MSE News: Bank charges crackdown included in coalition government agreement

They have gone back on their pre election statements/ promises now they have got what they wanted and are in power.

Its nice and easy to make soundbites geared to win votes then forget the promises made.

Here is what they actually say:

5. CONSUMER PROTECTION

The Government believes that action is needed to protect consumers, particularly the most vulnerable, and to promote greater competition across the economy. We need to promote more responsible corporate and consumer behaviour through greater transparency and by harnessing the insights from behavioural economics and social psychology.

• We will give regulators new powers to define and ban excessive interest rates on credit and store cards; and we will introduce a seven-day cooling-off period for store cards.
• We will oblige credit card companies to provide better information to their customers in a uniform electronic format that will allow consumers to find out whether they are receiving the best deal.

The Coalition: our programme for government [FONT=Gill Sans MT Pro Medium,Gill Sans MT Pro Medium][FONT=Gill Sans MT Pro Medium,Gill Sans MT Pro Medium]13
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• We will introduce stronger consumer protections, including measures to end unfair bank and financial transaction charges.
• We will take forward measures to enhance customer service in the private and public sectors.

So, lets see what what happens.

Interstingly, they refer to "unfair bank and financial transaction charges."

They do that when banks have generally reduced bank charges and made them a bit easier to understand. They do that after the Supreme Court decision. That seems interesting.

natweststaffmember wrote: »

Unless the case was referred to the ECJ for clarification on Unfair Terms Directive from 1993 which is UTCCR 1999. That would be superb news.

However, I am sure banks would argue that their charges have been tested for fairness and they are not unfair so it will be interesting how they lobby on this one.

Who would refer the case to ECJ?

Oh, well pardon me Nattie for breathing.

Yes I did Dunstonh post, I normally read his posts on charges.

What I am not clear on is the process that takes the issue back to the court (which has already taken a decision, albeit one we think is flawed), that leads the court battle and for them to refer it to ECJ.

Thanks Nattie, lets see if we can find an answer to that then.

Here is a BBB News item.

http://news.bbc.co.uk/1/hi/business/10130671.stm

'Unfair' bank charges to be banned, government proposes


Page last updated at 13:37 GMT, Thursday, 20 May 2010 14:37 UK

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The plans will rein in bank charges and excessive credit card rates An end to "unfair" bank and other financial transaction charges are among the new policies that have been set out by the coalition government.

Last year, the Office of Fair Trading suffered a high profile legal defeat in its attempts to regulate bank charges.
The government's plans also include powers to ban "excessive" interest rates on credit and store cards.

Among the other measures are a promise to give homeowners more protection against "aggressive" bailiffs.
Courts will also be told that repossessions must always be a last resort.
Continue reading the main story Martin Lewis Moneysavingexpert.com 'Historic' deal The plans policy-by-policy

Under another proposal, people taking out a store card for the first time will be given a seven-day cooling off period, which is aimed at stopping some people getting into debt in the first place.

Reaction Marc Gander of the Consumer Action Group, a leading campaigner on bank charges, welcomed the government's commitment, but said it would be important to see the detail.

"It [the government] does not define 'unfair' or say what protections will be granted overall," he said.
Martin Lewis of Moneysavingexpert.com also welcomed the new policy.

"I expect pressure, especially on the state-owned banks, to sharply reduce their charges," he said.
"If they don't play ball, the government needs to legislate to make this happen."

The British Bankers' Association played down the implications of the government's threat.

"The OFT has already looked into bank charges and in March this year reported that 'real progress' is being made by the industry in making current accounts work well for customers," said a spokesman.

"Competition is driving down the cost of other accounts that provide a whole range of different features as part of the package," he added.