Nick Clegg & David Cameron reply to Bank Charges open letter



  • nathan0578
    When I acted as guarantor for my son to buy a business everything was fine for 5 years then a new manager insisted I take out an insurance policy, against my wishes to cover the loan.The threat was implied that the overdraft facility could be withdrawn at any time but was safe if the insurance policy was in place,thus blackmailed we had to comply.I have been bitter ever since about this extra burden on a small business.
  • ProfessorX
    I've been too busy, or sick, to follow up Martin or natweststaffmamber's replies to my last post, before now, but her goes.

    Martin, if we have to take these issues one at a time, then we'll be here till eternity trying to get anywhere. My old man would have said that the OFT needs a stick of dynamite up their a***, and after having dealings with them and the local Trading Standards office (which are funded by Council Tax and are not directly part of the OFT I've been told), I'd tend to agree with him now.

    The OFT have legal authority to seek injunctions to stop 'unfair terms' being used, so when have they ever used them? Please ask them to tell you, on all of our behalves.

    To Natwest... I'd like to ask, Why do you think the Banks are even being allowed to challenge whether or not the UTCCR's apply, when they clearly do? I have read the original 1994 Regulations and the European Council Directive 93/13/EEC on which they were based and I've seen nothing to support the Bank's claims that they don't apply to these charges/penalties. I found the latter on the euro-lex website under reference number 31993L0013, so maybe you should read that. I'd draw your attention to these lines in the preamble in particular:-

    "Whereas, in particular, the laws of Member States relating to unfair terms in consumer contracts show marked divergences;
    Whereas it is the responsibility of the Member States to ensure that contracts concluded with consumers do not contain unfair terms;" and
    "Whereas, however, as they now stand, national laws allow only partial harmonization to be envisaged; whereas, in particular, only contractual terms which have not been individually negotiated are covered by this Directive; whereas Member States should have the option, with due regard for the Treaty, to afford consumers a higher level of protection through national provisions that are more stringent than those of this Directive;"

    So do our regulations do better or worse for consumers in the UK compared to other EU countries?

    Article 7 of that Directive did not even limit this protection to only being available in courts as they included an option of "competent administrative bodies" which of course we don't have in the UK, including our courts.

    Article 10 of it stated that this protection should effectively begin on 31st Dec 1994 for all contracts concluded after that date. Our first UTCCR's didn't come into force until 1 July 1995. The final example, in the list of unfair terms, includes this one:-

    "q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract."

    This might well apply to the Civil Procedures Rules which are no doubt being cited as the excuse for the 'blanket stay'.

    Personally, I think the ruling that they are not penalties is wrong, because they're not for 'services rendered' are they? Nevertheless that is a red herring too as I can see no mention of any different treatment in the UTCCR's even if they aren't. Nor are they the main subject matter of the contract, so not exempt from the reg's! Or is that another of their flase claim too?

    However whatever they get away with claiming they are, they must surely fall into this description of an 'unfair term' namely "requiring any consumer who fails to fulfil his obligation, to pay a disproportionately high sum in compensation". For example going overdrawn by 20p or if a Direct Debit is taken out too soon etc. leaving your account short by £20.

    So even the House of Lords Judges must surely see that being arbitrarily charged £20 or £30 or more for any minor infringement of 'standard contract terms' is fundamentally unfair as I trust you'll agree. Unless they're on the take, like one of the other members of the House of Lords recently fronted up to, whilst claiming he was doing nothing wrong, just like our MP's over their expenses. I don't recall his name but he admitted being paid to support some legislation for a 'client/employer' I believe.

    I've decide for myself, as I'm sure everyone else has, that banks have been unfair to customers and still are and we don't need any House of Lords telling us anything different. Savers are currently getting nothing from their savings yet lending rates do not reflect the base rate of 0.5% either, do they? That's simply profiteering for the banks, so the big wigs can claim more super bonuses again.

    Who the hell are they to dictate our rights anyway? They're clearly all corrupt and useless. This case should have been settled in one day, but for the fact that the Banks employ Barristers, using our money, to defend the indefensible, to the incompetent.

    As for Human Rights issues, I don't think you understood my comment on Article 17 of the Convention or Article 30 of the Declaration. I've taken this up with the Minister of Justice who can't or won't address the issue either. The State claims that the HRA '98 doesn't apply to 'companies' or 'individuals' which disregards Article 17, which encompasses all States; groups or persons and prohibits them from "engaging in any activity, or performing any act aimed at the destruction of any of the rights and freedoms" of the Universal Declaration, but that's exactly what the Convention and the HRA do, as they ignore many of those rights.

