MSE News: Bank charges: banks win test case appeal

MrLeeLee

ILW wrote: »

Cannot see that working, if for example Tescos are selling beans at 30p this week, cannot see that as an admission that they wer overcharging at 35p last week and refunding all purchasers.

That's a really good point, never thought of it like that.

euronorris

ILW wrote: »

Cannot see that working, if for example Tescos are selling beans at 30p this week, cannot see that as an admission that they wer overcharging at 35p last week and refunding all purchasers.

I'm not convinced that the two are comparable. After all, the price of Tesco's products is expected to fluctuate very frequently and you received the tin of beans in exchange. The beans that you had purposely bought.

The charges set by the bank are often fixed for long periods of time, and often, all you receive in return is a letter telling you that you had no money so we rejected the DD and now we're charging you. What service have you received here exactly? A letter? An automated letter at that. And, even without it, you would still know what had happened.

Plus, the price of beans will fluctuate as it is an item being sold in a competitive market. These charges, remember, are supposed to be penalties, not a product/service.

WestonDave

And of course some banks have already changed their charging structures without admitting previous ones were illegal.

I suspect that unless CAG/MSE are advised they have an almost watertight case under Reg 5 (which I can't personally see), its not going to be worth them risking the amounts of money that 3 court cases will take (bear in mind if they lose they pay their costs and the banks). That then probably throws it back to the OFT compromise solution suggested by Alex.

discoass

philatio wrote: »

"oh I'm redundant.. I can't afford to make ends meet"
(smokes fag) (drinks beers) (watches Sky HD TV) (surfs internet on 3G mobile) (runs kids 500yds to school in 4x4)

Get a grip people.
You're not poor. You're just too stupid to budget your finances.

People these days seem to expect luxuries as essentials.

I'm not rich. I haven't got a very well paid job. Daddys not loaded. I JUST ONLY SPEND WHAT I CAN AFFORD!


Also loving the people who are now saying "I was counting on getting this money back". Beggars belief !!!!!

This is not only about not having the cash in the bank.the system is geared up to catch even the most prudent budgeters out.


The banks operate on a win win basis

1.no money in account=return DD £35 or pay DD ..£35 for going overdrawn

2 decide not to use DD then u can fall into the "it takes upto 5 days to reach its destination" trick = late payment fees. this has happened to me several times always the money reaching 1 day after it was supposed to.

3." I refuse to stop u using money u dont have" trick more charges for being over slightly.

4 the "debit card takes up to a (x)months to clear " trick making u think its come out.

every way you turn there is a trap. I bugdet very well but the odd occasion it goes over,just last week i went over £20 quid but noticed it immediatly (as i check everyday via online) in went 180 from savings account still got a £25 charge although i did get it reduced to 12 quid

a simple software update could stop you from what some of u say"stealing" from the bank ,if theres no money in the account i want the right to say "dont pay it i`ll sort it out myself" an not get whacked with a £35 charge for not having enough to cover it,after all its only a DD .

nuff said

mystic_trev

WestonDave wrote: »

And of course some banks have already changed their charging structures without admitting previous ones were illegal.

I suspect that unless CAG/MSE are advised they have an almost watertight case under Reg 5 (which I can't personally see), its not going to be worth them risking the amounts of money that 3 court cases will take (bear in mind if they lose they pay their costs and the banks). That then probably throws it back to the OFT compromise solution suggested by Alex.

Actually it has to be remembered that the Banks (when the case began) agreed to pay all the OFT's Legal costs as well as they're own. Now the case hase been settled they won't be funding the OFT for another one! Makes you think that they knew they were going to win all along!

Alpine_Star

mystic_trev wrote: »

Actually it has to be remembered that the Banks (when the case began) agreed to pay all the OFT's Legal costs as well as they're own. Now the case hase been settled they won't be funding the OFT for another one! Makes you think that they knew they were going to win all along!

The banks and the OFT would have paid their own costs as per section 5 of the Litigation Agreement http://www.oft.gov.uk/shared_oft/personal-current-accounts/OFT-Banks-FSA.pdf

turpin

Quanz2 wrote: »

Wow.
To save anyone reading all the posts in this thread I have summarised the two sides.
1 - "I've gone overdrawn and incurred bank charges"
2 - "Its your own fault, dont spend money you dont have"
1 - "The banks are ripping me off"
2 - "You are paying for my free banking"
1 - "People that work in banks are scum"
2 - "Your a loser"
1 - "Your pathetic"
2 - "Your an idiot"

Perhaps we could have a special thread for people who just want to throw insults at each other.
Does anyone actually have anything worth saying, from either side of the fence?

