As I understand it, Mr. Justice Smith was not asked to rule whether the charges were illegal or unfair - only whether the present T&Cs could be assessed for unfairness under the UTCCRs *or* the common-law rules about liquidated damages. I agree that it would have been better to consider the historical T&Cs as well, and especially the delta between the versions. However, this is my prediction of the course of events: - The banks already realise that the common-law rules on breach of contract remedies don't support their position, and that consumers are getting remarkably savvy of this fact. - The OFT will almost certainly find that the replacement clauses, describing the charges as "fees for services", are also unfair under the UTCCRs, whether they take the history into account or not. The judgement just handed down confirms unambiguously that they can do this, which is what they asked for. - They will thus unilaterally strike these clauses from the present T&Cs as applied to consumers, and banks will not be allowed to enter into new consumer contracts that contain them. The banks will probably be required to return the past charges wholesale. - The banks will then have to come up with a new charging structure that is fair(er), and they will probably apply it to ordinary business accounts as well for consistency. They almost certainly won't go directly back to the old system. They might stick to the new system, but with smaller fees that they can demonstrate reflect their actual costs. Personally, I would welcome a free-banking system that allowed anyone to use an account in credit only, with no overdraft, no interest given on balances but no charges applied on unpaid items. Even better is if it had a proper debit card, not a cash card as on "basic" accounts, but with the cheque-guarantee facility removed. The bank would get enough investment interest on credit balances to operate the account, and retailers already fund the debit card system.

TideTurner: From my reading of the decision, that assessment is accurate only for the *present* T&Cs. The *historical* T&Cs operate on the breach-of-contract mechanism, unlike the present ones, and are thus subject to the common-law rules.

I think Mr. Justice Smith has a great deal of common sense in him. Of course he has also written out his (very important) judgement with extreme care and thoroughness, which makes it more difficult to read by a layman. The take-away message from it is threefold: - The OFT may go ahead with it's fairness assessment under the UTCCRs. - The *present* T&Cs used by the banks do not use the breach-of-contract mechanism to levy the charges, and therefore the question of whether they are penalty charges under common-law is moot. - The *historical* T&Cs which were in use a couple of years ago are significantly different in this precise area. These older T&Cs were not examined for this judgement, but *I* personally believe that if they had been, they would have been determined to use the breach-of-contract mechanism. This would have made them suitable for application of the common-law rules (as they are in any case).

I read the decision myself - 119 pages of dense legalese is not fun to wade through - and I can expand specifically on the "breach of contract" problem. The judge determined that the mechanism by which the *present* T&Cs of all eight banks convert Relevant Instructions to Relevant Charges is *not* by breach-of-contract on the part of the customer, and therefore also neither liquidated-damages or penalty-charges. Instead, they describe the Relevant Charges as fees for particular services, facilities or processes, and thus form part of the contract proper rather than a remedy for it's breach. However, he did not examine or rule on the *historical* T&Cs issued by the banks in earlier years, for example the Natwest T&Cs I was bound to in 2005. These old terms are significantly different, and do invoke breach-of-contract in order to justify the Relevant Charges upon a Relevant Instruction. So, for the benefit of business customers who canot rely on the UTCCRs, I would advise them to check the contemporary T&Cs for all the periods in which Relevant Charges were levied, and determine whether a breach of contract was responsible as opposed to a fee for a service. If this is the case for some or all of your charges, you may claim under the common-law rules for those specific charges. (IANAL, just a bored computer guy.)

As a clarification exercise, I have actually just read the 119-page blob of legalese, and there are a couple of points that most people haven't realised. The judge determined that the *present* T&Cs used by the banks do not operate on the "breach of contract" principle when levying Relevant Charges. He said nothing at all about *historical* T&Cs, such as those in effect when I reclaimed my charges in 2005. I get the distinct impression that if he *had* considered these historical terms, he would have found them to operate in the "breach of contract" mode, and thus subject to the "penalty charge" rules in common law. So if you have old charges to reclaim, you may do so under the penalty-charge rules if your T&Cs for the time period in question allow. This is mostly helpful to business claimants. The *other* ruling is that the OFT has free reign to apply the UTCCRs to the current T&Cs and their Relevant Charges. This is *good* because it probably means that the charges will be disallowed or greatly reduced. The judge's reasoning in this matter is extremely involved, but I believe that the banks will find it extremely difficult to wriggle out from under it. Part of the latter decision, for example, is that the Unpaid Item Fee is most certainly not a "fee for a service", because no service is provided to the consumer holding the account. This is plainly obvious to the layman, and that fact formed part of his reasoning. The other Relevant Charges were determined not to be "fees for a service" by a different and more complex reasoning.

