CO-OP Bank Letter Not Acting in accordance with Credit Act (compensation?)

antrobus

-taff wrote: »

That link from antrobus was published in October 2013.

Indeed it was. However there does not appear to have been any update from the Co-Op Bank since then. At least none that I can find. So we remain none the wiser as to (a) the nature of this technical breach of the CCA or (b) what redress effected customers can expect to receive.

Perhaps the Co-Op is preoccupied with more important things like executive pay, or an upcoming £2 bn loss?:)

magpiecottage

I agree, antrobus. I suspect that the problem was discovered in October and provision was made for remedial work and a possible fine.

However, provisioning is really rainy day money. It is money you put aside just in case whilst hoping you will not need to spend it.

Some of that money will have been spent on rectifying their systems to address the risk of it happening again. Some will have been spent on the mailing. Some will be put aside in case the FCA fines them. Some will have been put aside to deal with the administrative cost of dealing with spurious complaints about it.

Some will be to refund interest charged during the period of non compliance - but writing off loans altogether is not going to happen.

loopdaloop

http://www.dailymail.co.uk/news/article-2585848/Thousands-300-refund-banks-17-agree-pay-making-blunder.html
Thousands to get £300 refund from their banks: 17 agree to pay up after making blunder on wording of credit agreements

• Some customers hit with charges over long period could receive £1,000
• Lenders not named but believed to include most big high street names
• Industry faces £600m bill after banks breached Consumer Credit Act
  

By Sean Poulter
PUBLISHED: 02:12, 21 March 2014 | UPDATED: 08:38, 21 March 2014


Nearly half a million people are to receive surprise bank refunds averaging £300 on charges and interest rate debts run up on credit cards, loans, HP and store cards.
Seventeen leading banks and building societies have agreed to pay up after making a blunder on the wording of credit agreements and penalty notices, the Office of Fair Trading revealed yesterday.
Some customers who were hit with penalty charges and interest rate fees over a long period could receive more than £1,000.

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Bank refunds: Some customers who were hit with penalty charges and interest rate fees over a long period could receive more than £1,000 (file picture)


While the OFT has not named them, the 17 lenders involved are believed to include most, if not all, of the big high street names.
Their £149million bill comes on top of around £370million that Barclays and Northern Rock have agreed to pay, plus an undisclosed sum from the Co-op Bank.
In total, the finance industry faces a bill of more than £600million because executives failed to ensure documents complied with the Consumer Credit Act 1974.
Many people who were hit with the charges, which have now been ruled illegal and unfair, will have suffered real hardship as a result, perhaps struggling to put food on the table or pay the mortgage.

More...


The fact that they were not keeping up with debt repayments means they are likely to have been suffering money troubles that will only have been made worse by the punishing late payment fees and interest charges.
The revelation represents a new blow for the banking industry, which already faces a bill of more than £20billion to refund charges linked to the sale of Payment Protection Insurance (PPI) alongside loans, cards and mortgages.
While the average refund will be some £300, some people who were hit with penalty charges and interest rate fees over a long period could be entitled to payments of more than £1,000.


Since October 2008, lenders have been obliged to send periodic statements to customers containing specific information and wording.
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Revelation: The Office of Fair Trading said seventeen leading banks and building societies have agreed to pay up after making a blunder on the wording of credit agreements and penalty notices

However, a bank or finance company that fails to provide the periodic statement using the correct wording is not entitled to enforce the agreement and the customer is not liable to pay interest or default sums.
The money is to be repaid after the OFT wrote to 50 banks and building societies in November 2013 asking them to confirm that they had fully discharged their obligations to provide post contract information under the Consumer Credit Act.

'These issues were not deliberate misconduct, but the institutions concerned should have ensured they were complying with the law'
David Fisher, Office of Fair Trading director of consumer credit


David Fisher, the OFT’s director of consumer credit, said: ‘These issues were not deliberate misconduct, but the institutions concerned should have ensured they were complying with the law.
‘The OFT welcomes the proactive steps taken to return money to customers where it was incorrectly charged.’
The OFT said customers do not need to take any action because the banks and building societies involved have agreed to contact all the customers involved.
That raises the question as to whether consumers can trust the banks to do the right thing and take reasonable steps to trace all the people who are out of pocket and due a refund.


There is also a question as to whether the refund will only cover the specific charges and not any additional compensation to hardship and inconvenience.

