms’ compliance with the waiver. If we identify a
situation where the firm cannot satisfy us that it meets either a condition of
the waiver, or that it is not treating a complainant fairly and in accordance
with our rules, we will take action. We can confirm that the specific example
mentioned by the Panel is covered under section 13(2)(b) of the waiver.

[EXC]

Re: FSA complaints on bank charges waiver 2006/07 & 2007/08

The example they referred to at the end - 13 (2) (B) - is this:


(b) close accounts or threaten closure of accounts of customers for the purpose (or with the intent) of penalising customers that have complained about