The OFT Case

[HSBCrusher]

some good news though!

 

NatWest historical terms are penalties - Official!!!

 

 

The Consumer Forums - Welcome to the The Consumer Forums

[Fred_Funk]

HSBCrusher

 

Hi! The link you've pointed us in the direction of says NatWest's historical terms and conditions have been 'ruled to be unenforceable penalties'.

 

Unfortunately, while no expert, I'm not at all sure it's as simple as that.

 

Firstly, I think what the judge has actually ruled is that NatWest's 2003 T&C's are 'capable of being penalties at common law'. He has still to decide whether they are, in fact, penalties at common law.

 

At least, that's my reading of the FSA press release published to coincide with this ruling...

 

(3) The test case began in July 2007. There are two stages. The first explores the preliminary issues of banks’ terms and conditions and whether they are subject to Unfair Terms in Consumer Contract Regulations 1999 and whether they are capable of being penalties at common law. Stage two will deal with whether the terms are actually unfair and are actually penalties at common law.

 

Secondly, the only T&Cs the judge has deemed capable of being penalties are NatWest's 2001 ones. However, he ruled this was not the case with their 2003 ones. This leads me to conclude that even if the judge does, ultimately, rule that these are penalties at common law this will only apply to charges made after the publication of the 2001 T&Cs and before the publication of the 2003 ones.

 

I'm guessing the judge hasn't looked at any older T&Cs because of the Statute of Limitations and the six-year cut-off point. However, a clear case can be made for claiming back further than this, ie before the 2001 T&Cs the judge has ruled on, so god only knows - I certainly don't - whether those charges are capable of being 'penalties at common law'.

 

If anyone is able to clarify any of these points, it goes without saying, I'd be incredibly grateful.

 

Thanks in anticipation

Fred_Funk

[Chromatix]

Which of the following "indicative and non-exhaustive list of terms which may be regarded as unfair" do you think apply to bank charges?

 

Well, this is *my* interpretation:

 

(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;

 

This is the crux of the argument, as it essentially codifies the elements of common law (specifically the test on "liquidated damages") which we were relying on to begin with. The consumer's "obligation" in this case is to keep sufficient funds in his account to satisfy any and all transactions he instructs; failing to do so in various forms causes the charges to be applied.

 

Rough calculations I did around 2005 note that the cost of rejecting a Direct Debit is no higher than 35p, and bouncing a cheque 70p, the bulk of this being the cost of first-class postage. At that time NatWest was charging a hundred times that for Unpaid Item Fees. For every one of my DDs or cheques that they bounced, they levied more charges than the original transaction had been worth.

 

(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract.

 

This is thrown up by the latest decision, as of 21st January. The banks typically refer to their "terms and conditions leaflets" when questions of contract terms come up, yet Mr. Justice Smith is of the firm opinion that at least some of these do not read as sets of contract terms. Thus it seems unclear what the contract terms actually are.

 

The common refrain among consumers affected by charges is that they had no idea that the banks could levy such high charges.

 

(k) enabling the seller or supplier to alter unilaterally without a valid reason any characteristics of the product or service to be provided;

 

The banks decide for themselves whether to refuse a transaction (causing an Unpaid Item Fee) or to initiate an unplanned overdraft (giving rise to Paid Referral, Unauthorised Overdraft, Overdraft Maintenance and Debit Interest charges). Needless to say, they normally choose the latter option in the first instance.

 

It would be fairly easy to argue that the unilateral initiation of an overdraft facility, on an account where no overdraft facility had previously existed ,would count as invoking this clause. This is doubly true where an "arranged overdraft" had previously been refused - and I can document this as having occurred at least once.

 

(o) obliging the consumer to fulfil all his obligations where the seller or supplier does not perform his;

 

Banks have repeatedly refused to take consumers' financial predicament into account when asked. They have also, whether by incompetence or malice (or some combination of the two), misled consumers as to their rights.

 

At the same time, they widely and clearly advertise their "compliance" with the Banking Code, which prohibits those two actions, among others. If I'm not much mistaken, references to the Bank Code even appear in these "terms and conditions leaflets" that they are so fond of shoving under our noses. Certainly Natwest sent me a copy of the Banking Code in response to one of my nastygrams, upon which I went through it and highlighted all the provisions of it that they'd breached so far.

 

I have personally seen Natwest apparently become unable to perform simple arithmetic, resulting in some extremely odd series of "corrections". You would naïvely assume that these were core competencies for a bank.

 

But let the consumer sneeze in the wrong way, and watch the banks come down on them like a ton of bricks.

 

(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract.

 

This is a good one. The banks love to point the consumer at the Ombudsman in order to distract them from the legal system.

 

Some of them also make it difficult to obtain back statements, despite their obligation to make them available under the Data Protection Act (another core competency).

 

Finally, they appear to have successfully obfuscated the identity of the contract terms which apply to the account, making it very difficult to formulate robust legal arguments.

 

Please also explain how business customers will be helped since the UTCCR do not apply to them? Are they to be left out? (Please remember that you are not allowed to use the word "penalty" in your answer.)

 

The UTCCRs don't apply to contracts between businesses, although it could be argued that they could apply to a "sole trader" in the client position.

 

IANAL, of course - though I have stared down a bank in the past.

[tender]

Going back a few postings on this thread,

 

I have had to have a case reinstated, which it was, and stayed of teh courts own motion, at the same time.

 

The time bar on teh stay is "until decisions in principle have been made elsewhere."

 

Now, it seems the intention would be, 'the principles' being discussed at that time in the OFT Test case, however the language doesn't seem to define this.

 

What would your advice be?

[johnnymitch]

Hi tender ,

 

I would say that the County Court , which is staying the claim ,is referring to the High Court , which is dealing with the OFT Test Case - IMHO that's what they mean by 'decisions in principle being made elsewhere ' .

 

Maybe they should have said 'decisions in principle being STAYED elsewhere .. that seems to be the case at the moment

[phatram]

do we have an update on what is happening???

bump