The OFT Case

[breeze1996]

9. Does reference to voluntary cooperation mean that the OFT may simply do a deal with the banks behind closed doors? [back to top]

No. We want to see fair treatment of consumers and are determined to secure successful resolution on these charges for the benefit of consumers. Our position is simply that, if we can resolve any concerns we have about the fairness of the charges without the need for further, lengthy, court action, then this would be in the best interest of consumers. For example, if the banks gave satisfactory undertakings about their conduct. This is no different to the approach we would take in any UTCCRs case. In any event, we are required by the Enterprise Act 2002, to consult with the banks to try to put a stop to any unlawful charges before starting any enforcement proceedings.

 

The Office of Fair Trading: Questions and answers for OFT personal current account work

 

Have I misunderstood this Bookworm? It's from the OFT's own web pages have included the link

[Bookworm]

Thanks for that.

 

I think that this paragraph was part of the original FAQs about the original enquiry into overdrafts charges, a few months before the test case was announced, and that the FAQs got updated higher up with queries about the test case, but that this particular paragraph stayed on... causing quite a bit of confusion for people who haven't been following this from day one and before, I have to say!

 

I am pretty sure of this because of this bit:

"Our position is simply that, if we can resolve any concerns we have about the fairness of the charges without the need for further, lengthy, court action, then this would be in the best interest of consumers."

 

Reading between the lines, I think the OFT tried to get the banks to lower their charges voluntarily following the credit card enquiry of April 06, the banks totally refused to back down and increased their charges further and tried to hide behind new-fangled T&Cs, saying: "ooh, these charges are fees for a legitimate service, therefore do not come under your remit, you can't touch us now", leaving the OFT with little choice but to seek resolution through the courts, and this lead to the test case.

 

That's how it reads to me anyway.

[Guest Macedonian]

I ask this as I know the OFT said they would accept any reasonable offer from the banks.

Where did they say that? Can you post a link? I have never seen this said anywhere, so would be very interested to see that. As they are the banks' regulator, I have to tell you I am very surprised that they would have said such a thing.

 

I suspect that this is the info on cutting a deal that Breeze is referring to, 11th September last year.

 

BBC NEWS | Business | OFT may compromise on bank case

[breeze1996]

Updated 11 March 2008

 

This is the date at the top of the page where the link is.

It's an answer under the current questions and answers from OFT.

That's why I thought it would still aply.

[Bookworm]

Yes, I can see why it would look confusing, as I said!

 

Macedonian, thanks for the article, it does make sense, but I think that it is too late for that now.

 

In the same way that when we went to court, the banks could settle in full all the way to the hearing, once the the case has been laid out in front of the judge, and the case is concluded, it is no longer really in either of the parties' hands. I think that the OFT probably hoped that the banks would back down with them the way they used to with us little people, but between then and now... well, there's been a whole test case and all of our hopes rely on one man.

 

If you guys pray, pray for his continued good physical and mental health, a heart attack or Alzheimers would not be any good!

[Guest Macedonian]

Yes, I can see why it would look confusing, as I said!

 

Macedonian, thanks for the article, it does make sense, but I think that it is too late for that now.

 

In the same way that when we went to court, the banks could settle in full all the way to the hearing, once the the case has been laid out in front of the judge, and the case is concluded, it is no longer really in either of the parties' hands. I think that the OFT probably hoped that the banks would back down with them the way they used to with us little people, but between then and now... well, there's been a whole test case and all of our hopes rely on one man.

 

It surely is now too late for this.

 

I think the important thing here is that it indicates the OFT's lack of resolve to push the issue through, if they could find a soft option. Further to this, it suggests strongly that they feel no necessity to enforce the full legal position that all penalty charges are unlawful, if exceeding the actual costs incurred. Rather like the mysterious £12 credit card charges (they have never justified or explained that figure BTW), they seem to be happy with a compromise that allows the banks to keep vast amounts of consumers' money regardless of the legal position.

 

Another point touched on above is the 6-year period. If the OFT wanted to ensure that all unlawful charges would be repaid if the High Court finds for them in the test case, then they should have insisted that the courts placed an injunction on the banks to prevent them destroying evidence as it reaches 6 years. This was not even discussed when our claims were put on indefinite hold, and I think it says clearly that they have no intention of fighting for the return of older charges. In the case of some credit cards - at least - it is clear from my experience that the banks destroy every statement they can as the 6 year point passes.

