Oft Test Case Results: Stand By

[adamc6671]

With the charges not penalties, we now have to rely solely on the UTCCR and come under the umbrella of the OFT deciding on whether the charges are fair or not. Ok, so indications are good that the OFT WILL find the charges unfair, but this means that consumers still will have to go and ask the bank for their charges back and that the banks will then manage to convince a good few people that they only have to repay part of the charges, altogether the banks will save a huge amount of money that way.

 

Just out of interest, Bookie, I've already re-calculated the 'Schedules of Claim' for each of my 2 claims on the following basis -

 

I've made the assumption that the OFT will rule in the same way as they did for Credit Card a/c's, basically saying the will investigate anything over £12 levied as a 'default' charge. I've then added together all the ammounts over £12 they have historically charged to both the a/c's I'm helping with, until the point is reached where the balance of the a/c would have been zero had it not been for the ammounts over £12 charged.

 

I've then re-done the schedules to claim everything over £12 charged, initially, and then from the time when the balance would have been zero, and therefore no charges would have been applied, I've claimed ALL charges levied, and interest charged.

 

OK, that does reduce the claim somewhat, but not massively. I'm hoping now that, ultimately, both the Banks and the Courts will see the fairness of that argument, and the claims will succeed. The 'Stat' 8% interest added in the meantime will go some way toward re-dressing the balance!

 

If the OFT rule that charges of £30 plus are NOT unfair then the argument is lost, of course, but I hope that is very unlikely.

 

Adam.

[texel]

In this day and age I think some people like the judges and OFT don't really know the meaning of penalties. According to The New Webster Library of Universal Knowledge ( De luxe Library Edition ) Under penalty, apart for the punishment for crimes etc. is the meaningTHE SUM FORFEITED FOR BREAKING AN AGREEMENT.Now to me this means the agreement of not going over an overdraft or having cheques etc returned. So any funds forfeited are penalties. In a case, I have going. I informed the judge this, when the lawyer defending the BOS tried to say that the charges were not penalties.

[Bookworm]

In all honesty, Adam, I think you are making a mistake in doing it that way, simply because claims based on the UTCCR mean that the UTCCR apply across the whole of the claim, and that means that a term that is deemed unfair is non enforceable in its entirety. In other words, if a £30 charge is unfair, and then reduced to a "fair" term, it is the whole £30 that is reclaimable and not the difference. I think by redoing your calculations in the way yu haqve done, you are playing right into the hands of the banks as that's exactly what they'll hope people will believe is the right way to go about it.

 

Furthermore, if the OFT decide on an intervention threshold, I personally believe that that level will be significantly higher than the £12 for c/c. Banks have considerable higher overheads than CC companies (branches, more staff, ATMs to name but a few) and if CC charges used to be £20-ish and now £12, it is fairly logical to expect that the bank charges threshold would be established round the £18-£20 mark comapred to the current £30-£35 average bank charge.

JMO, of course, at this point, anything like this is just conjecture.

 

Either way, I'd still go for the whole amount of charges reclaiming. ;-)

[angel_1]

hiya Bookworm

 

so still put in the claim in full charges been charged ? ie 35 or whatever it was plus the interest as applicable

 

thanks ciao maz

[Bookworm]

Yep.

[adamc6671]

In all honesty, Adam, I think you are making a mistake in doing it that way, simply because claims based on the UTCCR mean that the UTCCR apply across the whole of the claim, and that means that a term that is deemed unfair is non enforceable in its entirety. In other words, if a £30 charge is unfair, and then reduced to a "fair" term, it is the whole £30 that is reclaimable and not the difference. I think by redoing your calculations in the way yu haqve done, you are playing right into the hands of the banks as that's exactly what they'll hope people will believe is the right way to go about it.

 

Furthermore, if the OFT decide on an intervention threshold, I personally believe that that level will be significantly higher than the £12 for c/c. Banks have considerable higher overheads than CC companies (branches, more staff, ATMs to name but a few) and if CC charges used to be £20-ish and now £12, it is fairly logical to expect that the bank charges threshold would be established round the £18-£20 mark comapred to the current £30-£35 average bank charge.

JMO, of course, at this point, anything like this is just conjecture.

 

Either way, I'd still go for the whole amount of charges reclaiming. ;-)

 

Thanks for that Bookie - I can see where you are coming from, and as always you make a great deal of sense in what you say.

 

However, to take your second point first, the banks do indeed have far greater overheads than the CC companies, BUT they also have the 'free' use of billions of pounds held on a rolling basis in current a/c's that pay little or no interest, that they in turn lend out at high rates of interest, out of which they make huge profit to more than cover those overheads. They also, of course, have the huge sums held in interest paying a/c's that they then lend out at much higher rates. The CC Companies don't have that facility, at least not to that extent, so I'm afraid I don't agree with the view that a 'fair' default charge has to be higher for the banks than for the CC Companies. Sorry!

