How long can this situation persist?

davidgmmafan

I need to research this a little more but I've had this question brewing for sometime. I am not amused that the banks seem to have got off scot free with the decision going thier way in the Supreme Court. The charges themselves would be bad enough on their own but they should not be viewed in isolation.

As others who have been following things for sometime may be aware there are a whole host of issues which are intertwined with the issue of bank charges. IMO the two greatest evils are the way charge can a do start an inescapable snowball of charges, and how the bank is able to appoint itself prority creditor, over and above all others.

The FSA has recently expressed concerns about certain banks (which it will not name) being very poor at dealing with complaints. I can't say I am surprised to see comments about sending template letters which do not address the customers concerns... I'm sure most people who have ever complained to thier bank have seen several of those. On the one hand a response may be the opposite of what the customer wants because of a particular banks policy. I understand that but why is when a customer asks a straight forward question like why are you charges so high? the bank responds with something like it may be useful to explain how the charges work.

That isn't really answering the question. I've refrained here from re-stating my earlier assertions that the banks lied to people about the nature of the charges, I'm going to go through all letters recieved regarding charges and this defence to see what they did in fact say.

So the FSA, threatened with possible abolition, suddenly jerks into life and makes comments on an issue it should've been looking at YEARS ago.

Another common complaint relates to the fact that customers have little ability to opt out of charges. The recent OFT report (which was pretty pathetic IMO) seems optimistic that banks are changing. As far as I could tell this was based on HSBC launching an account where you don't have charges if you pay £10/month. One account does not suggest a change in the banking world generally.

I also object to the OFT's tone throughout the report as it seems to suggest that things are improving, and no firm timescale is needed... The bank charges issue started to be picked up by the papers in 2005... Five years later the charges have come down, a bit. Woo hoo, big deal.

Nobody seems to care to enquire WHY charges were SO uniform in a so called competitive market. Could it be, as many have speculated, because there was some kind of agreement in the industry? I recall seeing a transcript from evidence given to the Treausry Select Comittee where this was admitted, I forget the chaps name, HBOS head honcho I think.

What astonishes me is that some people still support the banks. We've got the FSA saying they are pretty dire at handling complaints (which most customers could've told them), the FOS saying when the waiver was in place (supposedly to safeguard vulnerable customers whilst the test case as in progress) many banks were pretty much ignoring it, and the OFT has pretty much given up. I mean how much more evidence do you need? The facts are so damning and yet the banks have got off scotfree.

I'm going to pull all this kind of info together, to see how damning it looks on paper properly supported and see what can be done with it. I believe the current account 'market' is not competitive in any sense of the word and, contrary to the OFT's position I simply don't think its acceptable to trundle along for another couple of years assuming that the banks aren't really so bad and somehow, this time, will have thier customers interests at heart.

The only way I see this getting resolved equitably is through legislation, possibly intervention from the competition authorities, but that seems to have disappeared from the menu too...

Why can't the FSA, OFT and FOS come together and say to the banks ok you've had a decent run, now lets sort this out properly since you cannot manage it yourselves. A bit like the media did with MP's expenses. Bank charges is far worse, it affects more people, and involves huge sums of money...

Premier_2

davidgmmafan wrote: »

...
Why can't the FSA, OFT and FOS come together and say to the banks ok you've had a decent run, now lets sort this out properly since you cannot manage it yourselves. A bit like the media did with MP's expenses. Bank charges is far worse, it affects more people, and involves huge sums of money...

The problem with MP's expenses (ignoring the few where alleged fraud has been involved) was that there were no clear rules and so some claimants exploited that position.

The bank charges are all charged in accordance with the clearly defined terms of the bank to which the customer agreed to pay. No one has proven that such terms are unfair or illegal.

natweststaffmember

davidgmmafan wrote: »

I need to research this a little more but I've had this question brewing for sometime. I am not amused that the banks seem to have got off scot free with the decision going thier way in the Supreme Court. The charges themselves would be bad enough on their own but they should not be viewed in isolation.
Can you be more precise? The banks as we know are allowed to charge for a package of services and the charges cannot be challenged as being excessive or the level of that charge. The charges are not penalties in law(albeit we should have seen that bit of the judgement before but some of us were blind not to read it beforehand)
As others who have been following things for sometime may be aware there are a whole host of issues which are intertwined with the issue of bank charges. IMO the two greatest evils are the way charge can a do start an inescapable snowball of charges, and how the bank is able to appoint itself prority creditor, over and above all others.
I agree with you but, devil's advocate here, there is data showing that the bank will prioritise payments to be made/returned based on which one is a priority ie mortgage./rent etc,etc,
The FSA has recently expressed concerns about certain banks (which it will not name) being very poor at dealing with complaints. I can't say I am surprised to see comments about sending template letters which do not address the customers concerns... I'm sure most people who have ever complained to thier bank have seen several of those. On the one hand a response may be the opposite of what the customer wants because of a particular banks policy. I understand that but why is when a customer asks a straight forward question like why are you charges so high? the bank responds with something like it may be useful to explain how the charges work.
If you know how the charges work then surely that is the first step to avoiding them. That has been my viewpoint for the last 4 years which is why you have seen the NatWest charges guide which helps to explain what the charges were and how they work across the internet forums. I wrote them for that reason. It is important to understand how the charges work(again FSA work, i believe has shown that many people do not know how the charges work so are incapable, for want of a better word, of avoiding further charges).