Personally, I would go to the court office in person and ask the court staff what happened. They cannot give legal advice, but they *can* deal with matters of court procedure. And since you are actually standing there with papers in hand, they have very little chance of ignoring you.

The test results don't look accurate to me. I see on the aggregate results page that most people seem to be getting far more than the advertised rate, and indeed often faster than the technology should be able to provide. This might be due to caching in the browser.

No, no, no, no, Mark. The OP did not instruct Plusnet to disconnect his service. BT did that off their own bat. They appear to have confused the OP and his delinquent flatmate, the latter of which has a BT account. What I would like to know, however, is whether the broadband comes in on the same physical line as the voice service. This would explain why the broadband and the voice are seemingly linked. However, it is very clear that Plusnet should not be continuing to charge you while not providing a service. I would say so in strong terms in a letter, and cancel the Direct Debit to be certain. Oh, and take a clue-by-four to your flatmate.

There have also been problems with "typosquatting", where unscrupulous people buy domain names that are *similar* to actual domain names, and put either pay-per-view advertising or "unsavoury content" on them. The backlash against this has caught some legitimate people however, such as "mikerowesoft.com" which was set up by a software engineer called Mike Rowe, but the name was then turned over to Microsoft by the registrar. Nominet is not a public body, but they *are* the authority for .uk domain names. As a result, they have a duty to correct instances of domain-squatting and typosquatting. However, if you are doing neither of these things and can show legitimate interest in the domain name in question, you should - morally at least - be able to get it back.

A tricky situation, I think. I will say that Renault engines are *usually* reliable, and have been known to last longer than the rest of the car - especially with older 70's and 80's Renault bodies that were extremely rust-prone. 90k miles is very early for a complete seize-up in a regularly-serviced engine. However, I don't know anything about vehicle finance, so I can't directly help you figure out who should be responsible for the seized engine. I would read your agreements carefully, looking for warranty terms.

Sounds like a fun car to drive. ;-) Have you considered taking it to another reputable garage for a second opinion? It sounds as though either you have a seriously lemon-flavoured car, or your garage is leading you on a merry dance.

I've encountered the same trouble. The Banking Code - at least the version I dealt with in 2005 - states that banks *must* act sympathetically if you have told them about financial difficulties. I did that as soon as I got in trouble with their charges and had found out about my rights, and they flatly ignored it. In fact, banks seem to ignore the Banking Code whenever it suits them to. They don't even blink when you mention it by name or spell out their obligations. Nobody holds them to account for it. Yet they still proudly advertise that they comply with it, year after year, revision after revision. I think this is a Trading or Advertising Standards issue.

I agree with this completely. While I haven't been in this situation myself - indeed, since I don't own a car, I do not even *have* motor insurance - I can readily see the injustice. However, I am probably unable to sign the petition, since although I am a UK citizen, I am no longer a UK resident. I hope plenty of other people will sign it though.

