Hardship cases

[scoobydoo]

If it is of any help here is a quote from the FOS on hardship
"It is correct that a case of genuine financial hardship will still be considered by this service; however, the financial difficulties in question must be current, and relate entirlely to the charges on the account. Essentially this means we are only able to take forward cases where a claimant is currently incurring charges on their account, which are causing existing financial difficulites. it does not apply in cases where a complainant may be suffering from difficulties unrelated to the account in question, but believes that a refund of charges my alleviate the problem .


IMO ( As I am sure you are aware) there is very little chance of having stays lifted in court. It is my opinion that the agreement did intend that the banks should "filter" hardship cases and deal with them - outside the court system, not within it. and that is why the courts are re-instating stays ( or they are under some kind of political pressure)

There was a very successful case on another site where the FOS did assist a hardship case go back to the A&L and win back the charges - but the above does clarify how they do quantify hardship.

As far as I am concerned the voluntary banking code and the agreement drawn up before the court case contains ambiguous and unquantifiable wording - which does nothing to help the claimant.

later I will post a suggested letter to send to the FOS - for comments only.


jan

[Nattie]

Re: Hardship cases

Jan, I agree with you and I think you will see on here that a few discussions re hardship is the difficulty in actually defining it. I believe the FSA referred to the Banking Code---please correct me if I am wrong, which was made in 2005 and is already as such out of date as, by the time the case maybe actually heard and maybe ongoing the new banking code will be out. Now can you guess what the banks are doing now? Changing terms and conditions on accounts. Now you do know you can decline any changes to a contract? Has anyone done this? I doubt it, but we will see.

[iancognito]

Re: Hardship cases

Jan, yes I agree with you (but I don't think the FOS helped in the A&L case from what I've read, they are just wimps) BUT if you look at Tempty's case, she has been, and still is struggling to keep her family on benefits and paying bank charges and a consolidation loan at the same time which fits all of the criteria you have mentioned - I don't imagine I have to tell you the rest.......

[EXC]

Re: Hardship cases

Shortly after the waiver was introduced Which? asked the FSA what definition of hardship they were using. The FSA referred them to the Banking Code. Only problem
is the Banking don't have a definition - see below.

The FSA's legal dept wrote to me saying that the hardship element of the waiver conditions ''is a safety net built into the waiver'' but in an artical recently the FSA said said of the hardship condition that 'The waiver does not interfere with a firm's obligations under the Banking code'' which is entirely different.



Dear EXC
I refer to our telephone conversation earlier. I have set out below the text of an email we have prepared to send to people who contact us regarding the definition of financial hardship following on from the complaints handling waiver granted by the FSA to the banks pending the outcome of the test case in the new year.

“The BCSB is an independent body that polices the Banking Code and the Business Banking Code. We do not investigate individual complaints against banks, building societies and card companies, because that is the role of the Financial Ombudsman Service (FOS). The BCSB Helpline can only advise on your rights under the Banking Codes, and cannot give legal advice.

Your rights under the Code
Section 14 of the Code says that your bank should “consider cases of financial difficulty sympathetically and positively. Our first step will be to try to contact you to discuss the matter.”
Section 14.4 says that you can instruct an advice agency, such as a Citizens Advice Bureau (CAB) to act on your behalf in repayment negotiations with your bank. The bank is then obliged to correspond and deal with your money adviser there, who will have had experience in handling repayment negotiations and will provide a free service. You should be able to negotiate repayments that you can afford. You may be able to ask the bank to freeze interest and other charges accruing to the account, although this is discretionary. Other agencies which provide a free advice service are:
National Debtline: 0808 808 4000 (www.nationaldebtline.co.uk)
Consumer Credit Counselling Service: 0800 138 1111 (www.cccs.co.uk)
Payplan: 0800 085 4298 (www.payplan.com)
A money advisor at one of the above-listed agencies can help you to draw up a Financial Statement that shows how much of your income is needed to pay for essential living expenses, before assessing how much you can afford to repay the bank.

