Banks paying up

Pammy

Excuse my ignorance but why did the banks pay up before this all went to court?

Obviously they paid out quite large amounts of money and I'm not clear why if they felt their charges were right and fair.

pingchris

they paid up to start with as they couldnt answer to the case put before them in court,so they paid up in some cases knowing a court case would delve too deep into it,the banks dont want an indepth investigation to there charges,anyway they ran to the supreme court and got a ruling that said they could not be investigated over charges,sorry but the supreme court sems a little too close to the banks and government for my likeing,did the supreme court just protect the banks and government,is that what they are there to do. ?

i could be wrong and im sure folk will tell me otherwise if i am,but hey thats what learning is all about:D

pie81

They paid up because they didn't want a court to look at the question because they weren't sure whether they would win or not.

Then there were just too many cases and the OFT got involved and so the banks agreed to the test case. Which they won.

chipbeck

pie81 wrote: »

they paid up because they didn't want a court to look at the question because they weren't sure whether they would win or not.

Then there were just too many cases and the oft got involved and so the banks agreed to the test case. Which they won.

eventually!

Smasher

That's all a bit simplistic really.

The claims brought before the test case were disputed were on different principles. In a nutshell, the bank's terms stated that the charges were to cover their costs. It is abundantly clear now that was simply not the case. That is why banks settled.

However, upon the announcement of the test case, all the banks restructured their terms and presented unauthorised overdrafts as unarranged/unplanned/instant/reserve overdrafts and called them services. The OFT only lost the right to asess the fairness of the price of a service. The issue over whether or not the so called 'service' itself is genuine or fair has, amongst many other things, not yet been addressed.

Its like having someone try to assess whether or not I have a right to park bikes on my garage roof. Chances are, there's nothing to say I can't do that, so I win that case and you think great, that's that then. But still nobody has looked at the fact that they're not actually bikes, they're scooters and I stole them. Once that gets looked at, there will be nothing on my roof..

There are also a vast amount of claims still in the system argued on the older principles so the recent ruling is not even relevent to them.

Pammy

So if the OFT had not pushed would we be in a better position then? Or was it the banks themselves that called for this. I always assumed the banks wanted to avoid it.

Btw Smasher thanks for that simple summary of where things are at the moment. It all seems totally bizarre. So in theory if there was another court case based on what is a service then the banks could change them back to say it was to cover costs and then its correct challenge again?

I never expected all the money back but what I did expect was the banks to recognise the cost was high, lower the charge and refund the difference. Hey ho.