Nick Clegg & David Cameron reply to Bank Charges open letter

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  • tobyblume
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    In addition to the issue of banks making unfair charges, there are also major issues in the availability (or lack of it) in deprived communities to access credit. Since 1974 (when the law was changed) it has been legal to charge whatever rate of interest you like for a loan. Many legal and regulated companies such as payday lenders and doorstep lenders routinely charge anything between 100% and 1000% (there are instances of interest of 1,000,000% being charged for loans!). This is in additon to the 160,000+ people who use illegal loansharks.

    The banks have had £bns of public money and yet little has been done to change the system and secure some public benefit in return. Labour and the Conservatives have talked a good talk but offer little in the way of fundamental reform. The Lib Dems may be more sympathetic but are still a long way off from presenting a clear vision of how banking regulation can be transformed to avoid the mistakes of the past that we're all paying for.

    A growing coalition of charities, community groups and concerned citizens are calling for reform of the banking system based on responsible finance.

    We feel amidst all the hardship a recession creates, there is an opportunity to improve things by changing the system.

    We'd love to hear from you if that sounds like something you'd like to see. You can find out more on Urban Forum's website.

    here's to the hope of something better!

    Toby Blume
    Chief Executive, Urban Forum
  • natweststaffmember
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    Tony are you in favour of more access to credit unions? or perhaps more financial education to those who do find themselves in financial hardship?

    Apologies if we are kinda skating close to being off topic.
    I have not worked for NatWest Bank since February 2009

    This username is no longer active.
  • Detail
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    Obviously, whilst I agree the bank charges are a scandal, Nick Clegg can promise anything because his political party will not govern nor have to bear the cost of any future decisions.
  • ProfessorX
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    darrylcornes,

    Maybe if everyone who thinks this voted for them at the next election, in protest against the others, then they might just win, so Nick Clegg will have to live up to his promises.
  • CHANGEyourMP
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    Obviously, whilst I agree the bank charges are a scandal, Nick Clegg can promise anything because his political party will not govern nor have to bear the cost of any future decisions.

    Agreed!

    Sorry Martin, but IMO automatic payouts will never happen because as long as these criminal bankers dig in, they know that it will save them something, damage limitation to there profits and bonuses is all they care about and weak MP's / Prime Minister's that have never paid a bank charge in their lives will not apply the required action, as all they care about is how much they have lost in expenses!

    BROWN/CAMERON/CLEGG it makes no difference!;)
  • rm84
    rm84 Posts: 51 Forumite
    First Post First Anniversary Combo Breaker
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    I just wanted to add another 'congratulations' to Martin for receiving such a positive response to his letter. Yes, we are all cynical of politicians, but as some have remarked, whether it is 'opportunism' or not, the support can still make all the difference to tackling this issue.

    And again, to echo others, it certainly isn't ridiculous to imagine that MPs read Martin's weekly email. Not to save money - although maybe, with all the scrutiny on expenses :-P - but to keep an eye on the current issues on the ground. MSE (and its supporters) has become a powerful force, particularly in this climate, and politicians would do well to keep their hand in. Smart move, I say.
  • ProfessorX
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    Non-individually negotiated contracts are not automatically subject to UTCCR. There are various exemptions, in this particular case, 6.2b, which the banks argue apply and it is this legal point the OFT and the courts have to clarify before they are in a position to uphold the law.

    Sorry for taking so long to reply, but I had to see a man about an Insurance Quote (another den of iniquitous unfair terms) and other stuff. I also had to check what 6.2b was, that you were referring to as there was no 6.2b in the 1994 SI 3159 nor in the original Council Directive 93/13/EEC of the 5 April 1993, which ordered all states to implement legislation by the 31 Dec 1994, which the UK failed to do.

    Atricle 6.2 of that Directive stated "Member States shall take the necessary measures to ensure that the consumer does not lose the protection granted by this Directive by virtue of the choice of the law of a non-Member country as the law applicable to the contract if the latter has a close connection with the territory of the Member States."

    However it seems that the 6.2b you refer to is from the SI 2083 of 1999 which superceded the 1994 SI, although not for contracts signed between 1 Jan 1995 and 1 Oct 1999 when the new one 'became effective'. But since people seldom change their banks most will still be covered under the earlier SI and the European Directive should nevertheless take precedent over all UK Instruments. Thus we must be able to claim back to 1 Jan 1995 ;).