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High street names: The banks' £149million bill comes on top of around £370million that Barclays and Northern Rock have agreed to pay, plus an undisclosed sum from the Co-op Bank



The OFT said it is up to the bank to decide whether to add interest to the value of any refund of fees and charges.
It said customer who feel aggrieved and would like to pursue additional compensation should contact the bank concerned and then, if necessary, the Financial Ombudsman Service.
The OFT has not named the 17 banks and building societies involved, however the group is believed to include most if not all the major high street names.
'We want regulators to clamp down on excessive fees and charges so that borrowers are treated fairly whatever form of credit they’re using'
Richard Lloyd, Which? executive director


Which? executive director Richard Lloyd said: ‘It’s good to see the OFT taking this action but it should name and shame the 17 lenders involved so that customers are aware that they might be due compensation.
‘We’d also like some assurances about how lenders will contact people who were affected but are no longer their customers.
‘We want regulators to clamp down on excessive fees and charges so that borrowers are treated fairly whatever form of credit they’re using.’
Lloyds confirmed it will be making refunds, but refused to say how many customers are involved.
It said: ‘We are committed to ensuring that we provide our customers with the right information about credit agreements they have with us.
‘We have taken part in the OFT exercise and are now working to address cases where this has not happened. We will contact any affected customers in due course.’

Best news I've heard for a long time that
"the customer is not liable to pay interest or default sums."
Which means I've just calculated a tidy sum to be returned.

I wonder what level of interest we can charge them on top of our sum's to be returned?
Do you think we could get it at the same rate they wished to charge us?

I'm looking forward to my next chat with the co-op.

PS: Good Job Magpiecottage doesn't "advise consumers for reward."
However if this is not the case for anyone, I saw this website
http://www.canter-law.co.uk/professional-negligence/Claims-Against-Financial-Advisors
- I'm sure others are available.

Did I deserve it? / Do Bankers deserve bonuses?
Should people obey laws? / Should institutions be above laws?

Some interesting subjects for future debate.

speed_ie wrote: »

They cannot have it both ways.

Agree thoroughly.

PeterPPI

I have just had a response from the FOS re my PPI claim against Britannia Building Society (now Coop) turned down due to continuing over the 6 months period to complain to the FOS
Britannia delayed sending me information and now I have missed the period when I can get my money back
Has anyone else had this and taken it forward
The FOS also gave me incorrect advice from different agents dealing with my claim
First it was that they were supporting my claim then they pulled that and called me to say forget it

dunstonh

PeterPPI wrote: »

I have just had a response from the FOS re my PPI claim against Britannia Building Society (now Coop) turned down due to continuing over the 6 months period to complain to the FOS
Britannia delayed sending me information and now I have missed the period when I can get my money back
Has anyone else had this and taken it forward
The FOS also gave me incorrect advice from different agents dealing with my claim
First it was that they were supporting my claim then they pulled that and called me to say forget it

Please post on your own thread and not on an existing thread on a totally unrelated subject.

antrobus

-taff wrote: »

That link from antrobus was published in October 2013.

And here's (some kind of) an update.

Co-op Bank seeks extra capital
http://www.bbc.co.uk/news/business-26711709

More dead bodies have been found to the tune of £400m's worth.

It has announced this morning that it needs to raise another £400m of capital, having uncovered an unexpected and additional £400m of costs or charges related to past misconduct and poor documentation.

The biggest contributors to these £400m costs, according to the chief executive Niall Booker, are restitution for PPI mis-selling, breaches of the Consumer Credit Act and a variety of lapses in the provision of mortgages.

Which some will see as not bad going for a bank whose public branding was all about being ethical.

monkeyclown

hi stumbled across this article thought it might be interesting update, if you guys are still waiting to hear??

monkeyclown

oh sorry it won't let me post the link says i am a new user - if you go the website thegrocer, and search consumer credit act it is the top article that comes up. dated 29 march 2014. sorry bit of a pain - no idea why it won't let me just put the link. oh well

StirlingDave

Here's that article:
http://www.thegrocer.co.uk/companies/supermarkets/the-co-operative-group/programming-error-to-blame-for-co-op-banks-400m-bill/356022.article

£400m for some letters being posted three days late is indeed a harsh penalty. It's hard to see how that is any different to them being held up in a postal strike in terms of how it affects the consumer.

Still, I doubt there would be no reprieve for me if I paid a loan repayment late due to my automated payment system be set for the wrong day. So there's little sympathy for them having to essential pay the sort of late transaction charges they set for others.

monkeyclown

thanks for posting the link Dave.

No it is harsh i agree, but then this is a multi million pound corporation, ultimately they should abide by the rules. They have to send one letter a year, its not tough is it really.

And when i went overdrawn by three days, the coop charged me they didnt have any sympathy for my situation so i am not sure why i should have sympathy for theres.