Question about bank charges

nomoredebts

0n 5 April 2006 the Office of Fair Trading (OFT) announced that default charges which are set at more than £12 will be presumed to be unfair and unenforceable in terms of the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Charges above this sum will be subject to legal action by the OFT.

I get this. But I have a question. If charges above £12 are presumed unfair and unenforceable, then how come the banks are for the most part, it would seem, settling in full? Why aren't they just settling the difference between each actual charge, e.g. if you get a charge of £20 why do you get £20 back (or why can you claim for £20) and not £8 which is the difference between the £12 which appears to be the cutoff point at which charges are deemed unfair, according to the above. I understand the above as charges which are set at more than £12 will be presumed to be unfair, in other words, charges UNDER £12 are therefore presumed fair and enforceacble? Could the banks not claim back the difference between the 'fair' bit and the 'unfair' bit? Unless I have missed something.In which case, I don't get it at all

I am justabout to put in a claim for over £1000 (4 accounts, 6 years, long story for another time) and this will make a significant dent in my debt mountain. Great I think...BUT I am dubious about this huge influx of people reclaiming charges. I have a nagging feeling about it all going pear-shaped somehow. The banks are going to have to recoup that money somehow aren't they? I have a horrid feeling that having paid out, at some point they will turn around and say... oh by the way, we weren't being unfair after all please pay us back £xxxxx etc etc. Perhaps I am being paranoid here but having been burned twice with tax credits and overpayments (not my fault) I am being cautious. I need to feel I am on absolutely solid ground here and once I send off the letters I can fight with confidence to the end!

lynzpower

Get in sooner rather than later then. The £12 figure was mooted, as in EXCEPTIONAL circumstances I believe,there was a massive discussion on consumeractiongroup.com/forum about this

CLAPTON

You ask why the banks dont just refund the difference between £12 and their actual charges. Only the banks can answer the question but it is reasonable to assume that they dont want to actually go to court. Currently, they are settling before court or not actaully defending in court.
Also, the OFT ruling is only out for consultation so is not a final ruling.

Even then the OFT doesnot make the law.
to quote from the OFT's website about this matter :
" Only a court can finally decide whether a charge is unfair or not. The OFT has today set out a statement of its view of the law. This has not generally been accepted by most of the eight credit card issuers."


I'm with lynzpower on this do it sooner rather than later.

They are anyway paying on a 'goodwill' basis and admitting no fault. If you are truely worried they may retrospectively reclaim it (zero chance in my view) then you can always save it in a B Soc account until everything is finally clarified.

miss_angie1

nomoredebts go forth and claim back those charges!!! Don't have any sympathy for the amount of money the banks are having to pay back. They can afford to. Like lynzpower and Clapton have said you are best to get in there quick whilst the banks are still in a "goodwill" settling mode as all of our bank action group pressure will eventually become too much and they will have to make a change and stop sometime. I'm awaiting my court date now.