Complaining about your bank
You may believe that the bank has not complied with its obligation under the Code to be “sympathetic and positive” and to work with you in resolving your financial difficulties, and that this has caused you a financial loss. In this case, one course of action is for you to pursue this as a complaint against the bank. You should make your complaint through the bank’s internal complaints procedure. The bank will give you details of this, on request. This sets out the legal timescale the bank is required to follow in dealing with your complaint. Your complaint should be made in writing, to its designated complaints department. After the bank has looked into your complaint, it will write to tell you of the outcome of its investigation. It will also tell you about your right to bring your complaint to the FOS if you are still not happy.
The FOS helps settle disputes between individuals or small businesses and financial organisations. If a settlement cannot be agreed, they decide who is right. The service is free to consumers and its decisions are binding on financial organisations. FOS can make awards of up to £100,000. You can find their contact details on their website at www.financial-ombudsman.org.uk. The FOS takes account of the Banking Code in making its decisions.

Complaints about unauthorised overdraft charges: hardship cases
An announcement was made recently about a test case on unauthorised overdraft charges. Until that case is heard in court, banks joined in the case have been given dispensation by the FSA just to acknowledge but not to investigate complaints, unless the customer is in very difficult financial circumstances. Banks and building societies will have to conduct a filtering process to ensure that cases of genuine hardship are still dealt with during the waiver period. Complaints about banks which have not complied with the financial difficulties provisions of the Code would still be entitled to be referred to, and dealt with by, the FOS under the complaints procedure as explained above.
“Financial hardship” is not defined in the Banking Code. Financial institutions should consider complaints on a case by case basis, taking into account the information provided by the customer. Similarly FOS will consider the merits of each individual case. Section 14 of the Code and Guidance cover how firms should treat customers in financial difficulties.”

I hope this is helpful to you and the CAG.

Regards,

Mrs Hilary Putt

Helpdesk Manager
Banking Code Standard Board
CONFIDENTIALITY NOTICE
We would ask you to treat any communication from us as confidentially as you would want us to treat communication from you. If you are not the intended recipient, please notify the sender immediately, and do not use, disclose, print or forward this email or any part of it. You should know that some of our communications may contain confidential information which it could be an offence for you to disclose or use without authority.
Banking Code Standards Board Limited, Level 12, City Tower, 40 Basinghall Street , London, EC2V 5DE
The Banking Code Standards Board Limited, Company Limited by Guarantee, Registered in England & Wales, No. 3861859. Registered Office: 21 Holborn Viaduct, London EC1A 1DY
www.bankingcode.org.uk

[scoobydoo]

Re: Hardship cases

iHi thanks for your comments

I agree the whole area is fraught with difficulties exaperated by the fact that the banking code is as I understand it voluntary and not binding - and each bank can set their own criteria ( often not written down anywhere) which neans if an applicant is refused help they really have little recourse as a concrete reason for refusal may not be given.

I appreciate your comments regarding the Fos - but as far as I understand in the A&L case they did give some good pointers for the wording of the letter. Of course each case should be personalised and I dont think that standardised letters always are successful - however if it is of any use here is a draft letter drawn up with lots of help which may contain some paragraphs that people could use if they want to try the direct strategy again - and then the FOS. After all it costs nothing and may be worth a try - Next step bad publicity - hit them where it hurts!


To XXXXbank

From XXXXX
Reference account number XXXXXXX
Dear sir / madam
I refer to previous correspondence on the above account and wish to draw to your attention a condition of the waiver of claims regarding Overdraft charges . This is an extract from:
FSA waiver statement 27/7/2007 & Memo to Treasury select committee 9/10/2007
“Consumers can still complain about new charges incurred.
Consumers who have received a final response from the bank/building society which does not include an offer
Consumers still have the option of complaining to FOS. However, the banks and building societies have also requested that the FOS does not consider any complaints about unauthorised overdraft charges until resolution of the test case.
Consumers who are in very difficult financial circumstances - 'hardship cases'
Banks and building societies will have to conduct a filtering process to ensure that cases of genuine hardship are still dealt with during the waiver period. Cases of hardship would still be entitled to be referred to, and dealt with by, the FOS.
Consumers who want to complain to the bank/building society about other issues
Consumers can continue to use the existing complaints process to seek redress about other financial matters, such as insurance, mortgages and current accounts. However, if their complaint relates to the level, fairness or unlawfulness of unauthorised overdraft charges, that element of the complaint will be registered but not dealt with.”
Also as I am sure you are aware the banking code requirement for banks to deal with persons in financial difficulty sympathetically and positively has not been affected by the waiver.