I'm afraid this is largely true. I've never come across a more unfriendly forum. A lot of bitterness. I have to say though, that although the bile is occasionally two way, most of the worst posts have come from the dissapointed side of the debate. Some more of them should have been removed as they are seriously nasty, verging on unbalanced. The sort of stuff that used to be constructed out of cut out words from newspapers, or written in green ink signed annon. There seems to be a lot of real nastiness against Proliant for example; yet Proliant made very valid observations earlier on in this thread - that happened to clash with the popularist view of this issue, popularist on this site, that is - and has effectively been flamed, then flamed some more, when he or she has retaliated. Take a look through, most of the really nasty, obnoxious, disturbing stuff on here is comming from one side in this. And I'm not all that surprised. In reality, this is almost a non issue to the population as a whole, because most people do not habitually run up bank charges. It is a non issue to me. Look on the BBC site, very few comments on this story. I get the feeling that people on here have had their expectations raised to an unrealistically high degree, largely by each other within the enclosed comunity of this forum and then seen them dashed, giving rise to some of the most irrational, pathetic and in some cases disturbing postings it is possible to imagine. The behaviour of a worryingly high proportion of you on this forum, is far more of an issue than anything regarding bank charges. And most of you would not say boo to a goose face to face.

Alpine_Star

alexjohnson wrote: »

...which is why it's litigable. But tough. In my view looking at the text of the judgments the tone should not be seen as encouraging.
.

I know what you mean but as Martin Lewis - rightly I think - pointed out :

"The initial shock reaction in the court covered what was a key element of the Judge's final statement that 'the OFT may be able to look at fairness by another route'........the fact this was deemed important enough to be said in his very short verbal statement is of great significance.

PROLIANT

turpin wrote: »

I'm afraid this is largely true. I've never come across a more unfriendly forum. A lot of bitterness. I have to say though, that although the bile is occasionally two way, most of the worst posts have come from the dissapointed side of the debate. Some more of them should have been removed as they are seriously nasty, verging on unbalanced. The sort of stuff that used to be constructed out of cut out words from newspapers, or written in green ink signed annon. There seems to be a lot of real nastiness against Proliant for example; yet Proliant made very valid observations earlier on in this thread - that happened to clash with the popularist view of this issue, popularist on this site, that is - and has effectively been flamed, then flamed some more, when he or she has retaliated. Take a look through, most of the really nasty, obnoxious, disturbing stuff on here is comming from one side in this. And I'm not all that surprised. In reality, this is almost a non issue to the population as a whole, because most people do not habitually run up bank charges. It is a non issue to me. Look on the BBC site, very few comments on this story. I get the feeling that people on here have had their expectations raised to an unrealistically high degree, largely by each other within the enclosed comunity of this forum and then seen them dashed, giving rise to some of the most irrational, pathetic and in some cases disturbing postings it is possible to imagine. The behaviour of a worryingly high proportion of you on this forum, is far more of an issue than anything regarding bank charges. And most of you would not say boo to a goose face to face.

On this forum, more so on this board and the DFW board, if you are not part of the hate campaign against a financial institution and you tell people the truth and point out possible errors in the way that they conduct them selves both morally and ethically, then you are strung up and find that even the board guides are so biased and corrupt they start tipping the balance by way of deleting threads/posts so that their utopia of "cuddle me I am a victim" type tosh is preserved.

nellyboy

interesting reading:

supreme court hope: this helps to shed light on a small point of law victory.

Supreme Court Judgment and what is means,


I am going to set out parts of the Judgment and explain what they mean if needed. After which I will outline what I think should happen next ( stephen).


The Judgment

Firstly the Lord Walker highlighted the fact that many members of the public were not aware of the limited nature of the issue, which the court had to decide in the appeal.

At Para 45 Lord Walker Said “…The Directive and the 1999 Regulations apply only to terms which have not been individually negotiated“. Clearly the contract we all entered into with the banks has not been individually negotiated so the regulations do apply.

