Co-op being naughty

[kennyh]

I opened a 'parachute' account with Co-op and was advised that I would have neither an overdraft facility or a cheque book. This was acceptable.
I set up 2 direct debits to cover gas & electricity payments and the supplier began to play around with them and increased the demand rate saying they have my agreement (I currently have an SAR running to prove them wrong). Because of their attempts to take more cash then I could give, bank charges were generated. In order to receive their charges, the Co-op put me in unauthorised overdraft territory. I raised this with the bank and they have refunded half the charges under the usual goodwill gesture guise. I am now aiming to issue N1 or is it a moneyclaim these days? Should I? I would like a judgement - "gestures of goodwill" I am fed up with; for a start there's precious 'goodwill' as such and by accepting such means they could repeat their wrongness.
I have encountered diametrically opposed opinions on using BCOBs and am inclined to resort to 'old school' methods deploying CCA and UTCCR (not the bit already sullied by OFT). Views would be welcome and I am studying CCA,UTCCR,BCOBs and PSA regs according to the gospel of the FSA handbook and, YES, my eyes are revolving at an increasing rate of knots since I'm also helping with our disabled son, at home, and, in keeping with thousands of others, trying to maintain our home as a pensioner (NOT a retired CEO type pension!).

[gravytrain]

Re: Co-op being naughty

I am a little unsure what it is that the bank has done wrong here.

You say you set up a DD and there wasn't enough money in to meet them, so the bank placed charge on your account as per their T and C's, am I missing something ?

[leclerc]

Re: Co-op being naughty

I opened a 'parachute' account with Co-op and was advised that I would have neither an overdraft facility or a cheque book. This was acceptable.

I set up 2 direct debits to cover gas & electricity payments and the supplier began to play around with them and increased the demand rate saying they have my agreement (I currently have an SAR running to prove them wrong). Because of their attempts to take more cash then I could give, bank charges were generated.

In order to receive their charges, the Co-op put me in unauthorised overdraft territory. I raised this with the bank and they have refunded half the charges under the usual goodwill gesture guise.
As a general rule they will refund money on the first occasion in this manner. I have had that done with a credit card, a couple of years ago.
I am now aiming to issue N1 or is it a moneyclaim these days? Should I?
The site here does not recommend taking legal action for the recovery of charges because of the OFT test case effectively threw out the case on the basis of price.

I would like a judgement - "gestures of goodwill" I am fed up with; for a start there's precious 'goodwill' as such and by accepting such means they could repeat their wrongness.
The question I would ask is that if you are issuing an N1, have you actually had any loss as a result? Most companies use the wording as a gesture of goodwill, ie there is no fault on their part and let us use that as a starting point. Firstly, an agreement was made between yourself and a third party for payment of sums on demand. That agreement was sent to the Co-Op, ie DD form and it was processed fairly and correctly. However, at what point did you realise that the payments were not in agreement with you and did you cancel the agreement with the bank, which you are entitled to do, stopping the bank paying out on that agreement? If no cancellation was made then the bank is asked for money from the company which the bank is not aware is not to your liking(for want of a better word). As no funds are available then they bounce the item or return the item unpaid as per their protocol for no money being into the account. The basic mechanism that they have used means that their is no fault unless you had cancelled the agreement prior to them asking for the funds. That means that they cannot refund under the term "bank error" so because you are a new customer they have listened to what you have said and have said, this is a new customer, a new relationship and clearly there is the chance that you will be a good customer for them and this is the first time you have transgressed, so to speak. The reasoning being that this was a one off event and is unlikely to happen in the future so therefore despite them not having made any mistake in the transaction, since clearly they had no idea that the agreement was not to your liking or theirs for that matter, they have offered to you a gesture of goodwill between them and you the customer.

I have encountered diametrically opposed opinions on using BCOBs and am inclined to resort to 'old school' methods deploying CCA and UTCCR (not the bit already sullied by OFT).
BCOBS offers no solution to you in regards to an item returned unpaid since because it created an overdraft is not covered by the BCOBS principles whatsoever and is actually regulated by the OFT. My question remains as to what damage has been caused by the banks' actions? The fact that they were utility payments could potentially lead to the issue of financial hardship, yet I would argue that as it was the first payment and that there was no evidence of other unpaid items or severe hardship, the issue of FH is not at issue in this case. Any case under UTCCR's is extremely difficult because of the OFT Test Case. Many of us have looked at GLC for hope on that score yet we still, almost 3 and a half years later, have had no cases going through the courts. No case has been argued in court on BCOBS and successfully won yet and I doubt there will be due to the jurisdiction over the case.

