MSE News: Leaked letter reveals banks' dirty tricks on PPI reclaiming

Alpine_Star

ILW wrote: »

Have they?

Yes. In very simple terms:

''We can pass information to the FSA and the OFT about any business they regulate or license that fails to co-operate with us. The FSA can – and does – take action against firms it regulates that refuse to do what the ombudsman has requested. And the OFT can take away or restrict the licence of businesses that break the rules.''

http://www.financial-ombudsman.org.uk/publications/factsheets/final_decision.pdf

ILW

Sorry, what I meant was have they actually used the law to force disclosure in this case?

Alpine_Star

ILW wrote: »

Sorry, what I meant was have they actually used the law to force disclosure in this case?

I don't know. But in the case of banks refusing to deal with FOS it wouldn't be instant as, like any regulator, the FSA are constrained by strict procedural obligations before they can take any enforcement action and I would imagine they'd issue a warning first.

ILW

Thanks for that, it does appear on the face of it that the banks are doing nothing wrong (legally speaking) and the headline could be considered rather misleading.

Alpine_Star

ILW wrote: »

Thanks for that, it does appear on the face of it that the banks are doing nothing wrong (legally speaking) and the headline could be considered rather misleading.

In the absence of any complaints handling waiver (which was in place during the bank charges test case) the banks are in breach of the FSA's rules - which are legally enforceable by an act of Parliament, until such time as a court quashes them. Not complying with certain rules on the strength of the banks asking a court to be able to challenge other rules has no legal standing that I'm aware of.

You've probably read the BBA's claim for Judicial Review but to get a balanced picture of the justification for their claim it's worth reading the Grounds of Resistance from the FSA & FOS.

http://www.legalbeagles.info/FSA_JR_Grounds_LegalBeagles.pdf

http://www.legalbeagles.info/FOS_JR_Grounds_LegalBeagles.pdf

jamesd

dunstonh wrote: »

James, thats not dirty tricks though.

Um, yes, it is. As a consumer I rely on the FOS to arbitrate disputes and the FSA to regulate banks. Here the bank has taken a view that it disagrees and is not going to comply with the requirements of either the regulator or arbitrator that I rely on when I enter into relationships with financial services companies.

Whether it realises it or not, HSBC is undermining my trust in that bank - one I have a banking and mortgage relationship with though its First Direct brand - by acting as it is here and subverting the bodies I rely on to resolve any disputes that may arise between us.

Its position is simply put that if it disagrees, it can ignore the process that's intended to resolve disputes and protect consumers. That's not a position that should be expected from any regulated business, nor is it one that's tolerable elsewhere - if a police officer tries to arrest you, even wrongly, your correct action is to play along and sort it out later, not resist arrest.

dunstonh wrote: »

The banks totally disagree with the FSAs retrospective rule changes.

I totally disagree with the government reducing income available in pension drawdown by 17% after I've made the contributions for which I was told to expect the previous level but I still have to live with it.

I do understand why banks will be reluctant to agree but here so far as I can see HSBC is doing it for every claim related to this matter, without even letting the FOS determine whether they are or aren't affected by anything that could be considered to be retrospective.

If some banks want to delay things then they should seek a waiver and also ensure that, working with the FOS, not subverting it, they let the FOS determine which cases are potentially affected. That would still be distressing to consumers but at least those not affected by any particular disagreement would still be able to get a just resolution and it would be in process instead of a subversion of process. It's a lot easier to trust an institution that's working within a process instead of subverting it.

machine22

Some of the comments on here are madness:
1) There is NO FSA waiver on PPI complaint handling rules.

A BBA spokeswoman said: “The only people who can put complaints on hold are the FSA, the Ombudsman or the courts.” '

The FSA's views on banks' practices are clear. A spokesman says: "Where a complaint against a respondent [such as a bank] is referred to the Ombudsman, the respondent MUST co-operate FULLY with the Ombudsman and comply promptly with any settlements or awards made by it."'

Why are the major banks allowed to ignore the BBA, the regulator, the FOS and the law that underpins all their actions?

2) Breaking the rules gives a competitive advance to those breaching the rule ahead of those (like Santander) following them. This is surely on unfair on compliant businesses and sends the green light to anyone wishing to break procedures in future because it could be cost effective to do so. Why are business interests of the bank’s competitors being trampled upon? (e.g. if they have less money because of PPI redress awards, they may not be able to offer the same level of service and could lose customers).

3) The FOS have an appeals process. If you think that the FOS are wrong you should engage with the CONTENT of an individual complaint. Refusing to send information is illegitimately scuppering the PROCESS. It therefore can be seen as a ‘‘dirty trick’’.

4) If the FOS are (in the banks opinion) still wrong after an appeal from an adjudicator they can call for judicial review on a Final Decision. I know there is debate about this because small businesses may not be in a financially secure position to call for JR. Barclays, RBS and HSBC can EASILY afford JR (if they can afford bonuses!). They can claim their costs from the FOS if they win. The only reason they don’t because they must doubt their chances of success.

5) Judicial Reviews should take place within three months of an ‘‘error in law’’. FOS ‘guidance’ was adhered to by FOS BEFORE late 2008 (at which point it was published as guidance to help businesses) it has been in force at least since 2008! HSBC are out of time to challenge it.

There is a difference of opinion on PPI. On one side are the banks and other - Santander, the FSA (with three extensive reviews and 24 fines), the (independent) Financial Ombusman Service , Martin Lewis, consumer groups (e.g. which), Citizen Advise Bureau (after their 2005 super complaint), The Office of Fair Trading, the Competition Commission, the Claims Managment Industry, the entire media (how many stories are there critical of the banks?) and most importantly their own ''valuable'' customers.

Alpine_Star

machine22 wrote: »

5) Judicial Reviews should take place within three months of an ‘‘error in law’’. FOS ‘guidance’ was adhered to by FOS BEFORE late 2008 (at which point it was published as guidance to help businesses) it has been in force at least since 2008! HSBC are out of time to challenge it.

Not only is the challenge necessarily out of time but the ''guidance'' that the BBA calls it isn't in fact guidance at all but an ''online resource'' of information. In my view it does not constitute a 'decision' and it is only decisions that can be challenged by way of Judicial Review.

In support of their claim against the FOS the BBA states that the FSA's policy document is ''inextricably linked'' to the FOS ''guidance'' but it is difficult to understand how the policy document could have any baring on information published by the FOS some 2 years earlier.

For the avoidance of doubt the court has yet to grant the BBA permission for a Judicial Review and it is the application hearing for JR that will take place on 25 January - not the Judicial Review itself.

Mr_CMC

Dunstoh,

I think you are a terrible actor.

Thankfully most have read between the lines vis-a-vis your woeful attempts to put the Joe public off the scent.

KEEP GOING PEOPLE!

Do not give up, it is what plants like dunny would have you do, don't fall for it.

I shall be posting more again soon, back from a winter break... and ready to go on the full attack against "them" again in 2011.

Mr CMC

jamesd

Dunstonh gets far too much in the way of personal attacks when people disagree, though, so do take care not to go into that sort of area - dunstonh is far to helpful a person to deserve such things.