 

To take your first point, yes - I can see what you are saying - if a charge is unfair, then the whole is reclaimable. However, the business brain in me says that if a customer defaults on an account, the bank should be entitled to something in recompense for that. OK, £12 or whatever is in all honestly way over what it actually costs them, but it does act as a deterrent to less scrupulous customers who would otherwise run away with countless defaults, that could easily put the whole system at risk by encouraging even greater debt than that which has caused the current financial 'crisis'. On that basis, in order to be seen to be fair and reasonable, and to try and expedite the 2 claims I'm helping with, the 2 people are quite happy to go ahead in the way I've stated earlier. I'm not suggesting that everyone should do this, or that it is the best way, but I live in hopes that it may lead to a way forward sooner than may otherwise be the case.

 

Omce again, many thanks for your interest, Bookie.

 

Adam.

[Bookworm]

However, to take your second point first, the banks do indeed have far greater overheads than the CC companies, BUT they also have the 'free' use of billions of pounds held on a rolling basis in current a/c's that pay little or no interest, that they in turn lend out at high rates of interest, out of which they make huge profit to more than cover those overheads. They also, of course, have the huge sums held in interest paying a/c's that they then lend out at much higher rates. The CC Companies don't have that facility, at least not to that extent, so I'm afraid I don't agree with the view that a 'fair' default charge has to be higher for the banks than for the CC Companies. Sorry!

Don't apologise, that's what discussion is all about. ;-)

I quite agree with you, but I am trying to see this from the OFT's point of view. It's not just about overheads etc, but simply because the existing bank charges are considerably higher than the c/c charges when they were. I simply can not see the OFT setting a threshold at the same level as the c/c ones when the bank charges are nearly double what the c/c ones were. But we could argue this until the cows came home, as neither if us knows what the OFT will decide. Personally, I think that if they set a £5 threshold, most people would accept it as a "fair cop, guv" and the campaign would stop in its track even though the reality is that the bank would still be making a 100s or 1000s % profit from those. :-| But that's another story.

 

To take your first point, yes - I can see what you are saying - if a charge is unfair, then the whole is reclaimable. However, the business brain in me says that if a customer defaults on an account, the bank should be entitled to something in recompense for that.

No argument there.

OK, £12 or whatever is in all honestly way over what it actually costs them, but it does act as a deterrent to less scrupulous customers who would otherwise run away with countless defaults, that could easily put the whole system at risk by encouraging even greater debt than that which has caused the current financial 'crisis'.

If you think in terms of deterrent, then you are thinking in terms of penalties (which are unlawful) and the judge has said they are not penalties. So I'm afraid that argument simply doesn't work. I also don't believe that the deterrent aspect would work anyway, people who are going to be serial defaulters won't care one way or another if their intention is to [problem] the system, and the majority of people don't want to be in serious debt. I also happen to believe that the system of charges as it stands and even with a "mere" £12 on them actually encourages and increases the burden on people in difficulties and can even cause the level of indebtness and subsequent defaults.

 

On that basis, in order to be seen to be fair and reasonable, and to try and expedite the 2 claims I'm helping with, the 2 people are quite happy to go ahead in the way I've stated earlier. I'm not suggesting that everyone should do this, or that it is the best way, but I live in hopes that it may lead to a way forward sooner than may otherwise be the case.

Sorry, I thought these were your own claims. Do let us know what pans out, it will be interesting to know... although I strongly suspect that they will get stayed all the same pending a final resolution from the OFT test case.

[adamc6671]

Thanks again, Bookie.

 

Personally, I don't believe that just because the banks set their charges higher than the CC Companies, that makes them justified in what they have done! I do totally agree with you that the vast majority would accept the 'fair cop, Gov' approach of a charge being set at between £5 and £12 as being the end of the argument, and a way of getting at least something back.

 

On the 'deterrent' aspect, yes, I have to agree with you upon thinking about it - it wouldn't work!

 

As far as the actual claims go, they were stayed a year ago. We're now thinking that we've got a little to loose, but a lot to gain, by offering a revised figure to both banks, and to the Court, for an early settlement on the basis stated earlier. May well not succeed, but no harm in trying! I'll certainly keep you posted on progress, both here and on the respective threads - 'Tish vs Abbey' and 'JimmyBoy vs Lloyds TSB'.

 

All the best

 

Adam.

[Gogivit]

Im sorry that I have not read all these threads but lets not forget the following:

 

Banks operate with computers that can simply stop payments and cash withdrawls that hence stop a person going overdrawn in the first place (however I recognise that gaurenteed cheques can not-but with such minimal use of cheques these days, should be a minimal problem)!

 

Lets not also forget that banks have paid out hundreds of millions of pounds to claiments (quite simply why?) If you said I owed you money I would tell you to bu___r off. The fact they have paid out so much up to now means there is something wrong!

 

The banks want everyone to go overdrawn that I have learnt from experience / challenged!

 

It has been said many times that only pence covers the banks costs! This I know from someone who programmes their computers!!!!!