    Furthermore, in the Declaration it stated that "every individual and every organ of society", which I assume even the banks might also claim to be, must keep that Declaration "constantly in mind" but which Company or Government has ever done that? I believe the answer is none, and since the current Ministers can't say when or how, or if this State ever did so, or that it complied with the promise to educate the masses on what rights they had, then to date my argument on this point still is not refuted.

    Courts are bound by the HRA'98 even if it is a corrupt law, yet they don't apply that either. Sections 3 and 4 (according to MoJ stats) have apparently only been considered in a handful of cases even though they should be applied to every case before a court. That explains to me, why it is that County Courts are fobbing people off with this nonesense of 'blanket stays' which just allows them to avoid working. How can that be fair, as long as the Banks are allowed to 'Carry on Charging' ?(a good name for a comedy film eh?) All rights reserved.

    It simply shows the bias of English Law, which has only ever been based on State 'authority' and its claims to judge us by some false, God given right. The motto of the Ministry of Justice is still "Dieu et mon droit", which simply means 'God and my right' (being the divine right of kings). This is post 1066 policy and not fit for the 20th Century, let alone the 21st. The Justice department have shrunk it down to nothing from embarrassment I suppose on their letterheading.

    The only other pillar of laws in England has been the rights of landowners or 'men of property' since 1649 to run Parliament and dictate to 'the poor and unwashed masses', which is hardly based on human rights is it? I believe the OFT or some other 'competent body' should review all 'standard contracts' before any 'seller or supplier of goods or services' is even allowed to use them and they should not work in their favour to soften consumer protection by doing so either.

    I need to go to bed now, so goodnight to all and to all a good night.
  • Nathan_Spleen
    Isn't it a bit late in the day for all this? We're at 5 to midnight on a decision from the highest court in the land on the matter.
    ProfessorX wrote: »
    The OFT have legal authority to seek injunctions to stop 'unfair terms' being used, so when have they ever used them? Please ask them to tell you, on all of our behalves.

    They have. Try OFT v Foxtons
  • Nathan_Spleen
    Angela Knight OBE, Chief Executive of the British Bankers Association, has written to Nick Clegg in response to his letter to Martin Lewis.

    Dear Nick,

    Having read reports of your views on the current court case on unarranged overdraft fees, I thought it would be helpful to make you aware of the facts.

    I have used the expression "unarranged overdraft fees" as of course most people either make their overdraft arrangements first, or do not have an overdraft in the first place. Only a minority borrow money that they haven't got without making arrangements first. More education in this area - and with financial issues generally - can only be beneficial and if you wish we can arrange with pleasure for you to see some of the projects that the banks either run or support.

    However, the position of unarranged overdraft fees within the UK's regulatory and legislative framework is far from clear. This has come to the fore as the UK has implemented the European requirements known as the Unfair Terms in Consumer Contracts Regulations (UTCCRs) in a way not only different from other countries but also resulting in uncertainty over what is covered by UTCCR and who has responsibility for deciding what in a number of areas.

    As a result, seven banks and one building society proposed to the OFT that we should approach the courts for a decision on whether and how the UTCCRs might apply to this issue. The current case therefore is first about whether unarranged overdraft charging terms can be assessed for fairness under the UTCCRs (where we await judgement from the Law Lords) and second, if the charging terms can be assessed for fairness, whether the terms are unfair. The case is not about what an unarranged overdraft fee should be, nor - given where we are in the legal process agreed with the OFT - is it at this stage about whether they are fair.

    You have been reported as saying that all unarranged overdraft fees should be paid back. I am sure that must be incorrect as you will be aware that the cost of providing the service is significant and one that customers would not want to see withdrawn. The courts have already acknowledged this at earlier hearings. The default rate on these overdrafts is significant too. The 80 per cent or so of borrowers who made their financial arrangements before borrowing are not surprisingly concerned that the commentary too often sidelines them in favour of those who did not.

    As an industry we seek to be fair to all our customers. We are concerned that this particular issue is too often wrapped up in soundbites which are neither fair nor helpful to the many people who have an interest in this issue.

    Yours sincerely,
  • Alpine_Star
    Alpine_Star Posts: 1,354 Forumite
    First Anniversary Combo Breaker First Post

    Now that David Cameron has announced that he intends to give Angela Knight a seat in the House of Lords should the Conservatives win the general election, will you reconsider allowing a Tory government the power to negotiate a settlement?
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