MSE News: Bank charges fighting on: a new legal argument

Centium5000

Please, not another challenge on a 'legal technicality'!

Surely the banks' actions are unfair on straightforward grounds without trying to make a law fit the outcome?

The banks will argue they have the right to cross-subsidise without consultation and they will be correct. We cannot dictate how the banks spend the money once they have it, only challenge the basis on which they get it.

In the Supreme Court ruling, this basis as a 'service' is made clear and supported by the judgement.

Regulation 5(1) of the UTCCR could still be used to challenge the fact that the bank can decide unilateraly whether or not to pay, but the consumer has no reciprocal choice. On that basis we'd surely win.

Another basis is that the general agreement of the banks to levy these charges is now a matter of public record - in court, via the BBA and in statements given to parliament. By acting in concert and controlling over 90% of all UK current accounts, they come under Chapter 2 of The Competition Act.

All you have to do is show that the prices are unfair (disproportionate, excessive, imposed, inequitable etc.) under that legislation rather than UTCCR.

...and the FOS approach..?

That will fix things going forward, but as it will be new regulation rather than existing law, the banks will (fairly) claim their right under the Human Rights Act not to suffer retrospective action. In other words, this would void existing claims under the new FSA regulations.

I hope the QC sees these obstacles and makes a compelling case - another loss on a technicality would surely end the matter, or put it outside the scope of 6 years consideration.

Keep fighting guys, you're brilliant, but please choose the right approach this time.

kjetilniki

You cannot challenge the fees on the grounds they are so excessive, that was what the SC decided, based on reg 6(2)

So if the banks charged £1 per month whilst O/D without permission to have regard to oversight costs and to cover cost of letter advising of same, would u feel able to claim it was unfair term having regard to the charge being a part of the overall package of costs?

Is the clause providing for a charge causing a significant imbalance in the parties' rights and obligations arising under the contract contrary to the requirement of good faith?

(it is clearly to the detriment of the consumer.)

This is a decision on bank account charges. The charge of £50pm for each month in arrear charged by Mortgage lenders is not a part of an equivalent package as a whole like a current account is of banking services provided.

Centium5000

kjetilniki wrote: »

You cannot challenge the fees on the grounds they are so excessive, that was what the SC decided, based on reg 6(2)

So if the banks charged £1 per month whilst O/D without permission to have regard to oversight costs and to cover cost of letter advising of same, would u feel able to claim it was unfair term having regard to the charge being a part of the overall package of costs?

Is the clause providing for a charge causing a significant imbalance in the parties' rights and obligations arising under the contract contrary to the requirement of good faith?

(it is clearly to the detriment of the consumer.)

This is a decision on bank account charges. The charge of £50pm for each month in arrear charged by Mortgage lenders is not a part of an equivalent package as a whole like a current account is of banking services provided.

I'm afraid not, though it's easy an easy mistake to make.

The SC ruled that you can't challenge the charges for being excessive under the UTCCR (because of Reg. 6(2)), not that you can't challenge them on that basis under other regulations.

Chapter 2 of The Competition Act clearly states:

(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;

That's because it is an abuse of market power rather than just because it's in a consumer contract (which UTCCR relates to).


I've posted about it at length elsewhere, complete with references to the law and background info:

http://forums.moneysavingexpert.com/showthread.html?p=27332125

The UTCCR, Reg. 5(1) doesn't rely on price, it's about balance of rights and obligations as you noted.

Absence of a similar right for the consumer to decline a payment would normally be treated as such an imbalance. It would only be omitted in 'good faith' if the bank had good reason not to do so.

The only reason I can think a bank could argue 'good faith' for omission is practicality - the payment would have to be delayed for the customer to approve it. Given that bank payments have traditionally taken 3-5 working days to clear, I don't believe this arguement would hold water.

It appears both UTCCR 5(1) and Competition Act approaches have merit, the latter is just a better fit to what the underlying problem is IMO.

pingchris

the top and bottom of this whole ugly affair is that banks got greedy,they saw what they could take and took it,the government know its a scam,the banks know its a scam,the oft know its a scam,the fsa know its a scam,and most of all the people of britain all know its a scam,if it walks like a duck and quacks like a duck,its a duck.

the banks have zero argument,they just ran as fast as they could when they got found out.
its as simple as that.......................................................................

helpfulbob

mramra wrote: »

I sincerely hope not. The majority of bank account holders who manage their money carefully, budget within their means, and therefore manage to avoid going into unauthorised arrears would quite like to continue with free banking thank you very much. :beer:

If someone pays for it is NOT free you are essentially taking the food out of peoples or more importantly childrens mouths!!!!

marcharrison1979

If the banks are in crisis, why don't they charge people for withdrawals or for just having an account? Why have they never done this? if they are desperate, why hasn't this been mentioned before this court case came to light? what's stopping them from introducing these extra charges that they have been threatening over the past 18 months? funny how they've never mentioned this before. :O

chriszzz

Why cant we all go back to getting paid in a wage packet or least have a choice?? and be done with the banks!!
Me Ive canceled all direct debits and got rid of my overdraft limit, hence no temptation, I can quite easily at the minute pay by direct card and once they start charging for that service then I will pay at a pay-point. I would rather give my money to someone else to handle my bills rather than the banks, huh £38 charge for being 50p short of a d/debit and an extra £28 charge if you have gone into unauthorized overdraft for the same bill total being £66 and they call that fair?? :mad:

Dont need the banks, just need them for my wages to go in, I will find another way of paying my bills!!

Chrysalis

edwace wrote: »

Banks by their very nature have more than enough information to know when a customer is in financial crisis, some years ago the customer would have been called in and told the situation was unacceptable and something done to halt the situation before it got out of hand.
<snip>

good post, when I read these I don't care posts I feel like vomiting, it really is sad people are so selfish and careless, shows how much problems we have in todays society.

Chrysalis

chriszzz wrote: »

Why cant we all go back to getting paid in a wage packet or least have a choice?? and be done with the banks!!
Me Ive canceled all direct debits and got rid of my overdraft limit, hence no temptation, I can quite easily at the minute pay by direct card and once they start charging for that service then I will pay at a pay-point. I would rather give my money to someone else to handle my bills rather than the banks, huh £38 charge for being 50p short of a d/debit and an extra £28 charge if you have gone into unauthorized overdraft for the same bill total being £66 and they call that fair?? :mad:

Dont need the banks, just need them for my wages to go in, I will find another way of paying my bills!!

is about control, in an ideal world for the elite all transactions would be 100% electrical only, no paper currency at all.

mramra

Chrysalis wrote: »

please answer my question.

you think its fair if someone gets a returned item charge or unauthorised overdraft charge they pay for your bank account as punishment?

It is fair that they are penalised, due to the terms and conditions of their account.

The fact that they do or do not pay for my bank account is irrelevant.