Halifax/ Bank of Scotland: a guide to account changes.

Nathan_Spleen

jambosans wrote: »

No.

The changes are a reaction to the likely loss of the Test Case on bank charges, and a subsequent ruling by the OFT that charges are, indeed, unfair under UTTCR. They have reduced unauthorised overdraft charges from £35 (max of 3 per day) and £28 to £5 per day. So if something goes down, to balance the books, something else has to go up: arranged overdraft charges. .

The changes are more likely a reaction to the findings of the PCA Market Study.

By definition a reaction is made in response to an event that has happened and not to an event that may happen at some unspecified point in the future.

Halifax new terms come under the FSA waiver and as such are equally subject to the test case as their previous terms and are currently under scrutiny by the OFT.

Accordlingly and as I think I indicated to you somewhere before I strongly believe the new Halifax terms, along with all current account insufficient charge terms, have a very limited shelf life as after the judgment from the Supreme Court upholds the rulings from the lower courts the OFT will seek an injunction to prevent the continued use of them, assuming the banks don't voluntarily comply with the OFTs view on fairness. You are in error in saying the OFT can 'rule' on the fairness or otherwise of the charges. Only a court of law can do that as OFT have repeatedly made clear.

Therefore in my view in advising Halifax account holders of the new account structures (that you clearly have a better grasp of than most) it would be unwise to assume that the accounts will exist in their present form in 6 months time and I would urge you and Halifax customers to take that into account when considering medium term PCA budgeting.

jambosans

Nathan_Spleen wrote: »

The changes are more likely a reaction to the findings of the PCA Market Study.

You're correct, this is the official line coming from HBOS, as the Test Case is not complete. I should have perhaps made it clearer that my reply was pure speculation. I think my opinion is generally considered a more likely reason for some of the changes than the PCA Markey Study alone.

Nathan_Spleen wrote: »

Halifax new terms come under the FSA waiver and as such are equally subject to the test case as their previous terms and are currently under scrutiny by the OFT.

Yes I am aware of this, if you read other posts made by myself, I openly acknowledge this fact.

Nathan_Spleen wrote: »

Accordlingly and as I think I indicated to you somewhere before I strongly believe the new Halifax terms, along with all current account insufficient charge terms, have a very limited shelf life as after the judgment from the Supreme Court upholds the rulings from the lower courts the OFT will seek an injunction to prevent the continued use of them, assuming the banks don't voluntarily comply with the OFTs view on fairness.

Now my Test Case knowledge is somewhat limited, but these changes have been brought in with HBOS giving a nod to the OFT's PCA Market Study. So surely, this kind of change is less likely to be assessed as unfair, as opposed to the status quo? One things for sure, things are going to change in relation to charges, I have just assumed (perhaps incorrectly) that these changes are more in line with what the OFT has in mind.

Nathan_Spleen wrote: »

You are in error in saying the OFT can 'rule' on the fairness or otherwise of the charges. Only a court of law can do that as OFT have repeatedly made clear.

I could have worded it better, but you understand what I mean. If the OFT "assess" charges to be unfair under UTTCR. Better?

Nathan_Spleen wrote: »

Therefore in my view in advising Halifax account holders of the new account structures (that you clearly have a better grasp of than most) it would be unwise to assume that the accounts will exist in their present form in 6 months time and I would urge you and Halifax customers to take that into account when considering medium term PCA budgeting.

I don't think that assumption has been made. Changes aside, people starting to look at their overdraft debt differently can only be a good thing. Whether or not these changes actually last very long is neither here nor there, it is a push in right direction if people start paying their overdrafts off.

I apologise if I come across as curt, but previous exchanges with you have been less than amicable, and I always get an overwhelming sense that you're more interested in "points scoring", rather than engaging in genuine discussion. That said, I have responded to this post - despite feeling you are still being a little pedantic at times - because it does raise some good points, and makes for an interesting discussion.

Nathan_Spleen

You'll have to excuse the format of this post. I can argue till the cows come home but can I multi-quote?

You're correct, this is the official line coming from HBOS, as the Test Case is not complete. I should have perhaps made it clearer that my reply was pure speculation. I think my opinion is generally considered a more likely reason for some of the changes than the PCA Markey Study alone.

You may be right in that it's a combination of both. But I can't help feeling that there would be nothing to achieve by Halifax awarding their own prison sentance before being found guilty, if you see what I mean.

