MSE News: CONFIRMED - OFT gives up bank charges battle

chipbeck

Premier wrote: »

I think you may have misunderstood the reason for the charge.

When you authorise a payment that you have insufficient cleared funds available to pay, the bank needs to assess whether or not it should accept or reject that transaction.

It is that assessment, which may or may not result in the bank agreeing to grant you an unauthorised overdraft, for which you pay the charge.

Me in peace Premier.

I think you are correct with the above statement. However you seem to be justifying the charge by the 'work' that is involved. I appreciate software has to be written and we in the IT industry get paid too much, but a line of code that says

If dd amount > current-balance
goto nowayjose
else
pay it.

Nice little earner, wonder how much the above has earned the banks over the last few years.

Premier_2

pool-hustler wrote: »

i agree that a charge is justified but can i argue the amount any more?
£38 - £5 is a little bit obvious of overcharging is it not?
What siginificance to claiming an unfair amount did the OFT quitting cause?

There is no case to answer on the level of charge the bank makes - the supreme court ruling clarified that.

Whilst the SC case was not specifically about fairness (but about the level of charge itself), the SC did say go to the extent of suggesting that a case claiming unfairness may result in a different outcome - but I don't think you should consider it necessarily would, such legal challenge would require it's own specific case to be judged upon.

As you probably know, the OFT said in a statement on 22 December 2009:

...After detailed consideration of the judgment and of the various options available to it, the OFT has concluded that any investigation it were to continue into the fairness of current unarranged overdraft charging terms under the UTCCRs would have a very limited scope and low prospects of success. Given this, it has decided against taking forward such an investigation....

http://www.oft.gov.uk/news/press/2009/144-09

pool-hustler

so individual cases are actually as strong as they were before? All it means is the banks can contiue doing what they were but we is individuals can still argue the unfairness?

natweststaffmember

Premier wrote: »

There is no case to answer on the level of charge the bank makes - the supreme court ruling clarified that.

Whilst the SC case was not specifically about fairness (but about the level of charge itself), the SC did say go to the extent of suggesting that a case claiming unfairness may result in a different outcome - but I don't think you should consider it necessarily would, such legal challenge would require it's own specific case to be judged upon.

As you probably know, the OFT said in a statement on 22 December 2009:

http://www.oft.gov.uk/news/press/2009/144-09

Premier, I really want to stop picking you on things especially as it was the press release but shall we see what they said.

"3.17 The OFT has considered whether use of these enforcement tools is
appropriate. The OFT’s initial assessment is that there are not good
grounds for concluding that a collective challenge alleging breach of
these provisions arising from the use of the Relevant Terms generally
would have good prospects of success. This partly reflects an
assessment of the wider repercussions of reasoning underlying the
Judgment. This reasoning will inevitably be influential in guiding the
deliberations of any UK court before which the OFT might bring
enforcement action based on the concept of fairness. Therefore the OFT
has not initiated an investigation at this time using the above
enforcement tools. However, it will keep these issues under review and
does not rule out the possibility that it may in future consider use of
these tools."

OFT report 1154. Furthermore, you will notice that it is still keeping the issues under review which means that they haven't said that the high court have rejected out of hand all arguments so say good bye to your money. They have said that they will not mount a collective challenge to it using newer arguments(key word is in bold and red so that we both fully understand the press release)

I would completely agree with you that the level of a charge is no longer on the table yet the fairness of them(historically and currently) very much are on the table.

Premier_2

natweststaffmember wrote: »

...I would completely agree with you that the level of a charge is no longer on the table yet the fairness of them(historically and currently) very much are on the table.

As far as the OFT are concerned,

...the OFT has no current intention to start an unfair relationships investigation.

Questions and answers for OFT's personal current account work, (point 4) Updated 22 December 2009

The OFT explain in point 6 of that article what action they are taking, but that appears to be constrained to discussion, persuasion, suggestions, etc rather than litigation over existing law.

Although I accept an individual may elect to challenge such matter if they were so inclined; indeed it does also say immediately above that:

...An individual challenge might succeed where a collective challenge would not since a case would need to focus on the individual circumstances of each creditor-debtor relationship – including matters relating to the individual debtor. ..