Views would be welcome and I am studying CCA,UTCCR,BCOBs and PSA regs according to the gospel of the FSA handbook and, YES, my eyes are revolving at an increasing rate of knots since I'm also helping with our disabled son, at home, and, in keeping with thousands of others, trying to maintain our home as a pensioner (NOT a retired CEO type pension!).

I want to ask about the issue of Loss? Did the bank refund 100% of the charges?

[leclerc]

Re: Co-op being naughty

That was a long post but I do think that it is necessary to also make a note that some people on other forums are so obsessed with BCOBS that they do not appear to understand the difference between using BCOBS and simply telling a bank that you are suffering financial hardship and explaining your circumstances to that bank and the effect on charges upon charges. In fact, BCOBS is being simply thrown around willy nilly without thought about how it works and about exactly what it relates to.

[Salmon Man]

Re: Co-op being naughty

The Direct Debit guarantee clearly states that you will be informed of the costs intended to be deducted with at least 10 days notice. You should have had plenty time to cancel the d/d, or cover the costs in your account.

If the Co-op have not issued you this notice then I would presume they are at fault.

[leclerc]

Re: Co-op being naughty

The Direct Debit guarantee clearly states that you will be informed of the costs intended to be deducted with at least 10 days notice. You should have had plenty time to cancel the d/d, or cover the costs in your account.

If the Co-op have not issued you this notice then I would presume they are at fault.

Why are the Co-Op at fault if the DD provider has the agreement between the customer and themselves?
I would add that the DD Guarantee scheme would only have applied if the amount was actually taken out of the account, and so, when it was returned unpaid the Guarantee scheme ceases. Now there is a separate thing that could have happened had it gone through cos under the chargeback system on DD Guarantee Scheme you can claim costs associated with it. However this is not the case.

[Salmon Man]

Re: Co-op being naughty

Why are the Co-Op at fault if the DD provider has the agreement between the customer and themselves?
I would add that the DD Guarantee scheme would only have applied if the amount was actually taken out of the account, and so, when it was returned unpaid the Guarantee scheme ceases. Now there is a separate thing that could have happened had it gone through cos under the chargeback system on DD Guarantee Scheme you can claim costs associated with it. However this is not the case.

Sorry leclerc, I did mean the utility companies should have sent notice of the price increase.

[leclerc]

Re: Co-op being naughty

Sorry leclerc, I did mean the utility companies should have sent notice of the price increase.

I think the question currently is whether there was a loss? If there was a loss ie a black mark, so to speak, on the OP's credit history due to an error with the utility company then perhaps there is a case to answer on that regards, ie that whilst the bank may have refunded charges the Utility companies owe the OP an apology plus the removal of late markers on the credit file.

[kennyh]

Re: Co-op being naughty

First let me say that the payee varied the amount of the d/d without consultation. Second I know nothing of any DD guarantee scheme.
Is it not possible that Payment Services Regulations 2009 might be a better vehicle for this activity. After all, I cannot be the only person who has had his account abused unilaterally by his bank and/or the payee sufficient to place said account into 'unauthorised' territory. Certainly the section of PSRs titled 'Authorisation of Payment transactions' including regulations 55-68, and, quite probably, other regs as well, would seem to cover the ground? PSRs would certainly seem relevant to a significant degree. Since they are Statute based I hope they can be legally enforced. I shall read more later.
I've probably already obliterated my credit record but Co-op certainly levied charges (only part of which they have refunded) and I have yet to see whether they have indulged in 'snowball charging' ie charges because of charges in unathorised territory. Given the degree of automation employed these days I should be surprised if they have not indulged.
So far as Gravytrain is concerned at #2 could I ask that my original entry be read again.

[leclerc]

Re: Co-op being naughty

First let me say that the payee varied the amount of the d/d without consultation
The direct debit bounced so if the company varied the amount without consultation then they should be paying you a compensatory amount due to THEIR error.

Second I know nothing of any DD guarantee scheme.
Then why sign an authority asking for a direct debit being taken out of your account if you do not know what you are signing. From a rational perspective that simply is ridiculous for you to do that.

