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Guidance to claims management businesses on Bank Charges Claims
Now that the Supreme Court has delivered its judgment on the bank charges case and the OFT has announced its decision on next steps you should be updating any customers who have claims for unfair banks charges. If your business sells claims packs you need to stop selling them until you have fully considered the effect of this judgment and the positions taken by the Office of Fair Trading (OFT), Financial Ombudsman Service and Financial Services Authority (FSA) – and that you can demonstrate to the Claims Management Regulator that you have done so, and that you can justify the basis on which you believe claims can still be made. In particular you should check that any marketing material hasn’t become misleading as a result of the judgment.
The Court has ruled that the fairness of charges cannot be challenged just because they are too high. The stay on claims has been lifted so the banks should have started processing claims. It is likely that they will simply reject all cases as a claim that charges are too high is no longer available to their customers.
After detailed consideration of the judgment and of the various options available to it, the OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations 1999 ('UTCCRs').would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation. The full OFT statement is appended to this note.
It will be some time before full effect of the judgment will be known. It is not yet known how the Financial Ombudsman Service will respond to complaints that bank charges are unfair on this basis. Both have indicated will consider the case carefully before giving full statements. In the meantime you can see what they and the FSA have said about the case by clicking on the links.
The full judgment can be found here.
22 December 2009
Now that the Supreme Court has delivered its judgment on the bank charges case and the OFT has announced its decision on next steps you should be updating any customers who have claims for unfair banks charges. If your business sells claims packs you need to stop selling them until you have fully considered the effect of this judgment and the positions taken by the Office of Fair Trading (OFT), Financial Ombudsman Service and Financial Services Authority (FSA) – and that you can demonstrate to the Claims Management Regulator that you have done so, and that you can justify the basis on which you believe claims can still be made. In particular you should check that any marketing material hasn’t become misleading as a result of the judgment.
The Court has ruled that the fairness of charges cannot be challenged just because they are too high. The stay on claims has been lifted so the banks should have started processing claims. It is likely that they will simply reject all cases as a claim that charges are too high is no longer available to their customers.
After detailed consideration of the judgment and of the various options available to it, the OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the Unfair Terms in Consumer Contract Regulations 1999 ('UTCCRs').would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation. The full OFT statement is appended to this note.
It will be some time before full effect of the judgment will be known. It is not yet known how the Financial Ombudsman Service will respond to complaints that bank charges are unfair on this basis. Both have indicated will consider the case carefully before giving full statements. In the meantime you can see what they and the FSA have said about the case by clicking on the links.
The full judgment can be found here.
22 December 2009