That isn't really answering the question. I've refrained here from re-stating my earlier assertions that the banks lied to people about the nature of the charges, I'm going to go through all letters recieved regarding charges and this defence to see what they did in fact say.

So the FSA, threatened with possible abolition, suddenly jerks into life and makes comments on an issue it should've been looking at YEARS ago.
Words without actions are useless to be honest.
Another common complaint relates to the fact that customers have little ability to opt out of charges. The recent OFT report (which was pretty pathetic IMO) seems optimistic that banks are changing. As far as I could tell this was based on HSBC launching an account where you don't have charges if you pay £10/month. One account does not suggest a change in the banking world generally.
OFT are looking at this issue as we speak. Furthermore, I prefer the US method which is an opt into overdraft services rather than an either automatic opt in or a kinda quasi pay for the bank to do what they should be doing anyway.
I also object to the OFT's tone throughout the report as it seems to suggest that things are improving, and no firm timescale is needed... The bank charges issue started to be picked up by the papers in 2005... Five years later the charges have come down, a bit. Woo hoo, big deal.
The bank issues case has only picked up midway through 2006 and the test case was announced less then 12 months later(hardly not doing anything).
Nobody seems to care to enquire WHY charges were SO uniform in a so called competitive market. Could it be, as many have speculated, because there was some kind of agreement in the industry? I recall seeing a transcript from evidence given to the Treausry Select Comittee where this was admitted, I forget the chaps name, HBOS head honcho I think.
It was given to the Scottish Select Committe by the HBOS head whose name escapes me as well, lol.
What astonishes me is that some people still support the banks. We've got the FSA saying they are pretty dire at handling complaints (which most customers could've told them), the FOS saying when the waiver was in place (supposedly to safeguard vulnerable customers whilst the test case as in progress) many banks were pretty much ignoring it, and the OFT has pretty much given up. I mean how much more evidence do you need? The facts are so damning and yet the banks have got off scotfree.
There is good and bad in all institutions.

I'm going to pull all this kind of info together, to see how damning it looks on paper properly supported and see what can be done with it. I believe the current account 'market' is not competitive in any sense of the word and, contrary to the OFT's position I simply don't think its acceptable to trundle along for another couple of years assuming that the banks aren't really so bad and somehow, this time, will have thier customers interests at heart.

I think working with the regulator might help rather than against it as well(not that it couldn't be better).
The only way I see this getting resolved equitably is through legislation, possibly intervention from the competition authorities, but that seems to have disappeared from the menu too...

Why can't the FSA, OFT and FOS come together and say to the banks ok you've had a decent run, now lets sort this out properly since you cannot manage it yourselves. A bit like the media did with MP's expenses. Bank charges is far worse, it affects more people, and involves huge sums of money...

You have to be fair to both the bank and the customers. UTCCR 1999 is about fairness between everyone not just let's make it 80/20 to the customer.

davidgmmafan

"The bank charges are all charged in accordance with the clearly defined terms of the bank to which the customer agreed to pay. No one has proven that such terms are unfair or illegal."

Ahh yes the magical consent. If I hold a gun to your head is your consent valid? Clearly not. If the only 'choice' is between similarly rubbish contracts in which the terms and the charges are uniform where's the evidence of this competitive market that's supposed to exist?

And what about good faith? There WAS a condition on the rules governing MP's expenses to the effect that, when claiming, they should consider if what they were claiming for could be justified to thier constituents. This was the spirit of the rules (and agree they were not enforced at all).

Similarly I believe the banks do, and indeed should, have a duty to act in utmost good faith because of thier unique status and power.

"I agree with you but, devil's advocate here, there is data showing that the bank will prioritise payments to be made/returned based on which one is a priority ie mortgage./rent etc,etc,"

You forgot thier charges

We both know they WILL apply/take these, consequences be damned (cos they know full well the most likely consequence will be more charges).

When I say the banks explain the charges I don't mean that they explain how they work, because they don't do that. If the customers asks something like I understand WHY there are charges but why are they so cripplingly high the bank WILL NOT answer this point because there is no answer other than to keep us rolling in the easy money.