Now my Test Case knowledge is somewhat limited, but these changes have been brought in with HBOS giving a nod to the OFT's PCA Market Study. So surely, this kind of change is less likely to be assessed as unfair, as opposed to the status quo? One things for sure, things are going to change in relation to charges, I have just assumed (perhaps incorrectly) that these changes are more in line with what the OFT has in mind.

Although the overall cost of insufficient funds charges has fallen and would appear more in line with what the OFT are looking for there are other areas of equal importance in the test case and UTCCR investigation: The triggering of charges, frequency of charges and the interelationship between the charges. In fact in the first instance test case hearing where all the nitty gritty issues were examined, the level of charge wasn't discussed at all and the hearing was taken up the OFT's concerns listed above.

I could have worded it better, but you understand what I mean. If the OFT "assess" charges to be unfair under UTTCR. Better?

Much better. Many people who read these forums don't understand the constraints the OFT have to work under and seem to think they have more power over the issue than they actually have. They get a lot of unjustified criticism for not acting quicker ect and I spend quite a bit of time on forums in defence of them (a sometimes lonley crusade) but the reality is the progress of the test case has been almost excusively dictated by the court system. It staggers me sometimes the flack they get when they are batting for consumers but having had involvment with them on the bank charges issue with LB I'm convinced they have consumers interests at heart and that their long term strategy is sound.

I don't think that assumption has been made. Changes aside, people starting to look at their overdraft debt differently can only be a good thing. Whether or not these changes actually last very long is neither here nor there, it is a push in right direction if people start paying their overdrafts off.

Ok and understood. I just thought that if there were any circumstances where it makes long term sense to advise this or that, people should bear in mind that a certain account or strategy might come unstuck if the structure was to change a few miles down the road. And to be honest I advise that in ignorance of knowing if it would actually apply.

I apologise if I come across as curt, but previous exchanges with you have been less than amicable, and I always get an overwhelming sense that you're more interested in "points scoring", rather than engaging in genuine discussion. That said, I have responded to this post - despite feeling you are still being a little pedantic at times - because it does raise some good points, and makes for an interesting discussion.


Accepted and reciprocated. My guiding principle in life is ''If a window needs kicking in then use both feet''. It's served me well but can sometimes cause collateral damage! And yes always good to debate. My motives in the campaign are not at all personal from a financial standpoint as I've been fortunate in life but I have an inherent regard for the principles of fairness and decency in society and I suppose that that's what drives my dislike for anything that ends in 'bank'.

jambosans

Nathan_Spleen wrote: »

But I can't help feeling that there would be nothing to achieve by Halifax awarding their own prison sentance before being found guilty, if you see what I mean.

Yeah, I know what you mean. I'd imagine HBOS feels this will put them in good stead for any changes that arise from the Test Case and beyond. I can't really counter-argue your point because I have to agree, it seems a little strange, perhaps someone else can give a suggestion as to why the pre-emptive change? Aside from there being more profit in the new structure - which has been argued as cost-neutral. I don't know the numbers, so wouldn't be able to take a side on that one.

Nathan_Spleen wrote: »

Ok and understood. I just thought that if there were any circumstances where it makes long term sense to advise this or that, people should bear in mind that a certain account or strategy might come unstuck if the structure was to change a few miles down the road. And to be honest I advise that in ignorance of knowing if it would actually apply.

I agree. I've tried to remove personal opinion about the changes, but you raise a good point, which I do agree with to an extent (makes a change ). I personally feel the changes are a little ill-timed, not merely in relation to the Test Case, but more so in relation to the Lloyds TSB takeover.

Although integrations can take years to complete, at some point down the line (I would imagine) Lloyds, Bank of Scotland and Halifax will all be singing from the same product hymn book. Now LTSB are a big player in the packaged account market (with four offerings), whereas HBOS have a humble one, so something's got to change. I think LTSB, like other banks, are playing their hands close to their chest - no doubt they have planned for the eventuality of Test Case, and subsequent court case loss - and are not going to do anything until such a time when the charges "fiasco" has been resolved. It's all pure speculation, but I was surprised that LTSB didn't pull the changes until it had a clearer idea of how the three brands would integrate. Even today it has been reported that Lloyds TSB Scotland will be sold within the next four years, meaning Bank of Scotland will be Lloyd's only offering north of the border - so I would assume they will want the product range in line with Lloyds/ Halifax in England and Wales.

Anyways, I digress, but just felt this was another point that should be added to the discussion. On a final point, I would have assumed HBOS planned this as a mid to long term solution (despite the variables), because any subsequent change would result in more cost (planning, mailing, systems alterations, etc.). I guess we will have to wait and see.