Lord Philips Para 57. Stated the issue is whether the relevant charges constitute “the price or Remuneration, as against the services supplied in exchange” within the meaning of the Regulation. If they do not, the attack on the fairness of the term that is open to the OFT will not be circumscribed (restricted) by Regulation 6(2)b. If they do, then they will still be open to attack by the OFT on the ground that they are “Unfair” as defined by regulation 5(1) but that attack cannot be founded on an allegation that the Relevant Charges are excessive by comparison with the services which they Purchase, for that is forbidden by regulation 6(2)b

So what does this mean, well it means that the Court has ruled that the charges for bounced direct debits and unauthorised overdrafts etc are part of the price for the services, therefore they cannot be tested for fairness under Regulation 6(2)b of The Unfair Terms in Consumer Contract Regulations 1999, However the Court has said that the OFT can assess the Fairness of the price under Regulation 5.1. According to other criteria. (See Para 59)

This point is further explained in Para 80. Lord Philips states ‘it seems to me that this reasoning is relevant not to the question of whether the Relevant Charges form Part of the price or remuneration for the package of the services provided but to whether the method of pricing is fair. (My emphasis added) It may be open to question whether it is fair to subsidise some customers by levies on others who experience contingencies that they did not for see when entering into their contracts. If not it may then be open to question whether the Relevant Terms fall within Regulation 5(1)….” Clearly his lordship highlighted that the court may be persuaded that it is unfair for some consumer to pay for services that other consumers benefit from for free.
What’s more it is mostly the consumers who are on low incomes and struggling financially that are paying for everyone else. This is in my opinion not fair, and shows the banks have not acted in “Good faith”. Or as Lord Mance’s suggested in the trial, that ‘the banks were engaged in a sort of Robin Hood in reverse’ (see Para 2) I would suggest he means the banks were taking from the poor to subsidise the rich.

All the Lords appear to have agreed with Lord Walkers final Paragraph that being 52, in which he said ‘…This decision is not the end of the matter’, as Lord Philips explains in his judgment. Moreover Ministers and Parliament may wish to consider this matter further. They decided in an era of so-called “light-touch” regulation, to transpose the directive as it stood rather that to confer the higher degree of consumer protection afforded by the national laws of some other member states. Parliament may wish to consider whether to revisit that decision.’

So what does all this mean, well it means the following

1. The OFT can still look at the charges under UTCCR 1999, and always has been able to. They could now launch a new test case. (However, what must be asked is why was there a two year test case on a very narrow point of law? when the OFT already had the ability to assess the fairness of theses charges under Regulation 5.1 and others )

2. All consumers who have submitted a claim using the Old Particulars of Claim, arguing that the price was unfair and or that these are a penalty charges. Needs to amend their claim to include an argument under regulation 5.1. (a new Particulars of claim will be live on the site tomorrow with full instructions on what you need to do)

3. We also need to put pressure on the Government to amend the Regulation so we all have the same consumer protection rights that other member states have. (So get writing to your MP’s a template letter for this will be on the site within 48 hours)

4. I am sorry to say but I would like to see the stay remain in place, for a least a month. This will give consumers time to amend their claims and other consumer groups and I will be discussing the possibility of joining forces to bring a joint Class action. I feel this would insure that we could make sure that all the legal arguments are covered in full. I will update you all on this when I have spoken to the other consumer forums.


Finally, I will explain Regulation 5(1) in more detail on the site for those that are interested. However, what was important in this news letter is to confirm that this was basically a set back to the OFT and not to consumers. Claims can still be filed.
The FSA has also lifted the Wavier.

I hope that the OFT if they do decided to bring a new action, that they will now invite the consumer groups to the table. Something we asked them to do before this test case, sadly that request was refused.

To conclude, the test case has only resulted in us having to amend the Particulars Of Claim and resulted in a two year delay, other than that we are back to the position we were in two years ago.

So was this test case a victory for the Banks, yes they beat the OFT on a small point of law, they did not beat the consumer forums and or the consumers.

courtesy of
[EMAIL="stephen@penaltycharges.co.uk"]stephen@penaltycharges.co .uk[/EMAIL]
any questions I am sure he will gladly assist.