However, it should be noted that Martin has previously warned that such action, either individually or as a group action, would be expensive:

The case will be expensive

If the OFT does not pursue the case, and a private action needs taking, it is likely to be expensive. A group action could cost millions and to ask people who are already struggling to foot the bill for justice is a raw move. A similar state occurs if people fight individually and need to pay to get items amended in court and risk costs against.

http://www.moneysavingexpert.com/reclaim/bank-charges (click on the link "why the OFT should take up the case" to expand the full detail and see that otherwise hidden content)

natweststaffmember

Premier the full quote of question 4 so that those who read this thread have the CONTEXT of it.

"4. Why isn't the OFT taking an unfair relationships case?
The OFT has considered the possibility of pursuing a case under the Enterprise Act based on the unfair relationship provisions of the Consumer Credit Act (CCA) 1974 (a collective challenge).
The OFT’s initial assessment is that there are not good grounds for concluding that a collective challenge alleging breach of these provisions arising from the use of the Relevant Terms generally would have good prospects of success. This partly reflects an assessment of the wider repercussions of reasoning underlying the Judgment. This reasoning will inevitably be influential in guiding the deliberations of any UK court before which the OFT might bring enforcement action based on the concept of fairness.
An individual challenge might succeed where a collective challenge would not since a case would need to focus on the individual circumstances of each creditor-debtor relationship – including matters relating to the individual debtor.
As such, the OFT has no current intention to start an unfair relationships investigation."

Key word again, COLLECTIVE CHALLENGE.
To be honest with you Premier, the initial court cases based on new arguments may determine how it will continue onwards. Furthermore, an individual represented by a CMC may well have the money to invest in such a case, NOT that I am recommending people use a CMC(case management company or no win no fee company).
In fact, publicity wise, it would help the CMC so unfortunately, I still do not buy that negative approach of give up, it's over.

THE FAT LADY IS NOT SINGING YET

davidgmmafan

"Whilst I agree that many bank staff apparently are not fully conversant with their banks role under the DD scheme, in the numerous claims I have made, only once was I stonewalled completely at branch/customer service level. Following the bank's usual complaint procedure soon resulted in bringing the matter to the attention of someone in the bank who had read and understood the rules resulting in an offer of corrective action, which I accepted. The letter, as usual, gave me the option of not accepting the corrective action offered in the event I didn't agree with it, but to pursue the matter further with the FOS."

That's good to hear but there are many people who are not able to make such a challenge. I can make myself understood to the bank or the FOS but others cannot. For example if someone was illiterare or virtually illiterate their course of action maybe to approach the bank in person and faced with a blank look, or false certainty they might give up. I will certainly spread the word about this revelation though as its very good to know.

With regards to the challenge being discussed by yourself and yourbank I am a little confused and hope one of you can illuminate me... What would a win look like under the new arguments? I can't work it out. If the level of charges cannot be questioned then what redress could the bank make if the relationship were found to be unfair?

BTW on a related note to the strart of the thread (why reclaim bank charges) I read with great interest yesterday in the Daily Express the FSA has fined some mortgage providers for not treating thier customers fairly. Part of that was to do with chargesd which were levied when payments are not made. I believe the highest was £45. This is exactly the same case as with charges, are current accounts not subject to the same rules?

nsabournemouth

Is it woth sending in a letter to my bank with the bits of info from the updated article just to test the water and see what sort of response i get or hold on for the new template letter?

Regarding the template letter when do we expect to hear of news or see these templates?

Cookiecrumble

Help Please. I received the letter that many others got dated 18th Dec from First Direct. And a letter from their solicitors stating they were applying to the court to have my claim 'struck out'.
Today I have received a letter from the court stating I have 7 days to reply or my claim will be struck out. I don't know what to do now!!

esmerellda

Hi, you need to write to the court asking them not to strike the claim and to allow you to enter new POCS. does the order mention summary judgment ?

Will help you with letters/application if you want to continue. You will have to pay application fee of approx £75 to the court.