This is a very interesting post, and I think it deserves some detailed commentary. I have experience with current-account T&Cs and reclaiming charges from my bank, and I have thought about the issue quite carefully over the years since then. What a consumer *expects* to happen in a current account with no overdraft, and what *actually* happens in practice, differ by quite a large degree. The present OFT investigation and test case are attempting to determine whether this discrepancy is illegal. The precise semantics of the discrepancies have changed since I made my claims in mid-to-late 2005. At first, the banks were claiming the charges under a "breach of contract" theory, namely a perfectly reasonable obligation in the T&Cs to ensure you had enough money for any transaction instructions beforehand. English contract law allows for "liquidated damages" to be agreed in advance, to allow such common breaches to be settled without involving the legal system. However, these liquidated-damages clauses have defining rules, which we were easily able to show that the banks were not following, and therefore they were illegal "penalty charges" rather than "liquidated damages". More recently, and indeed starting in late 2005, the banks have been trying to claim that the charges are "fees for a service". Let me quote from a post I made at the time, dated 9/Nov/2005: A service provided? I'm assuming these are "unpaid item" type charges, in which case they're actually charging you for *refusing* to provide a service. It seems that the OFT test case's judge agrees with me on that point, and has summarily thrown out the banks' argument in this vein. In summary, the banks are not allowed to charge *such high amounts* if they are under breach-of-contract theory - the limit is likely to be on the order of £1 a go, if that - *and* they are not allowed to claim that these charges are "fees for a service" any more, which is so obvious that I'd like to know what the banks were smoking when they came up with it. Now of course, the way a consumer *expects* a bank account to function is that if they don't have funds for a transaction instruction to be fulfilled, then the transaction simply doesn't happen, with no penalty charges (at least not beyond any normally applicable transaction fee). Strangely enough, this is precisely what happens when a debit card is used, but not when a direct-debit or a cheque is involved. As a computer engineer, this boggles my mind - the bank has *more* leisure and information available at the end of the day when they process DDs and cheques in batch-mode, than they do when processing debit-card transactions in realtime during the day! Now as to how banks can put charges directly on your account... this is, in practice, a special privilege they have. They do it this way because it is more efficient and, nominally at least, involves less paperwork. Legally, I don't think a bank account has any fundamental difference from a utility account - there is a balance which may be credit or debt, and there are mechanisms to pay debts and refund credits, and the organisation in question sends you a regular statement of account (which might be called an invoice in some cases). Practically, there is a huge difference, because people nowadays treat their bank account like a very large wallet, thanks to the technological advance of debit cards, which utility companies do not usually provide. If you play AD&D, think of it as a "Bag of Holding" which can only hold money. So when the charges take your account spiralling into the red, you suddenly have a "virtual wallet" which has turned into a bottomless pit - a "cursed Bag of Holding". (Hmm, I must remember about this particular metaphor. It seems quite apt.) I hope this clarifies matters.

If the cylinder gasket blows, that's almost always due to severe engine overheating. The gasket is made of soft metal (to provide a good seal between the block and the head), and is thus usually the first thing to melt. Overheating within 10 miles of a new engine is obviously faulty, and it sounds a lot as though the coolant disappeared quite quickly when the hose fell off. Most engines will go 50 miles without coolant *circulation* provided you don't thrash it - my dad did that with a diesel engine when the fan/pump belt snapped in the Borders - but the coolant itself *must* be there. It sounds to me as though the engine rebuilder or installer forgot to put the jubilee clip on, or forgot to tighten it and it fell off after the hose disconnected. You have a very obvious warranty claim there. Of course, if you have trouble getting them to honour the warranty, by all means ask us for more specific help!