    Nevertheless that 6.2b applies only after 6.1 is considered to the "main subject matter of the contract" and is drawn from Article 4.2 of the Directive:-

    "4.2. Assessment of the unfair nature of the terms shall relate neither to the definition of the main subject matter of the contract nor to the adequacy of the price and remuneration, on the one hand, as against the services or goods supplied in exchange, on the other, in so far as these terms are in plain intelligible language. "

    Given that the 6.2b you refer to was actually 3.2 a&b in the 1994SI and was Article 4.2 of the EEC Directive its no wonder we 'consumers' don't know our rights. Bureaucrats seem intent on making mountains out of molehills whenever they get the chance. Change is not always good :eek:.
    However, when the EEC wrote Article 4 they started it with these words- "Without prejudice to Article 7, the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded ..", which this State seems to have interpreted as Regulation 12 of the 1999 SI.

    To make life easier for others I'll repeat the first sentence of Article 7:-

    "Member States shall ensure that, in the interests of consumers and of competitors, adequate and effective means exist to prevent the continued use of unfair terms in contracts concluded with consumers by sellers or suppliers."

    as this didn't seem to feature in 1994 SI at all, unless making the Director General of Fair Trading (who is a waste of space) responsible for it all was their interpretation of it.

    But I also repeat here Article 3 of the Directive:-

    "Article 3
    1. A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.
    2. A term shall always be regarded as not individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term, particularly in the context of a pre-formulated standard contract.
    The fact that certain aspects of a term or one specific term have been individually negotiated shall not exclude the application of this Article to the rest of a contract if an overall assessment of the contract indicates that it is nevertheless a pre-formulated standard contract.
    Where any seller or supplier claims that a standard term has been individually negotiated, the burden of proof in this respect shall be incumbent on him.
    3. The Annex shall contain an indicative and non-exhaustive list of the terms which may be regarded as unfair. "

    So clearly as 'consumers' of 'banking services' have never been in a position to 'negotiate' any charges or interest rates on their accounts then all such 'terms' imposed on them for such charges are by any just definition 'non negotiable' and thus 'unfair'. Surely this applies to 'compulsory excesses' or 'voluntary' ones slipped in without notice on Insurance policies of all types?

    The second question arising from Article 7 is 'What is good faith?'. You may know that Schedule 2 of the 1994 SI set out what needed to be considered in assessing that in only 6 lines, but the Directive had 17 examples of 'unfair terms' (stuck in Schedule 3 of the 1994SI) all of which seem to me to reflect 'bad faith' on the part of the 'seller or supplier'. But as the Banks in particular have the World by the balls they get away with anything they damn well please. Are u 1 :p?

    The final BIG question arising from this is "What is the nature of the 'goods and services' supplied by the banks? Is it to help us manage our money fairly, safely and securely, or for them to dip their hands in the till to boost their profits on any excuse, even when they are at fault?

    So please stop trying to defend the banks which have been ripping customers off for decades because no Government has had the brains or the balls to bring them to heel. They missed their big chance in 2008, when they came 'cap in hand' for handouts to ensure greedy bosses could protect their unjustifiable salaries; 'bonuses' and personal pensions, to the detriment of even the staff's pay & pensions and all others rights too.

    Please don't make me angry again :D
  • Nathan_Spleen
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    You misunderstood.

    I'm not trying to defend the banks, just responding to what I understood you to say that all non-negotiated contract terms are subject to the assessment of fairness under UTCCR.
  • ProfessorX
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    Well I hope you now accept that all non-negotiated terms in any contract for the supply of 'goods or services' are subject to the UTCCR's. It's only the main subject matter and price or fee which I assume even the EEC assumed was already subject of negotiation that is excluded from scrutiny.

    However, since we don't have enough power to negotiate with most suppliers of goods and/or services I believe that even Europe is wrong on that matter too. I've even argued with the State that they have no right to sign up to the European Convention on Human Rights because it excludes many rights we are due under the Universal Declaration of Human Rights. One of those rights is the right to equal pay and a decent lifestyle.

    Bankers only look after themselves, so violate that Declaration too, along with the States which support them in every act they do against others.
  • Nathan_Spleen
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    ProfessorX wrote: »
    Well I hope you now accept that all non-negotiated terms in any contract for the supply of 'goods or services' are subject to the UTCCR's. It's only the main subject matter and price or fee which I assume even the EEC assumed was already subject of negotiation that is excluded from scrutiny.

    No I don't accept that all non-negotiated contract terms are subject to UTCCR and you've just explained why in your second sentence.
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