The government can now order the banks to drop OFT case Appeal & return all charges

jclancy

Fair point, natweststaffmember.

As to the past, full refunds would actually be the cheapest and most straightforward and most litigation-avoiding route: if necessary, ex gratia and without admitting liability. It would also help in the quantitative easing injection of liquidity into the economy at the full amount: seriously!

As to the future: legislation. The legislation will state that the OFT will determine each year what is 'fair' and that binds everyone, just like the minimum wage. You can't really sue on that. The law will be the law. A business can't go to court and say it believes the minimum wage is too high or unreasonable; the same would apply to bank charges.

So, my estimate: returned direct debit or cheque: 40p; overdraft fee 50p on the first day overdrawn and any first subsequent day upon which it increases, to a maximum of £3.00 per month. Charges not to be accumulated into the account for the purposes of assessing future overdraft charges, but may be deducted by the bank from a positive balance. Let's not complicate things, especially with lawyers.

Everyone, including the banks, will know where they stand.

The concept of the guaranteed cheque (even the cheque) seems to be disappearing, so the major past reason for banks actually paying out to take an account overdrawn is becoming an historical matter, anyway. Indeed there is no longer any reason for a bank to allow an overdraft to be exceeded at all, as long as bank charges are kept separate for this assessment. It becomes a separate debt, but deductable on payment into the account below the overdraft or into a positive balance where there is no overdraft facility. So we are really only talking about returned item fees in the future.

I'm not sure, Nathan, that blind trust in the judiciary (especially 'above all else') is an everyday option for money-saving, never mind economic and social justice. They are the servants of democracy and the primary and secondary legislation which emanates from democratically-elected representatives. They also apply that part of the common law in our non-constitution-based democracy which remains unamended by legislation. Judicial determinations and clarifications of the common law and legislation hold only until that such is amended by legislation or (and preferably always) confirmed by democratic primary legislation.

They should not be seen as some primary source of law. And don't get me started on how the judiciary has been and still is actually 'appointed'.

This is to the point, though: when the banks got bailed out and supported by massive amounts of our money, and when the deliberate actions of their officers and some employees now leave hundreds of thousands of people facing unemployment and despair, well, the game changed. How banks have behaved and intend to behave is no longer some an arcane legal or commercial or consumer issue: it has become a matter of politics and public policy. The bank charges cash-cow was itself part of of the wider irresponsible, unlawful actions of the banks in their business models, and sharp practices and procedures.

The world has changed drastically, and the role of the banks in it even more drastically. And it will continue. I believe very few of the British retail banks will survive even this year without further massive recapitalisation and/or, indeed complete nationalisation. We're not talking any more about some free market, commercial matter to be sorted out in some mercantile court.

You and I are now, through our government, significant and/or majority shareholders in most, and massive guarantors of ALL the UK banks, and they should start behaving like they acknowledge this. It's a new industry. They shouldn't even need UKFI or the government to instruct them. They should realise that they now have a responsibility to the British people, never mind just their own customers. The party's over.

They should do the right thing to show that they don't just say sorry, they act sorry and they act gratefully for us saving their sorry assets: give up the bonuses, drop the court case and return the charges.

They know what they are and who they owe them to. What's with the wait?

jclancy

And Nathan: sorry the picture disappeared. I thought it was quite funny!

Nathan_Spleen

jclancy wrote: »

And Nathan: sorry the picture disappeared. I thought it was quite funny!

Not half as hilarious as ''The government can now order the banks to drop OFT case appeal & return all charges''.

On a scale of 0 to 10, what do you think the chances of this happening is? I'd genuinely be interested to know.

jclancy

I'd say 6/10. But the window of political opportunity is brief, then it will be 2/10.

We need to piggy-back bank charges onto bonuses now in politicians' and media minds. That takes people believing in and being prepared to fight for the issue rather than assuming 'it's never going to happen'. I hesitate to say it, but ,"Yes we can!" is the zeitgiest of the moment and it applies here.

I also think that the OFT decision could scupper things, especially if it starts to talk of pounds rather than pence. If we get to £10 then that is the end of a full return of charges. It will be difficult to argue for that then.

The problem is that the OFT will be making its decision based on the old world, not the new. 'Fairness' means something else these days. That's the problem. The OFT hasn't got the new frame of reference the rest of us have because that's not in the terms of reference given it.

I'd rather the OFT delayed their decision until the position of the banks' future is cleared up. In the meantime, we press (we don't wait for others - all of us, everyone on this and other campaigning sites) for policy change both as shareholders and at government policy level . We should change the OFT terms of reference now to take into account the new context that has emerged.

Write/email your MP, and the government now. Suggest that the bank charges issue is an UKFI issue. It's not a party issue, either. They will all be influenced by this. You have to get a head of steam going. They will be influenced by the argument that we are paying the fees on all sides for the right for the banks we now own (a more persuasive argument this morning after the Lloyds meltdown) "to prove they have a right to be unfair". We need to use those words.

Another window of opportunity is that the government is genuinely looking for ways to inject liquidity into the economy (in the absence, just by the way, of the banks themselves stepping up to the plate). That won't be the case by the time the test case gets to the house of Lords, even Europe. It will be a neat idea that some of the money that the banks were meant to have used to get money into the economy, but they just used to hug to themselves and their asset base (we over-recapiltalised them by at least 2%, I believe), actually found its way into the economy. The banks are extremely likely to eventually have to give at least half the bank charges back if the OFT and then the courts determine they were unfair. We get more bang for our buck now!

