Confused by Barclays' offer: what are they referring to?

[Deleted User]

Hello,

I applied for a refund of all PPI + bank charges from Barclays (two separate letters) and received a 'goodwill payment' of £375 into my account last week.

I've now received the letter and this is what it says (the key paragraphs):

"I am writing further to your unauthorised overdraft charges complaint and your financial difficulty claim made on 30 July 2009"

"Having reviewing the information available, I confirm I have accepted your claim of financial difficult which will be paid as detailed below:"

"I confirm the sum of £326.25 will be transferred to your account number XXXXXXXX today as a gesture of goodwill. I have no closed your financial difficulty claim."

"Your complaint regarding unauthorised overdraft charges will be dealt with once the legal proceedings between the banks and the Office of Fair Trading are concluded".

It's this last paragraph that confuses me. Are they referring to their 'reserve fee' issue in this final paragraph (which they've already advised they are going to refuse to refund)? Otherwise, surely by accepting my financial hardship claim AND paying out, they are obliged to pay out for unauthorised overdraft charges regardless of the waiver? If they are refusing to pay out for unauthorised overdraft charges, what is the £326 being paid out regarding?

Does that make sense?

moneypot

Hi there

I am also in the same situation with Barclays, they have paid back half of the charges that I have claimed for and in the letter it states that my financial hardship claim has now been closed.

I wondered if anyone could advise on what to do next as I am not happy waiting for them to repay the other half and like you say they have confirmed that I am in financial hardship so why not pay it all back rather than half of it....

Do you know what needs to be done next as regards to writing another letter requested what they owe you?

Jackie

esmerellda

How much is your overall charges claim for?

All they mean is the difference between what they have paid and the overall claim plus compensatory interest will be paid after the test case (should it be in our favour).

They word it like that so as not to admit any liability.

esmerellda

If you are in hardship they will usually pay a sum which covers the charges incurred during the financial hardship period, or cover arrears, or help you cover the shortfall in your income for a couple of months.

If you turn it down they will put the whole lot on hold till the end of the test case so letter wise, if you feel the offer doesnt help or go far enough, say that you accept the offer and it will go against X,y,z but you still have a,b,c so could they consider a further payment for that.

[Deleted User]

Hold on a minute here; all of these comments are helpful, but are we all missing the key point?

I claimed £465 in total - and they have deposited £326 into my account. They did this prior to me receiving the letter, so I had no opportunity to 'consent' to it.

I claimed financial hardship - and they accepted this.

IF they accept financial hardship (which they have), then the waiver does not apply. So, are they legally not required to consider the claim? i.e. even though they have made a goodwill gesture for part of the claim, they now must consider the remainder immediately and either accept/decline that, or else they are not following the OFT's ruling?

Otherwise, it's akin to them saying 'if we pay you 75% of your claim, we believe you are no longer in financial hardship and so can put the remainder of your claim on hold', which is contrary to the waiver itself. You're either 'in financial hardship' or you're not; and if a bank accepts financial hardship then it applies in entirety: 'I am a financial hardship case'. It can't partially accept.

Surely, that's the key issue here and is the basis for a response advising that they must consider my full claim?

My only other question is whether their letter is just very badly worded, and the bit they are holding back is the amount of charges paid under the 'reserve fee' which Barclays (specifically) are disputing falls under the waiver?

[Deleted User]

Am just on the phone to the OFT now, will post in a sec.

esmerellda

Nope. They do not have to give you a single penny under the financial difficulty exemption to the waiver. They have to consider your case and consider a refund (will get quote) that is all. And for Waiver breaches you want to be talking to the FSA.

esmerellda

Here

FSA Letter to all firms using waiver - dated 19th March 2009 - other info on this letter FSA do not intend an injunction against destruction of data post July 2001 - Legal Beagles

Quote: Amethyst
Originally Posted by FSA letter 19th March 2009

---

ANNEX - FINANCIAL DIFFICULTY

minimum standards for handling complaints where financial difficulty (FD) is claimed

I)firms to use their own records where available (eg. account activity and existing borrowing), to consider intially if the customer might be experiencing FD

only when this cannot be determined will it be appropriate for a firm to gather more information ie. issue an Income Expenditure form (''IE form'') 9FSA accepts that in a majority of cases it will be necessary to issue a Ie form in particular before considering/rejecting a claim of FD.
nb. firms are also refered to 14.4 and 14.5 of guidance to the banking code.

II)if an IE form is issued the firm to provide a reasonable period of time before issuing a closure letter to the customer which should clearly explain the reason why the firm has not accepted the customer is not in FD and that the firm will reopen the case should the customer subsequently return the IE form

III)where an IE form is returned it is to be reviewed by adequately trained and experienced staff to assess if the customermight be experiencing fd and the extent of the problem. staff should be able to interpret information to make an informed judgement which is clearly documented and in line with internal policy and guidance (including considering if a customer may have under declaared their outgoings) an appropriate course of action should be taken dependant on the extent of the problem IE. some customers may only require guidance on what to do, others may require more immediate action.