I thought I would relay my experience from the early days of anti-bank-charge activism, where I successfully reclaimed several hundred pounds of charges, plus court costs, from Natwest. Some of you long-timers might remember me. Beware, this is a very long post. It details the entire history of my claim. In mid-2005, I was in financial trouble, but just keeping my head above water, so to speak. I was living off the proceeds of odd jobs for my parents, which were so exhausting that I couldn't keep it up for more than a few days at a time - so I typically worked extended weekends every fortnight. At the same time, I was taking driving lessons in an attempt to improve my employability. Luckily, I lived in north Lancashire at the time, which has a respectably low cost of living. One weekend, I returned home, put my usual cheque into the ATM on the side of the supermarket, and was stunned to see that the resulting balance was only half the value of the cheque. A couple of payments had fallen due just before the weekend, and I had assumed they would either be harmlessly rejected, or that they would use the small "buffer zone" that I had observed occasionally. Instead, I had encountered the first few of the many £35 charges I would see. Needless to say, this seriously alarmed me. I immediately went into the supermarket and bought enough food for the whole fortnight, knowing that I would have to be unusually frugal - and I had to do this with a guaranteed cheque, since my paycheque had not yet cleared. As soon as the cheque *had* cleared, I went to the railway station and bought the ticket back to my parents - 120 miles away in Northumberland - in advance. I advised the driving school that I would have to put my lessons on hold, but I could still give them a cheque for the next, uncancellable lesson. I also obtained as much credit as I could for my electricity meter. The food just barely stretched to the next working weekend, and that included the last scraps from the cupboards. On the way back north, I had the presence of mind to check my account from an ATM at one of the stations en route. If I had been alarmed before, now I was completely flabbergasted. The negative balance showing on my account - which had no overdraft facility - was greater than I expected my paycheque to be. This meant that if I followed my normal routine, I would have no food and very little electricity when I returned home, and no obvious way to return north to do more work. So I entered the cash economy. My parents were of course completely willing to pay in cash, due to the circumstances, though it was a little extra effort for them. It was immediately obvious that the charges were unfair and unsustainable, but I had to research on the Internet to discover the precise legal details - something that I am fortunately good at. Thus I discovered BankChargesHell, and through it, Bob Egerton. Back home, with time on my hands and food in the cupboard again, I pored over my statements and T&C leaflet, identified each charge and the stated reason for it, and verified that the bank considered me in breach of contract by comparing the wording of the rejection letters with the T&Cs clauses. Every single refused transaction was charged to a greater amount than the original transaction was worth. This meant that it failed both parts of the penalty-charge test which applies to breach-of-contract remedies. One of them was a Direct Debit for £1.30, which was refused and charged £35 for the privilege. In two other cases, cheques were "presented" twice each and charged £35 each time - £70 per cheque - and the recipient was not notified of the failure until a whole month later. Indeed, they both believed the cheques had cleared successfully when I first asked them. Whatever those charges were going towards, it certainly wasn't Special Delivery. Fortunately I was able to use cash and postal orders to satisfy these well-known companies when they realised the problem, and my pro-active attitude minimised the fuss they made. I even worked out, to a first order of approximation - I am an engineer after all - how much it actually cost the bank to deal with each rejection - which turned out to be about 70p, assuming that it was handled by automatic equipment and notified by first-class post to both me and the other party. At the time, the cost of a normal first-class stamp was 30p - I assumed that with bulk discounts, this would include the cost of the pre-franked envelope. So I sat down at one of my computers, wrote a polite nastygram to my bank manager, and stuck it in the post. In it, I pointed out my financial difficulties, with which under the Banking Code they are obliged to show lenience. I strongly hinted at their obligations under the Banking Code and English Law. I also mentioned that I was living on cash, and that I would not make further deposits until I was practically able to use the account again. The reply was prompt, but negative - and full of errors. It was dated for the day I had posted *my* letter, which was clearly impossible. They pointed to one of the earlier "buffer zone" transactions as an example of "lenience". They made vacuous placating statements which didn't help my actual situation in the slightest. They spent a large number of strong words to point out a minor factual error that I had inadvertently left in my letter. And then they stated, without references, that they were in compliance with the T&Cs and the Banking Code. They must have thought I was a simple-minded "consumer" with no willpower or high-level cognitive skills, who could be fobbed off like their usual diet of council-estate permanent residents. (No offence to forum members who happen to live on an estate.) On the contrary, as a qualified Systems Engineer I am very capable of following complex trains of logic. I read technical manuals about individual CPU models for *fun*. What I found in the T&Cs was a *lack* of consistent logic, and certainly nothing consistent with reality. I was quickly gaining quite a lot of ammunition to use in court if necessary, and relaying my findings back to Bob and BankChargesHell, who were also guiding my investigations. Since they helpfully included