The irrelevace of this case is mind-blowing, they are all (especially the lawyers and judges who will still profit handsomely from continuance of the 'how many angels dance on a pinhead' kind of irrelevant arguments based on a world which no longer exists!) fiddling while Rome burns. There may be no banks left by the time this gets to the House of Lords, for goodness sake. But at least there'll be a nice legal argument sorted out!

When I wrote last night that I thought the British banks might all be nationalised by the end of the year, I didn't anticipate waking up this morning to the news that our preference shares in Lloyds are clearly going to become ordinary shares and we will own Lloyds by the end of the month, never mind end of the year. But that how febrile and uncertain things are.

So we are likely to own Lloyds and HBOS; we already own RBS, and Clydesdale I believe. Barclays indicates that is going to come to us for £6.5 billion. That is 5 of the 8 banks in the test case in our pockets. Only HSBC and Abbey (whose loans to each other and other banks we have guaranteed by us and who will, I am sure, have used the Bank of England's Special discount window facility for liquididity - we put about £250 billion of our money at risk for this) remain as litigants without us as majority shareholders. And as for Nationwide Building Society, they should be ashamed of themselves for having joined in and associated themselves with the others in assertting their right to be unfair.

We have to involve the Bank charges and bonuses issue as the Quo for the Quid.

O.K. so we may not persuade our politicians to move on this one, but Consumer Protection legislation in the USA and Europe (the protections that this site and Martin Lewis holds so dear) came as a result of ordinary people applying seriously organised political pressure, not sitting back and saying 'It's never gonna happen!

We've possibly got 2 weeks to pile on the pressure.

Here endeth yet another lengthy sermon - sorry!

natweststaffmember

But the heart of the bank charges dispute is about unfair terms in consumer contract regulations 1999. You cannot simply have a one size fits all. Remember, the OFT are not a law making entity and I suspect that the government cannot legislate on bank charges. I am not sure that as we are in an automated age that you are not increasing the cost ratio of banks by stating that the bank cannot accumulate charges or if they could, they cannot take out the money until it is in credit. Not all of us are honest in this world. There are people who would take advantage of that system. Not saying people ARE taking advantage of the current one, but that you potentially COULD do it under the system you propose. Think of the practicalities and the changes in IT that would be required and the additional cost of the changes you propose. I would suggest perhaps that you propose a government owned bank specific, ie National Bank for example, to run alongside the other banks and if it then becomes popular, then other bank would perhaps change their own policies. That may be a better model The article has to think about the practicalities of contract law and the way it will work including EU Law and the impact it will have across all contract terms. The practicalities of it and the actual costs or additonal costs it will take to change the infrastucture. refunding charges is one thing, changing the whole framework is a different matter. It cannot be done rapidly.

olly300

simon_templar wrote: »

When they say 'the banks' please remember there are some banks who have not written off toxic debts and have not used any govt handouts.

Yep.

Nationwide is involved in the case and it is a building society so it has no share holders.

Nathan_Spleen

jclancy wrote: »

I'd say 6/10......... We've possibly got 2 weeks to pile on the pressure.

Here endeth yet another lengthy sermon - sorry!

So you've plugged this idea on at least 3 forums - 2 of which actively campaign against bank charges - for at least 5 days. On the evidence before me not a single respondent as indicated they'll be writing to their MP in support of your idea to urge the government to comit political suicide.

Yet somehow you believe the chances of success are better then average.

Does your mother know you're on the internet?

devils_advocate

jclancy wrote: »

We've possibly got 2 weeks to pile on the pressure.

Here endeth yet another lengthy sermon - sorry!

Don't apologise- this mixture of naivety and twisted logic is one of the most amusing and entertaining things I've read in a long time!

Got any more?

JamieD_2

Ignoring the argument about the rights and wrongs of bank charges for now, it seems that the main thrust of the article is that:
- the OFT case costs money
- if the verdict is in the OFT's favour, the government will effectively be paying out a percentage of the results of the verdict

As has already been pointed out, not all banks and building societies involved in the test case are partially government owned. It's not entirely fair to them that the dispute should be shut down and blanket refunds enforced. While the state can intervene in almost any commercial matter, this does not mean it should. Governments lay down in their guiding principles in legislation, such as fairness in commerce, and it's up to the judiciary to interpret that in individual cases. Both parties involved get the chance to argue their case.

Arguing to shut the case down now because of public opinion doesn't seem a million miles away from "this criminal doesn't deserve a trial - let's lynch him now and save the taxpayer money"


Two other minor points

"We need to piggy-back bank charges onto bonuses now in politicians' and media minds"

I would have thought that if the issues you raise are so clear-cut, that doing a "bait and switch" would be unnecessary. Bank charges are completely unrelated to either bonuses or the huge write offs and trying to use the latter to agitate and inflame public opinion seems to be a teensy bit misleading

"the lawyers and judges who will still profit handsomely"

Unless he's been taking tips from certain members of the Lords, I'm not sure how the judge could profit. Unless he's had a lot of overdraft charges, of course

dzug1

Nathan_Spleen wrote: »

''The government can now order the banks to drop OFT case appeal & return all charges''.

Well regardless of whether it can or can't, it may not actually WANT to. It could equally well order the OFT to shut up about bank charges.