You can be as specific as you like in your complaint and on the whole you will not ger anything other than the 'best fit' template.

"OFT are looking at this issue as we speak. Furthermore, I prefer the US method which is an opt into overdraft services rather than an either automatic opt in or a kinda quasi pay for the bank to do what they should be doing anyway."

Woo hoo they're looking into it. I'm sure that strikes fear into the heart of evil doers everywhere... Sreiously what does this mean... What are the timescales? (there really are none), what is the criteria by which success or failure will be judged? (again no idea, because they don't say).

I agree that they should be opt out, I see no problem with the banks offering inducements, like companies do to promote direct debits for example, for people to have accounts on which they can incur charges.

However at the moment what happens is everyone has the potential to get shafted, and it all rests on some meaningless notion of consent.

The banks current default position is the fees have been properly charged. Well that's big of them, they managed to apply the charges which are laid down in a contract they have total control over. Thank God we live in such a free and fair country...

The question, which has not been asked by the OFT, is how did such a uniform system occur? I fail to see how, without understanding this, they can achieve lasting change.

natweststaffmember

davidgmmafan wrote: »

"The bank charges are all charged in accordance with the clearly defined terms of the bank to which the customer agreed to pay. No one has proven that such terms are unfair or illegal."

Ahh yes the magical consent. If I hold a gun to your head is your consent valid? Clearly not. If the only 'choice' is between similarly rubbish contracts in which the terms and the charges are uniform where's the evidence of this competitive market that's supposed to exist?

And what about good faith? There WAS a condition on the rules governing MP's expenses to the effect that, when claiming, they should consider if what they were claiming for could be justified to thier constituents. This was the spirit of the rules (and agree they were not enforced at all).
We aren't talking about MP's are we?
Similarly I believe the banks do, and indeed should, have a duty to act in utmost good faith because of thier unique status and power.

"I agree with you but, devil's advocate here, there is data showing that the bank will prioritise payments to be made/returned based on which one is a priority ie mortgage./rent etc,etc,"

You forgot thier charges

We both know they WILL apply/take these, consequences be damned (cos they know full well the most likely consequence will be more charges).

When I say the banks explain the charges I don't mean that they explain how they work, because they don't do that. If the customers asks something like I understand WHY there are charges but why are they so cripplingly high the bank WILL NOT answer this point because there is no answer other than to keep us rolling in the easy money.
Level of charges or how much is not relevant to any bank charges claimant so my answer would be, so what? You worked for a financial institution so did you know the true cost? I certainly didn't.
You can be as specific as you like in your complaint and on the whole you will not ger anything other than the 'best fit' template.

"OFT are looking at this issue as we speak. Furthermore, I prefer the US method which is an opt into overdraft services rather than an either automatic opt in or a kinda quasi pay for the bank to do what they should be doing anyway."

Woo hoo they're looking into it. I'm sure that strikes fear into the heart of evil doers everywhere... Sreiously what does this mean... What are the timescales? (there really are none), what is the criteria by which success or failure will be judged? (again no idea, because they don't say).
Have you actually taken your !!!! out of CAG for one minute and looked at the OFT stuff? It contains timelines and dates. Sometimes you have got to understand that you have got to sometimes work with the devil if you want to achieve anything rather than simply being deluded that somehow not doing so is better. Things do not happen overnight so have some patience.
I agree that they should be opt out, I see no problem with the banks offering inducements, like companies do to promote direct debits for example, for people to have accounts on which they can incur charges.
I prefer the OPT OUT but I think that the regulators are missing a trick.
However at the moment what happens is everyone has the potential to get shafted, and it all rests on some meaningless notion of consent.
Opt in is consent so people with overdrafts will have to opt in or repay the overdraft. Some of the ridiculous comments on here ie would you prefer to have your shopping declined during Saturday rush hour in the shops would go. The simple answer to the question is yes I bloody would.
The banks current default position is the fees have been properly charged. Well that's big of them, they managed to apply the charges which are laid down in a contract they have total control over. Thank God we live in such a free and fair country...
They charged fees which are within the contract, that is a basic fact. You find me one case where they have charged something that is not in the contract?
The question, which has not been asked by the OFT, is how did such a uniform system occur? I fail to see how, without understanding this, they can achieve lasting change.

The reason they aren't asking the question is that they are looking at the future of banking not the historic past of banking. Do ya get it yet?

davidgmmafan

"The reason they aren't asking the question is that they are looking at the future of baking not the historic past of banking. Do ya get it yet?"

In a sense, but I do feel it is a very important question. If they don't answer it can they really take effective action in the future?
To recap there is nothing to stop the charges increasing again, save media pressure. If they did the OFT cannot take any action since they lost in court, which is the same sanction they threatened for credit card charges which the banks have not challenged.