copies of the T&Cs and Code with the letter, I promptly went through the latter with a highlighting pen (as I had already done with the former) and noted several probable breaches of the Banking Code. One of them was that they had completely ignored my easily-verified claim of financial difficulty. So, one fortnight later (and one, more intense than usual, working weekend to save up for the court fee), I put together a Small Claims Court claim. I used the old-fashioned paper forms and attached a full schedule, since the online forms of the time did not have anywhere near enough space for a quality set of particulars. The claim included more £35 charges that had accrued in the meantime, penalty interest (at a huge 30% EAR) on the overdraft, and a monthly unarranged borrowing fee (£25). The account would, without these charges, have been in credit the whole time, from the moment my cheque cleared from the supermarket ATM. As an aside, I *was* able to discern a pattern to their "discretion". Ignoring the guaranteed cheque I had used at the supermarket - a very rare occasion for me - they had authorised every transaction that *began* with a positive balance, and refused (and charged) every transaction that began with a negative balance. Any programmer with an ounce of sense knows that you must check the *post-transaction* balance against the limit. I can only assume that this is a deliberate ploy to justify as many fees and charges as possible in the long run. Natwest had also, at some point, demanded that I destroy and return my card and chequebook. I refused on principle, seeing as the debt was disputed in the first place, the card was useless (except for guaranteeing cheques) due to the negative balance, and the chequebook was also useless because it was now empty. A couple of days after I filed, I received a Notice of Intention to File a Default. This arrived in the same post as my latest account statement and my copy of the court papers. They had, of course, charged me yet another £30 for the privilege of the Notice, and I also noticed that a further £28 unarranged-borrowing fee and several more pounds of penalty interest were due at the end of that month (now September 2005). I hoped that the receipt of the court papers would forestall the default filing, or at least the recovery action also notified in that letter. At about this point, I contacted the BBC's Working Lunch programme, on a BankChargesHell member's suggestion. They were very interested to hear my story, as with several other members, and invited me to give an interview on camera. The production schedule was rather rushed, so I didn't make as good an impression as I would have liked - it is certainly difficult to speak confidently on camera to an interviewer you can't see - but I think it was valuable nonetheless. A second take would almost certainly have improved the quality a lot, but I gather there simply wasn't time. At the latest sensible time, Natwest filed their acknowledgement of the court filing, giving them a month rather than a fortnight to submit their defence. This was not unexpected, as it fit perfectly with previous behaviour in similar cases. They did not, in the event, file a defence. This was also mostly consistent with previous behaviour. Instead, they sent me two letters - one from the branch, and one from "RBOS Group Litigation", stating that they would refund the charges - while, of course, not admitting any wrongdoing. These letters were *also* riddled with errors, particularly in the amounts to be refunded, and were even inconsistent with each other. You'd think they'd be more careful with a settlement offer. I had to make phone calls (to their foreign call centre, mostly) and write strongly-worded letters after they "corrected" the amounts *incorrectly*. The temporary shortfall in the refund meant that I didn't have enough money to pay for my new glasses, which I needed partly because of an updated prescription, but also because I had lost the old pair in the aftermath of a cycling accident. So I spent another week squinting at my computer. (The bike didn't get repaired until much later, but I borrowed an old one from my parents.) But eventually I got well over £500 back, which included all the charges, the penalty interest, the 8% pa claim interest and the court fees. And then they notified me that they would be closing my account just before Christmas. No reason was given, but the message was clear: "you are not a profitable customer, so we don't want you." Ironically - and this was in November by now - I had just received a job offer. A very *good* job offer. With the slight technicality of having to move to Helsinki, but still... It could have been a pretty substantial income for the bank, siphoning off all the investment interest on a decent salary while letting me see only a tiny fraction of it. But in the meantime, I still needed a bank account to receive my first proper paycheques, so that I would have the funds to relocate. So I went to another bank - Barclays in this case - to see what they would give me. Surprise surprise, they would only give me a Basic account, with no debit card or chequebook. When I got to Helsinki, I discovered to my great inconvenience that my cash-machine card for my new Barclays account would not work in foreign ATMs. You can imagine how popular *that* made me with my new employer. I opened a proper current account with a local bank as quickly as possible, and have been quite happy with them since. I haven't checked my British credit rating recently, so I don't know the extent of any nasties left there by this episode. I do know that what Barclays saw in it was pretty bad, but I did have other debts at the time, most of which are now long paid-off. In Helsinki, I don't have a credit history - but I could still get a full current account, just not a credit card, and that's fine by me. I would have dearly loved to stand up in court and thumb my nose (figuratively) at these clowns, while systematically taking them apart. I'm glad I got in before the blanket stay. So I observe with great interest, from my position at arm's length, the proceedings of the OFT's test case and their eventual ruling.