What impact will the OFT have?

YorkshireBoy

jamalfatty wrote:

The section of my post you quoted said to prevent people claiming they would have to.

Point taken.

I believe they will need to, to stop all action being taken by all consumers, they will need to demonstrate that these charges are a genuine pre-estimate of their costs. Can you think of any other way they can do this?

In the absence of any precedent being able to be set in the small claims court, I think the only hope for the banks is that the judicial system finds a way (through sheer workload and frustration at the number of people 'using' the MCOL route - and there are grumbles at the moment from the judges according to press reports) to escalate a case to a higher court. It is at that point, I believe (as I said earlier) that the banks will refer to the OFT's upcoming 'ruling' (whatever that may be) as their "expert witness".

They are not allowed by law to build in profit margins to these charges

I still maintain that they *are* allowed to build in profit margins into all activities. After all, and ignoring the lawfulness or not, the banks are incurring costs in dealing with the application of 'default' charges. It's right then that they can profit (once a reasonable fee structure has been implemented) on these activities - just as they do with other aspects of their operations. And please remember that I'm talking about the administration of the default charges - not the level, frequency, or other aspects of them.

Agreed with your last point about Egg, just read through the report and hold my hands up, was wrong about that!

I didn't mention it to 'pull you up', merely to state fact.

jamalfatty

YorkshireBoy wrote:

I still maintain that they *are* allowed to build in profit margins into all activities. After all, and ignoring the lawfulness or not, the banks are incurring costs in dealing with the application of 'default' charges. It's right then that they can profit (once a reasonable fee structure has been implemented) on these activities - just as they do with other aspects of their operations. And please remember that I'm talking about the administration of the default charges - not the level, frequency, or other aspects of them.

We'll have to agree to disagree on this point

However, what your saying above would tie in with what many people are now experiencing whereby the banks are saying that in actual fact it isnt a penalty charge, it is in actual fact a service charge, in which case they could charge what they liked.
How they are going to assert the point that bouncing a cheque, sending you a letter, and charging you £35 is any kind of service though is another matter entirely

moofo

The OFT carries little weight in court and does not govern UK Law.
The banks must PROVE it costs £15 to send those letters.
Simple as that.
If they cannot prove the cost, it is still a profit making scheme and no court will find in favour of the banks.
This OFT ruling means nothing apart from lots of people will get part of their money back straight away.
All you need to do is file a claim in court for the rest and the Banks and credit card companies will have NO choice but to pay the remainder.
The OFT will no doubt be revising this situation when they find it has changed nothing of the situation.

Dumela

Hi. My first post.

Take a step back from the idea that your taking a BANK to the small claims court. If you take anyone/company to the small claims court stating they owe you money. The defendent has to explain clearly and provide evidence to support their explanation, why they don't owe you money.

Example - Happened to me....
Landlord failed to return deposit after end of tenancy. Claiming damage to furniture. Landlord failed to provide me with 1. evidence of damage 2. evidence of cost of repair/replacement. Took landlord to court, court required landlord to provide evidence of the ''costs'' landlord incurred as a result of my actions. Landlord failed to provide complete evidence. Court ruled in my favour.

Same applies to banks. Provide evidence of cost of customer going overdrawn, non dd payement etc. I will eat my hat if a bank agrees to provide such evidence.

Also, consider this. If banks and CC folk get a date at which the OFT will accept them charging £12 that is still a nice profit of at at least £7.50 per charge.

Final thought for the day.

Worst case senario. Lets suppose you dont agree to accept your bank offer of a refund of charges excluding £12 per charge. You take your bank to small claims court and the judge rules that the £12 OFT suggestion should apply. You will still be able to claim 8% on the difference between the £12 and your actual charges. So basically it will always pay to go all the way on this issue. According to moneysaving expert own calcualtor a £35 charge accrued 6 years ago, subtract the £12, add the interest according to court rules and you still stand to get around £34 back on the £23 refunded.

robbog

WHEN IS THE OFT REPORT BEING PUBLISHED?

spoke to Alliance & Leicester about my county claim deadline tomorrow and they said they were "very interested in the OFT Report which was coming out today as ""they were all customers themselves!!!!!!" - but still wouldn't give me any more than £350 on a £2000 charge!:rolleyes:

Roll On MoneyClaim!!!!

mjanet

I do not know why everyone is panicking over the OFT statement as it will make no difference to you reclaiming your charges. A penalty charge is unenforceable in its entirety that means you claim EVERY penny back until the bank can prove ,by full disclosure , to a judge that it is not a penalty charge .

OFT and the banks will soon realise that this latest whitewash of a 'recommended' charge is not worth the paper it is written on .So I have no idea why people are scaremongering or saying you will only be able to claim the difference from April as that statement is totally untrue as has been shown with reclaiming Credit Card charges since the OFT report on them.

As for some people saying it will be a gamble after April , again , misinformed advice.

Maybe before people give advice to others they should first be sure of their facts .

dauwalder

Martin - We have followed your process and are currrently awaiting the banks response to the claim. Just one little query - The text that you provide to paste into the online claim is slightly over the top by the time you fill in the gaps. There is a maximum number of digits allowed on the format. Apart from that with us it is so far so good. We issued the claim last week. The process for us started on December 12th. The bank ignored the first couple of letters and then offered us £520 against £1524 worth of charges. After declining their offer and giving them two further oportunities to set the record straight all we got from the was a letter saying that they will no longer be able to provide a current account for us from April 30th - What makes this interesting is that we have a Mortgage with them (Barclays) on which they compel that the monthly repayment has to come out of a Barclays account - Will be interesting to see how they expect me to pay my mortgage from May !

SkintBint

I have successfully claimed against HSBC and First Direct and neither bank threatened to close my account. I took the advice of this site and opened a parachute account anyway beforehand as I'm paranoid...

Some people HAVE had their accounts closed - I haven't got the link now but someone won compensation from Alliance & Leicester because they closed his account, but the ruling was that the account had to stay closed. Unless the compensation was large I fail to see how that's any use. :mad:

I'm in the process of claiming back from creditcards now and I am very worried about the threat of closing down creditcards if you make a court case against the company as they use the excuse that the 'client-provider relationship as irrevocably broken down'.

I'm not sure if they are allowed to suddenly demand the whole outstanding balance back [someone correct me] but perhaps you are allowed to pay back a certain amount per month. Still pointless if charges you claimed back are a small in proportion compared to your balance... Also if they do allow you to pay back some per month how does this work? Do they effectively change it to a loan? What rate of interest will it be at? Will any of this effect your credit record????

Woops sorry just realised I've been typing loads :rolleyes:

pnmehjay

I would suggest that you get new accounts set up somewhere else before trying to claim your charges back. These organisations are very quick to close your account for you, seemingly in a fit of pique.

I have had the problem that I want to open an account elsewhere but because of the charges roller-coaster that I have been caught in, my credit rating has been trashed and no other bank will give me a useable account. I would like to claim but they have me between a rock and a hard place.

SkintBint

I am talking about creditcards.