Changing particulars of claim

Knackered

Just had an email from penatltycharges.co.uk expressing their dismay at the ruling. They reckon, however, that

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)

Is this clutching at straws or could they actually be onto something here (I don't mean narcotics).

pie81

Clutching at straws IMO. If you read the Regulations it is clear that the exemption under Regulation 6 (which is what the banks won on yesterday) overrides the fairness requirement under Regulation 5.

The judge said that the charges could be unfair under regulation 5... however he then went on to say that they were exempt under regulation 6, so it's irrelevant whether they are unfair under regulation 5 or not.

Martin and others are just focusing on the statement that "the charges could be unfair under regulation 5"... they are ignoring the fact that the regulation 6 exemption overrides regulation 5.

onlypaddy

regulation 6 doesn't over rule regulation 5....they have to be fair in guidance with all regulations. in fact, I want to know this too....i think its a simple matter of submitting a form to have the claim wording changed - I just don't know how to do it yet!

pie81

ok here goes.

regulation 5 says:

"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."

regulation 6 says:

"The assessment of fairness of a term shall not relate to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."
In other words, you can't argue that a contract term is unfair simply because it sets too high a price for the service supplied in exchange.

So to use regulation 5, people will have to come up with some other reason why bank charges are unfair... which is not related to how high those charges are.

Seems like that will be very difficult.

nsabournemouth

So what service does a bank provide if you do not have enough money in your account to pay a Directb Debit?

ILW

Knackered wrote: »

Just had an email from penatltycharges.co.uk expressing their dismay at the ruling. They reckon, however, that



Is this clutching at straws or could they actually be onto something here (I don't mean narcotics).

Did you pay them any money up front?

onlypaddy

pie81 wrote: »

ok here goes.

regulation 5 says:

"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."

regulation 6 says:

"The assessment of fairness of a term shall not relate to the adequacy of the price or remuneration, as against the goods or services supplied in exchange."
In other words, you can't argue that a contract term is unfair simply because it sets too high a price for the service supplied in exchange.

So to use regulation 5, people will have to come up with some other reason why bank charges are unfair... which is not related to how high those charges are.

Seems like that will be very difficult.

Regulation 5:

'A contractual term which has not been individually negotiated' - tick

'causes a significant imbalance between the parties' - Tick

'to the detriment of the customer' - tick

If banks charged what it actually cost them to honour these payments (little admin, little interest, letter) plus just a little more for people being idiots with their money, say max £5 (which most are switching to now anyway) then no imbalance would arise. And I don't think anyone can argue they're not a detriment to the customer.....

pie81

onlypaddy wrote: »

Regulation 5:

'A contractual term which has not been individually negotiated' - tick

'causes a significant imbalance between the parties' - Tick

'to the detriment of the customer' - tick

If banks charged what it actually cost them to honour these payments (little admin, little interest, letter) plus just a little more for people being idiots with their money, say max £5 (which most are switching to now anyway) then no imbalance would arise. And I don't think anyone can argue they're not a detriment to the customer.....

You're ignoring regulation 6 though. Says you can't challenge contractual terms just because the price they set is too high.

dzug1

onlypaddy wrote: »

Regulation 5:

'A contractual term which has not been individually negotiated' - tick

'causes a significant imbalance between the parties' - Tick

'to the detriment of the customer' - tick

If banks charged what it actually cost them to honour these payments (little admin, little interest, letter) plus just a little more for people being idiots with their money, say max £5 (which most are switching to now anyway) then no imbalance would arise. And I don't think anyone can argue they're not a detriment to the customer.....

I don't think it's as clear cut as that.


1 tick
2 not so sure - you (as a bank charges objector seem to believe you ) have the right to help yourself to the bank's money as and when you like and pay it back as and when you like in circumstances and timescales you do not define to the bank. That goes a long way to redressing any perceived imbalance. The bank HAVE defined you you what their position is.
3 again not so sure - they are assisting you to not break a contract you have made with the payee. The price/cost is not a factor.

Knackered

So the most optimistic opinion on this is "It almost certainly won't work"? There's just never any good news, is there?

ILW wrote: »

Did you pay them any money up front?

No

beaujolais-nouveau

pie81 wrote: »

So to use regulation 5, people will have to come up with some other reason why bank charges are unfair... which is not related to how high those charges are.

Seems like that will be very difficult.

I seem to remember an argument being made a couple of years ago that the banks are not allowed to make a profit from what are penalty fees - it does not cost the bank £35 or whatever to tell the customer they have gone over their limit. However, the banks reacted by saying the £35 was a "service" charge.

I think there is some mileage in arguing that the banks should not make a profit like this, especially when charges are added to charges and then interest gets added to charges.

The other thing to do is to have as few Direct Debits and Standing Orders as possible.