I feel there is nothing to be gained at this point from questioning the level of charges applied; my position is merely that the agreement reached between the banks, FSA, FOS and OFT prior to the OFT v banks case being submitted to the High Court at the end of July clearly states that responsibility for determining and resolving a ‘hardship case’ lies with the bank, that the waiver granted to banks, allowing complaints re charges to be held pending the outcome of the High Court case does not apply to ‘hardship’ cases, and banks should therefore seek to identify and resolve such cases; further that where agreement cannot be reached between a customer and a bank the bank must issue a final response letter as a precursor to the FOS seeking to resolve matters.

My further position is that I firmly believe it will be possible for you to address my concerns such that I deem the matter settled negating any need for involvement of the FOS or closer to home the continued involvement of the Chief Executives office.

I am therefore (again) identifying myself to you to one of the cases where the excessive charges have been a cause or have worsened my present position . I (again)attach a summary of my present position for your consideration. As my case has now been in progress for XXXX weeks I would appreciate an early response.
I am sending a full copy of this letter to the FSA and The FOS .If you are unwilling to consider my request then you are under obligation to a written response indicating that you do not consider my case to be one of financial hardship and the reasons why. I will then consider my next course of action in consultation with the FOS/FSA
I would point out there has been considerable correspondence and phone calls concerning this matter before – and I regret having to bring this to your attention again ( attach any written copies)
The fact that I have commenced legal action is not a factor as the ability of the banks to request stays was made with proviso that banks would continue to consider hardship cases.
The basis of the financial hardship I am experiencing is: - (attach Personal sheet see example)
As indicated, I do not, with respect, wish to revisit the question of the fairness of the charges, or of whether some element of each charge was fair.

I fully believe that my difficulties meet any definition or criteria of hardship.

Many thanks for agreeing to examine matters. I look forward to your reply.


Kind regards,




EXAMPLE ONLY USE YOUR OWN SHEET
AND STATE HOW THE CHARGES HAVE CAUSED OR WORSENED YOUR SITUATION
First of all outlined ill health that led to drop in income and eventually position where only income was state benefits
Secondly that my ill health is likely to continue for a time (add to both of these points as per your predicament)

Further points: -

the illness was accompanied by financial difficulties – initially I lost track of my financial affairs and failing to transfer funds between accounts to cover expenses or direct debits began to incur charges
thereafter, my sick pay ran out and charges began to occur as I did not have the funds to cover my outgoings or increased living costs caused by my illness leading to the worsening of my financial position
I now rely upon Disability Living Allowance (Higher rate mobility, middle rate care) and Incapacity Benefit resulting in my inability to meet many of my current financial commitments and I find myself unable to make a number of loan or credit card repayments, pay telephone bills (a vital link when you are incapacitated), or sustain many of the commitments we all have (car tax and insurance, home insurance , etc)
matters were made worse by charges continuing to be applied, and most recently, charges taking an account overdrawn, which in itself resulted in further charges

presently my state of health is not that good, - outline

In total £****** in charges have been deducted from the specified accounts, £**** from (account numbered) xxx
Clearly the deduction of such a large overall sum of money has done nothing other that worsen the financial difficulties and hardship experienced.

Were my legal action against bank xxx L (to recover the charges levied) have proceeded to Court I would have been entitled to claim statutory interest at the rate of 8% and Court fees of £120
This information and a full list of the charges applied to each account can be found in the attached spreadsheets

You will note that the overwhelming majority of the charges were applied before the deterioration of my health and financial circumstances.