Is it not possible that Payment Services Regulations 2009 might be a better vehicle for this activity. After all, I cannot be the only person who has had his account abused unilaterally by his bank and/or the payee sufficient to place said account into 'unauthorised' territory. Certainly the section of PSRs titled 'Authorisation of Payment transactions' including regulations 55-68, and, quite probably, other regs as well, would seem to cover the ground? PSRs would certainly seem relevant to a significant degree. Since they are Statute based I hope they can be legally enforced. I shall read more later.
I've probably already obliterated my credit record but Co-op certainly levied charges (only part of which they have refunded) and I have yet to see whether they have indulged in 'snowball charging' ie charges because of charges in unathorised territory. Given the degree of automation employed these days I should be surprised if they have not indulged.
So far as Gravytrain is concerned at #2 could I ask that my original entry be read again.

I think having read the PSR that you do not have a case under PSR's since no cancellation occurred prior to the payment, the payment instrument was correct ie a DD authority was signed.

If the charges are charges on charges then that is an issue which I think if memory serves me right, Co-op offered a small goodwill gesture refund which I think you might have declined....

[kennyh]

Re: Co-op being naughty

I think having read the PSR that you do not have a case under PSR's since no cancellation occurred prior to the payment, the payment instrument was correct ie a DD authority was signed

.
True but Co-op accepted the variation without confirming my agreement.

If the charges are charges on charges then that is an issue which I think if memory serves me right, Co-op offered a small goodwill gesture refund which I think you might have declined....

Since THEY created the problem there's no question of a small goodwill gesture (what goodwill?) unless it's offered after all charges have been credited.

[leclerc]

Re: Co-op being naughty

You did not cancel the the DD prior to it going out so therefore the bank is not at fault for the lack of cancellation on your part.

If you are stubborn then they will offer NOTHING because you are more concerned with the wording of a refund gesture than actually the refund itself.

Yes that is harsh but the reality is that if you are stubborn and are simply bedding in because you think that the bank are refunding you yet are at fault, a position which at the moment, you have not proven to have any case over, then you will get nothing because the FOS will rule that their offer and their reasoning was reasonable and fair in the situation that happened.

Part 55 of the PSR's state this:

Consent and withdrawal of consent
55.—(1) A payment transaction is to be regarded as having been authorised by the payer for the
purposes of this Part only if the payer has given its consent to—
(a) the execution of the payment transaction; or
(b) the execution of a series of payment transactions of which that payment transaction forms
part.
Under section 55 you have given consent based on what is written above.

(2) Such consent—
(a) may be given before or, if agreed between the payer and its payment service provider,
after the execution of the payment transaction; and
(b) must be given in the form, and in accordance with the procedure, agreed between the
payer and its payment service provider
The procedure is the Direct Debit mandate that is operating at the moment that the payment is being taken.

(3) The payer may withdraw its consent to a payment transaction at any time before the point at
which the payment order can no longer be revoked under regulation 67.
This part is crucial for you, which is that you can withdraw your consent PRIOR to the point which the payment can no longer be revoked under regulation 67 which I will quote shortly afterwards.
(4) Subject to regulation 67(3) to (5), the payer may withdraw its consent to the execution of a
series of payment transactions at any time with the effect that any future payment transactions are
not regarded as authorised for the purposes of this Part.

So regulation 67:

Revocation of a payment order
67.—(1) Subject to paragraphs (2) to (5), a payment service user may not revoke a payment
order after it has been received by the payer’s payment service provider.
(2) In the case of a payment transaction initiated by or through the payee, the payer may not
revoke the payment order after transmitting the payment order or giving consent to execute the
payment transaction to the payee.
(3) In the case of a direct debit, the payer may not revoke the payment order after the end of the
business day preceding the day agreed for debiting the funds.
(4) Where a day is agreed under regulation 65(4), the payment service user may not revoke a
payment order after the end of the business day preceding the agreed day.
(5) At any time after the time limits for revocation set out in paragraphs (1) to (4), the payment
order may only be revoked if the revocation is—
(a) agreed between the payment service user and its payment service provider; and
(b) in the case of a payment transaction initiated by or through the payee, including in the
case of a direct debit, also agreed with the payee.
(6) A framework contract may provide for the payment service provider to charge for revocation
under this regulation.



The above is regulation 67 and all of the other clauses will refer back to section 55 which I have stated is not proven not to be the case. Please can you site the precise regulation under PSR that you think you are covered by because section 55 appears to have been adhered to in the transaction.