 

Whilst the OFT has been forced to take action, belatedly, on penalty charges, it is regrettable that their actions seem unlikely to see the return of the full amounts that claimants are entitled to in law. It will be very interesting to see what follows the judgement, as they are aware that any half-baked solution - like the £12 - will probably not settle the matter, any more than it did with the credit card ruling. Although the banks have tried to make out that this is some approved charge, in my experience I have fought every one successfully, as they know they have no defence to the legal position.

[JonCris]

IMHO this case is a complete sham & a conspiracy between the OFT & the banks, who were bleeding money

 

It was undertaken to allow the banks more time to introduce their new charging regime so their inflated profits won't suffer & even if it wasn't that's the effect it's having

 

Also don't forget the FSA ruling on charges was completely one sided allowing the banks to continue charging whilst denying consumers the right of recovery

[mailmannz]

Oh gees [insert rolling eyes]

 

IF this was as sham between the OFT and banks there wouldnt have been a court case [insert more rolling eyes]

 

Next you will be telling me the US Govt was involved in the 9/11 attacks [insert more rolling eyes]

 

Mailman

[JonCris]

Oh gees [insert rolling eyes]

 

IF this was as sham between the OFT and banks there wouldnt have been a court case [insert more rolling eyes]

 

Next you will be telling me the US Govt was involved in the 9/11 attacks [insert more rolling eyes]

 

Mailman

 

I'm not sure if the above is a sarcy response to my suggestion that it's all a sham - I would simply state that there being a court case was/is the best & most obvious way of stopping consumers claiming their money back.

 

After all prior to this action the banks have had umpteen opportunities to put the matter before a court but have usually backed out at the last moment

 

As for the OFT they have ages to do the same but have not until requested to by the banks. This case was NOT instigated on the initiative of the OFT but that of the banks & this action so far has only benefited the banks & no other party

[Mr Rhodes]

It's a heated debate and maybe I have become very cynical but it would appear that this case has certainly assisted the banks for quite some time and hindered the average bank customer. This looks like it will continue in this limbo also.

 

Maybe the OFT is not quite as aggressive or committed as the banks?

 

I am no expert but Bookworm seems to have a very good grasp of the legalities, whereas I can not help seeing the benefit for the banks and the hinderance for the consumer in this.

 

Time will tell of course but I feel for the people out there who really do need their money back, and the sooner the better. In some ways we are actually worse off because the court fee is a big outlay and that is in limbo as well as the unlawful bank charges.

 

Fingers crossed for all of us that this is not a sham and the reult is in our favour.

[JonCris]

It's a heated debate and maybe I have become very cynical but it would appear that this case has certainly assisted the banks for quite some time and hindered the average bank customer. This looks like it will continue in this limbo also.

 

Maybe the OFT is not quite as aggressive or committed as the banks?

 

I am no expert but Bookworm seems to have a very good grasp of the legalities, whereas I can not help seeing the benefit for the banks and the hinderance for the consumer in this.

 

Time will tell of course but I feel for the people out there who really do need their money back, and the sooner the better. In some ways we are actually worse off because the court fee is a big outlay and that is in limbo as well as the unlawful bank charges.

 

Fingers crossed for all of us that this is not a sham and the reult is in our favour.

 

 

IMHO the one GOOD affect of this action which, was not envisaged by the banks, is that now many more victims are so peed off because of the one-sided stay & have consequentially become much more bloody minded that they are more willing to use every means possible fair or foul to avoid paying whether the 'debt' is owed or not & to some smaller degree this must be still having an effect on their collections causing them to be much more drawn out battles thereby increasing costs - one can only hope so

[breeze1996]

I've just had an email from Martin at MSE it's his blog and he says it's been confirmed nobody will know the result till JULY.

 

So another 4 months to wait for everyone.

[JonCris]

breeze ask Martin about his next programme & the credit card companies ploy of using the current stay to avoid repaying their charges

[renegotiation]

breeze ask Martin about his next programme & the credit card companies ploy of using the current stay to avoid repaying their charges

 

Is that actually working in the courts or are they just saying that to deter court action in the first place?

[breeze1996]

It Pays To Watch: Wednesdays @ 7:30 on five

 

just found this link to his website on the tv programs hope it helps.

 

i joined his blog and he emails stuff that has been found he won't answer emails as it is so busy.

[JonCris]

Is that actually working in the courts or are they just saying that to deter court action in the first place?

 

Yes - unfortunately many courts have effectively colluded with the lenders by also staying card claims as well as bank charge claims when they shouldn't have as the card companies are not part of the action & their fate had already been decided by the OFT:mad:

[mailmannz]

I'm not sure if the above is a sarcy response to my suggestion that it's all a sham - I would simply state that there being a court case was/is the best & most obvious way of stopping consumers claiming their money back.