I am willing to forego the amount I sought to claim for statutory interest and Court charges – in total £****

I therefore look to you agreeing to repay in full all of the charges levied and deducted from the specified accounts, namely, the sum of £*******

[scoobydoo]

Re: Hardship cases

Has the information been posted on here that an A&L case has just had the stay overturned on a hardship basis. Not over yet though as the bank have been given to the end of the month to produce bundle - if not claimant will get judgement. The solicitor was rapped on the knuckles for being badly prepared

Jan

[Kafka]

Re: Hardship cases

I know the case in question, but I don't think it has ever been posted here.

I did provide a link in Team Forum, I think, but it could probably do with a better coverage.

[iancognito]

Re: Hardship cases

I think this is 2 different ones? the one jan is talking about is currently in court, i think the one you are talking about has already been paid out kaf?

One thing I have noticed about A&L is that if you present them with a new situation, they will crumble rather than fight it, they seem to learn a lot from others but don't seem willing to test the water.

[scoobydoo]

Re: Hardship cases

Yes this is a very recent one - court case still proceeding - where would be the best place to post details .Still finding my way around

I am still a bit nervous about cross posting between sites - but I assume that goes on all the time?


Jan

[Celestine]

Re: Hardship cases

Post away Jan! We believe in as much info sharing as possible....it's only one other site that doesn't!

[Nattie]

Re: Hardship cases

scooby, we allow any links to charges sites without censure and without the use of a language filter. It is about information gathering and helping people not about anything else.

[scoobydoo]

Re: Hardship cases

Here is another case A&L who appear to have become "human"?????
I wrote one last letter to the bank saying that I had put my court bundle together. I asked them to reconsider my claim on an "individual basis" and not on the basis of charges being unlawful. I attached copies of my financial statement which includes details of my debt management plan, listing my creditors, monthly outgoings and income & expenditure. I explained that the charges were detrimental to my debt management plan. They refunded me immediately - £557!!! Hoorah!!! of course it's all gone on bills though...... :-0

[scoobydoo]

Re: Hardship cases

and here is the case referred to in post 6
Woolwich ct - a&L

Posts: 7



Re: my day in court
Firstly, thank you so much for your kindness in helping me.
A few weeks ago i recieved a letter from court saying cases all stayed because of testcase. I wrote to the court manager and said my case was also based on the benefits acts, outlined my financial hardship and asked judge to reconsider.
The court then allowed the case to proceed and date of 10th october given
I then got a letter from bank solicitor saying that they were going to ask for a stay on 10th october.
i phoned the court and was told that the hearing would be about the stay and the case.
I used a letter called a 'deny stay letter' from another site but edited to suit my situation and evidence and highlighted my severe personal financial situation again.
I prepared a speech concerning my financial hardship and brought supporting evidence into court. i also brought a file contain the court bundle.
in the court the judge asked the banks solicitor if he had read my 'deny stay letter' and gave him time to read it. he had hardly any of the papers i had sent through as a court bundle back in june. he failed to impress the judge with any of his arguments and had no paper work to back up any of his defences.
The judge asked me if I thought i could win my case based solely on the penalty charge issue and i pretended to be very confident and my paper work from the website made me appear knowledgeable.
i mentioned my hardship speech but the judge made it clear that i didnt need it as she had no intention of staying the case.
she asked me again if i could win the penalty charge argument. i lied that i was definate and she then gave the banks solicitor 28 days to produce documents about 'costs' i think and said that the court would issue an order and that was that. i certainly wasn't prepared for this outcome and just played it by ear. SCAREY STUFF

[scoobydoo]

Re: Hardship cases

If you can spread the news - one hardship case that had the appeal against the stay overturned - has done one last letter and a call to the FOS

Result the bank have called and started negotiations o the claim and started to make an arrangement about repaying existing debts.

Great - dont give up - keep trying the FOS - I think they are so under pressure they are calling the banks and just telling them to look at some cases or else!

will post full details when the case is public.

Jan

[iancognito]

Re: Hardship cases

brilliant news - do we have any idea which bank?