Here is the link to PSR's : http://www.hm-treasury.gov.uk/d/si_payment_services_regulations100209.pdf

I may sound harsh in the posts but if you had a case that I thought was water tight then I would be going for the throat but at the moment you issue in part stems from the fact that the bank is offering a refund and calling it a gesture of goodwill.

I have already stated that they have not breached their duties in this case and that simply finding avenues or ways so that they call the refund a refund because it was their fault simply does not wash in the present day having had the judgement of OFT vs The banks from the Supreme Court in November 2009.
I'm happy to debate the issues of PSR's BCOB's and The Lending Code and by all means criticise what I have written above but quote which part of the PSR's I am wrong about in this respect and which part of BCOB's applies in your case.

[bluebottle]

Re: Co-op being naughty

If the payee is playing silly buggers with the DD, perhaps, it is them you should be seeking reimbursement of bank charges from as if the payee is not playing by the rules, it could be argued their conduct amounted to a breach of contract on their part. I have to agree with what Leclerc has said in his posts.

When I had a telecoms provider playing silly buggers with a DD I had with them, I spoke to my bank and they were very helpful. In the end, in order to protect the bank and myself, they refused to accept any further DDs from my account from the telecoms provider, who threw a strop and tried to impose charges, but that was nipped in the bud very quickly and they backed away.

[leclerc]

Re: Co-op being naughty

If the payee is playing silly buggers with the DD, perhaps, it is them you should be seeking reimbursement of bank charges from as if the payee is not playing by the rules, it could be argued their conduct amounted to a breach of contract on their part. I have to agree with what Leclerc has said in his posts.

When I had a telecoms provider playing silly buggers with a DD I had with them, I spoke to my bank and they were very helpful. In the end, in order to protect the bank and myself, they refused to accept any further DDs from my account from the telecoms provider, who threw a strop and tried to impose charges, but that was nipped in the bud very quickly and they backed away.

Bluebottle that is where I was going to be honest.

I think I want to explain the mechanism of Direct Debits(and I apologise in advance to Kennyh and anyone else who thinks I am being patronising but it needs doing).

Utility company A can set up a Direct Debit in one of two ways: 1) a system called AUDDIS(which is an automated direct debit system). My understanding is that they still need to send the bank a copy of this.
2) a direct debit mandate is completed and the company send it to the bank.

If Utility company A has a mandate it will have a reference number. For this example, we'll use the number 123456 for simplicity.
The Direct Debit mandate does not have any figures as to what it being taken out but simply authorises the bank to process a transfer of money from my bank account to their bank account on demand until such time as either I or they cancel the direct debit or the bank cancels it due to it being returned a number of times(I will try not to dwell on this one as it is not the issue here as such).

The bank merely transfer the money on request because the authorisation is in place. However, say that they asked for the money but gave a reference 234567? The bank would say no you cannot have the money because there is no authority in place to do so.

The only time in which you as a consumer can send set payments to another person is realistically via standing Order. In terms of Direct Debits, in my experience, TV Licence money coming out of the account is one of the rarest ones which will go out on the date they specify.

KennyH, if you have something in writing that the utility company will take x pounds per month for y number of months then the utility company are at fault because they asked for more money than you had agreed with them. The bank is not at fault for the processing of the Direct Debit since it had the written authority to do so and that consent was not withdrawn prior to the Direct Debit going out of the account.

[kennyh]

Re: Co-op being naughty

Please can you site the precise regulation under PSR that you think you are covered by because section 55 appears to have been adhered to in the transaction.

True the process had been adhered to but is there no 'sanctity' of the agreed level of payment?

The bank is not at fault for the processing of the Direct Debit since it had the written authority to do so

But surely using the level of payment cited at the initial setup.
At the behest of the utility company I set up a direct debit for an agreed amount(notified by email now vanished).
After 1 month without any notification they 'upped the anti'.
I understood from PSRs that, in such circumstances, it was up to the payment service provider to deal with the payee. If not then its down to me.
For the record I'm NOT touchy about what they call any refund (although, Yes, I would prefer that someone own up to an error) and I have NOT turned down any partial refund.
But tell me, if we can't use BCOBs and PSRs can't, for the most part, be used by an individual then is it right to consider CCA and the unsullied part of UTCCR?