 

No it isnt because all those days in court, not to mention all the work required to get there actually costs the banks a bomb!

 

If this was a sham, and if the banks were REALLY in collusion with the OFT, the FSA would have announced years ago that the bank charges were legal, fair and just.

 

What will lose this for the OFT would be the mickey mouse outfit they had representing their side of the case.

 

Mailman

[JonCris]

No it isnt because all those days in court, not to mention all the work required to get there actually costs the banks a bomb!

Really & how much do you reckon they are NOW saving by NOT having to settle claims - or what do you consider it would cost them paying the legal costs - as apposed to having to pay compensation to customers past & present - my guess - settling claims which I'm sure would be many millions if not billions more

If this was a sham, and if the banks were REALLY in collusion with the OFT, the FSA would have announced years ago that the bank charges were legal, fair and just. Only a court can decide what's fair & legal which is the reason the banks didn't want to answer to the court in thousands of actions brought by consumers where the banks have withdrawn at the last minute

 

What will lose this for the OFT would be the mickey mouse outfit they had representing their side of the case.

 

Mailman

 

See above in red

[rdm2006]

really there should be a two pronged attack because not only are the charges not fair in the way that they are excessive but they are also one sided most contracts protect both sides from one failing in some way.

 

How many banks T & C's say that if the bank make a mistake then the customer is entitled to charge them for their losses - none

 

they basically say that if you make a mistake we want that corrected and we will charge you for that mistake, but if we make a mistake you will just get your money back and you are then at our mercy to decide if we feel like paying you compensation or not - how fair is that?

[texel]

I agree with rdm 2006. I had a situation with BOS where they made a mistake and eventually paid me £10 compensation. I wrote back enquiring why when i made a mkistake it cost me £ 30 and they only paid me £10 for their mistake:mad:

[dannyboy660]

It was undertaken to allow the banks more time to introduce their new charging regime so their inflated profits won't suffer & even if it wasn't that's the effect it's having.

 

I agree.

 

This whole thing is a blessing in disguise for the Govt, and to a certain extent the banks themselves.

 

They can introduce standard charges for Bank accounts for everybody, thereby doing away with the outdated "subsidy" system, and fit in nicely with the EU cross border Banking directives. Everybody getting nicely in step, and it's been made to look like it was the consumers choice. What a beautiful stroke of social engineering.

 

The next step will be to abolish the whole outdated idea of "spending a penny" - and everyone will be "Euronating" instead. ;-)

[dannyboy660]

I can never find the right things when I need them but here's a start

 

"When there is doubt as to the meaning of a written term (including standard terms) in your contract with a professional, the interpretation most favourable to the consumer will prevail. This rule derives from the general rule whereby in contracts where all or certain terms are in writing, these terms must always be drafted in plain, intelligible language."

 

 

European Commission - Your Europe - Citizens - Unfair terms in contracts

 

Mmmm. Looks good!!

[Kid Shelleen]

Interesting thought.

 

It's not too difficult to imagine the Bank Manager, the District Judge and a few Lawyers getting together at the Lodge on a friday night and finding ways to make the best out of it.

 

It doesn't take a giant leap of the imagination to wonder if the whole thing is being engineered in some way.

[JonCris]

Interesting but I wonder if for the 1st time we 'find' we can opt out of some European legislation

[dannyboy660]

Interesting but I wonder if for the 1st time we 'find' we can opt out of some European legislation

 

Quite possibly, but I suspect the banks might be prepared to go with it.

 

Have you noticed how Banks like ING, KBC and the like, seem to be doing quite well in the UK, but you won't find very many branches of 'our' high street banks on the continent?? I think you'll find the UK is virtually a killing field for banks with inflated charges and the very clever illusion of 'free' banking. This doesn't happen elsewhere in Europe, at least not on such a large scale so it's not very attractive to UK banks - but the European banks are now poaching customers on UK soil and doing quite well operating under UK rules. I was reading amongst that EU stuff that UK banks will soon be offering Polish versions of their websites, a real sign of the times.

 

No. I believe this is all part of the process of levelling out the playing field and laying the foundations for the way UK banking will eventually have to merge with their EU colleagues. Another step along the road to a truly Global, or for the time being, European economy.

 

I mean one of the big 'threats' at the moment is "Do you really want to see the end of Free Banking??"........but we all know as long as your credit interest rate is lower than the true rate of inflation your banking has never been 'free', the banks always win. They'll come out of this smelling of roses and will be able to launch their own financial 'invasion' of mainland Europe.