IV) any correspondance issued to the customer that provides detail of the decision taken by the firm must be compliant with disp requirements eg. it should clearly explain the outcome of the investigation and the rationale for the decision and provide details of how to investigate the complaint if the customer is not happy with how it has been resolved. (this included cases rejected because the customer did not return the ie form)

V) firms to provide a range of measures to support customers and to treat them positively and sympathetically
nb2)firms are also refered to sections 14.2 and 14.3 of the guidance to the banking code.
these might include: help and guidance about dealing with fd and avoiding charges; suspending collections and recovery activity; suspending accrual of further interest and charges; consideration of a refund of charges, in particular where the charges may have added to the FD during, or immediately before, the period of FD. The rationale for why a particular level of refund has been given should be documented and clearly explained to the complainant.


The minimum standards are not handbook guidance but rather update firms on the findings of good practise from our thematic review of the handing of unauthorised overdraft complaints.

The minimum standards do not purport to define the suitability standards for unathorised overdraft charge complaint handling. Firms should have regard to the minimum stndards in deciding what action they need to take to complay with the FSA handbook and the waiver. There may be serval ways of complying with the regulatory requirement and folowing guidance or other materials we publish such as the letter issued on 13th november 2008 is only one approach. for further information please refer to the section on fsa guidance and supporting materials in our enforcement guide paras 2.22 to 2.27 ( FSA Handbook - Full Handbook ) actually __> http://fsahandbook.info/FSA/extra/5149.pdf

A firms senior management remain responsible for establishing and implenmenting effective controls over unauthorised overdraft charge complaint handling..



__________________

[Deleted User]

Hello - I've just spoken to the OFT and then the FSA/Ombudsman.

They think that the letter from Barclays is confusing and they would like to take a look at it.

As Esmerelda has pointed out above, the obligation the banks have is to consider the financial hardship case, but as per the post above if a candidate is in financial hardship they must 'provide assistance' with the claim. They must also provide reasons/rationale for their thinking.

Barclays - it might be argued - have provided some assistance with the goodwill gesture, though the Ombudsman thought it was odd that they've paid out part of the claim and then put the remainder on hold. It also makes no sense to reference the waiver as the case does not fall under the waiver - and as discussed above - if they accept financial hardship then they must at least 'consider' the claim and not 'consider part of it but not the rest'.

Here is the full text of my letter from Barclays:

Dear Mr XXXXX

I am writing further to your unauthorised overdraft charges complaint and your financial difficulty claim made on 30 July 2009.

Having reviewed the information available, I confirm I have accepted your claim of financial difficulty which will be paid as detailed below.

I confirm the sum of £326.25 will be transferred to your account number XXXXXXXX today as a gesture of goodwill. I have now closed your financial difficulty claim.

In addition to this gesture of goodwill we may also be able to provide guidance to assist you in other ways to manage your financial situation. Please contact our specialist team Consumer Finance Debt Management on 0845 300 0442 should you wish to discuss this with us.

I have also enclosed our leaflet "How to keep your finances on track". Alternatively, you may wish to speak with a debt counselling organisation and their detailed can be found in the attached Banking Code.

Your complain regarding unauthorised overdraft charges will be dealt with once the legal proceedings between the banks and the Office of Fair Trading are concluded. Your complaint reference number is XXXXXXXX.

This gesture of goodwill relates to the following accounts:

1. XXXXXXXX
2. XXXXXXXX

In the event that we are ordered whether by a court or a regulatory body or otherwise to make any payment in respect of your complaint, such payment will be made net of the gesture of goodwill payment we are now making.

Should you be dissatisfied with this outcome, I am obliged by our regulators, The Financial Services Authority, to bring to your attention your referral rights to the Financial Ombudsman Service. I have enclosed a copy of their leaflet, which advises how you can contact them.

For the purposes of the Financial Ombudsman Service, our complaint procedure has been exhausted and you may consider this letter to be our 'final response' to your financial difficulty claim. Please note, you have six months from the date of this letter to refer your claim to the Financial Ombudsman Service for investigation.

[Deleted User]

esmerellda wrote: »

Nope. They do not have to give you a single penny under the financial difficulty exemption to the waiver. They have to consider your case and consider a refund (will get quote) that is all. And for Waiver breaches you want to be talking to the FSA.

But this is the thing: they HAVE considered my case and HAVE given me part of a refund, but not the full amount. But, they haven't given any reasons or declined the remainder; instead, they've said they'll wait until the test case is over which is precisely what the Hardship exemption was put in place to avoid.

I accept they don't have to pay out the full amount (or even a penny), but they need to make a decision and consider my case either way. They have clearly 'considered it' because they've paid me 75%, but they then need to provide a reason why they haven't paid the remainder. Instead, they've said my case is closed in one paragraph, but in a later paragraph they've advised that the remainder will wait until the test case is over: very confusing!

[Deleted User]

Could it just be a simple error - that the response they send needs to be edited by a human and actually this paragraph was supposed to be deleted:

Your complain regarding unauthorised overdraft charges will be dealt with once the legal proceedings between the banks and the Office of Fair Trading are concluded. Your complaint reference number is XXXXXXXX.

If you remove this paragraph, the rest makes complete sense.