Also I would add regarding MP's expenses, if people want to be picky about it, it has not been proved that there was anything illegal done by MP's. There are some prosecutions in the offing, but as yet no proof. Yet many many MP's paid back vast sums because what they were doing was clearly dis-honest. There isn't a law against flipping, or having a different address for tax purposes but the law isn't perfect, most would agree there should be such a law.

At one point I believe it was not a crime to take ptrol without paying, but that action is not to be condoned. I fail to see the difference between these kind of things and bank chares.

Natwest unpaid item is now £5, old rate was £38 I believe which is what 600% more? And yet they maintian both set of cahrges are fair and reasonable.

Premier_2

davidgmmafan wrote: »

... Natwest unpaid item is now £5, old rate was £38 I believe which is what 600% more? And yet they maintian both set of cahrges are fair and reasonable.

Attempting to argue that bank charges are or were unfair based purely on the amount charged (i.e. 'value for money') is futile - you will always be pointed back to the Supreme Court ruling in that matter

Premier_2

davidgmmafan wrote: »

...many many MP's paid back vast sums because what they were doing was clearly dis-honest. ...

On the whole, I disagree with that assumption.

Ignoring those few where criminal prosecutions are expected, on the whole I don't think it is correct to say they are dishonest. They claimed money because they thought they were entitled to it, and as it was a self regulating procedure, there was no one to correct it at the time. Have you never submitted an expenses claim only to have it returned? I know I have many a time and I don't think I'm dishonest. Presumably nor do my employers else I wouldn't be working for them.

I don't believe the Prime Minister at the time thought what he was doing was dishonest. He even claimed he didn't know about the expenses issues until it was blown up. He ended up paying back over £12k himself.

I'm sure the current Prime Minster, 'Dave' doesn't consider he was dishonest in his claims - but he too had some money to pay back.

... and let us not forget, the squeaky clean, whiter than white current Deputy Prime Minister, Clegg, who had much to say about the wrongs of MP's expenses claims in the run up to the election ... I understand he paid back about 4x the amount Cameron did.

Many MPs paid back because, after review by Sir Thomas Legg, they were asked to do so and were also under pressure from party leaders to do so. That is presumably why the party leaders repaid without question but doesn't imply their claims were in any way made dishonestly, more that their claims were perhaps a mistake in understanding the few and vague rules that applied.

Indeed, even Sir Thomas Legg didn't seem to know the rules totally because 44 MP's who appealed against their requests for repayment had the amount annulled or reduced on appeal. And we are talking serious amounts here. e.g. Bernard Jenkin has a repayment request reduced from over £63k to £27k on appeal whilst Peter Lilley who was asked to pay back over £40k originally (the third largest repayment request) had that request cancelled completely on appeal. Jeremy Brown, originally asked to pay back almost £18k, reduced to £0 on appeal. David Clelland, originally expected to pay back £13401, reduced to about £300 on appeal .... there's loads more examples too!
Or was Sir Thomas Legg dishonest too in his findings?

On the other hand, there were those such as Phil Hope who was asked originally to pay back just over £4k by Sir Thomas Legg but felt that he would prefer to pay back 10x that amount on his own initiative.

Whilst what the some MPs claimed may not have been entirely appropriate, to suggest that their claims (in the main) and resultant repayments were made dishonestly is certainly not the clear case you believe it is.

davidgmmafan

Ok let me get this straight people paid money back even though they felt they hadn't done anything wrong, is that REALLY a logical position to take?

In effect what you are saying is, because the system was pporly policed, then anything goes. This is precisely the argument that so angered the public.

I feel there were short-comings in the investigation even because I feel there is no justification for taxpayers to subsidize elected representatives by paying interest on thier mortgages. Who wouldn't want an interesr free mortgage with increasing house prices?

Far better to simply have a block of apartments, owned by the stae, and ever MP gets one. No grubby enrichment, but facilities for those that need it.

To sum up then as far as your concerned everything was hunky dory with the system as it was and there was no need for change. All I can say to that is WOW.

Premier_2

davidgmmafan wrote: »

...In effect what you are saying is, because the system was pporly policed, then anything goes. This is precisely the argument that so angered the public...

Essentially yes, combined with the fact that there was little to police in the first place (i.e. no clearly defined rules)

And that is why the system has been changed so that clearer rules are now in place and an independant regulator appointed to oversee them, like an auditor if you will.

davidgmmafan wrote: »

...To sum up then as far as your concerned everything was hunky dory with the system as it was and there was no need for change...

Not at all. Whatever drew you to that somewhat odd conclusion? :huh:

natweststaffmember

David, and Premier for that matter, if you want the rules of claiming expenses then here is the link to the Green Book from 2003 onwards that may help explain the rules. Not sure if it will help your debate but here it is anyway:
http://www.parliament.uk/about/mps-and-lords/members/pay-mps/