Business Account Charges - Not Unfair?!!

[reclaimone]

Hello,

 

I have just received a letter from FOS saying that my claim for bank charges has been dismissed!!

 

I have just rang them and they have said that business bank charges are not deemed as unfair and are not penalties!

 

Please can anyone help. I can appeal but do not know what to put in my letter. Desperate for help.

 

My overdraft fees ranged from £30 to £75.

 

Bank is Lloyds TSB.

[Rhia]

What exactly did you ask them? And what exactly did they reply? I think we are not looking at penalties as such any more but as being unfair as in the UTCCR. So they may not be penalties but can still be unfair.

 

Are you able to post your letter to them and the reply...leaving out your identity details of course.

[MARTIN3030]

Reclaimone I am suprised that you have been here since 2007 with 192 posts and yet still dont know this.

The FOS will not consider business claims,and of course will say this.

In fact they will say that no bank claims have merit under penalty clauses since the OFT test case.

Any appeal therefore will be a waste of space.

 

Under the Baking codes your bank still has to look at your circumstances if you are in financial difficulty regardless as to whether you are a business claimant or not.

But it does not give any automatic right to demand charges back.

Can you say what are the periods (dates) of the charges and when did you open the account ?

Have you got all your statements ?

Is the account still open ?

If there is outstanding arrears on there how much and what are the arrears for ?

If the account is closed or has been passed to collection or sold can you give any details ?

 

Once you answer this lot then it can be more easier to give you some answers.

[reclaimone]

Sorry im confused here does not take much!

I thought the FSA waiver meant FOS still had to look at business claims. Oh well.

 

The account is still open but im afraid charges ranged from 11/2003 to 08/2005. No arrears, all statements can be downloaded.

 

Im not presently in financial difficulty so will have to wait for test case to complete.

[MARTIN3030]

Ok thanks for clarifying.

The OFT case is not expected to provide anything that will be of benefit to Business claimants.

Can you say roughly what the total of your charges are ?

I presume that you exhausted the banks 8 weeks complaints handling procedures which in effect means they are aware of your issues....and should not need lengthly pre action protocols to kick start any claim.

Are you a sole trader and can you confirm that you are not trading as Limited Company ?

[reclaimone]

£790 inc interest.

Exhausted everything. i then completed complaint form to FOS using guide off Martyn Lewis website.

I am soletrader.

[MARTIN3030]

Ok will have a think and come back to you.

[skippy176]

Martin,

 

Just a quick question.

You say that the FOS will not consider any claims for charges from businesses.

 

But is there a way they can hear cases from some businesses (sole traders and small partnerships) by virtue of the "unfair relationship" clauses of the Consumer Credit Act 2006 ??

 

As far as I have read, I've seen nothing that stops them hearing such cases as they don't rely on UTCCR or penalties. Any ideas ??

[MARTIN3030]

It depends on what you want to rely on.

Sole Traders and partnerships are of course covered under the CCA in the same way as individuals where elements of an account fall within the remit of the CCA - for example loans.

Here is a little info from the OFT website;

 

 

Unfair relationships

 

The Consumer Credit Act 1974 enables borrowers to challenge unfair credit agreements in court and obtain redress, if the overall relationship is unfair to the borrower.

This is in addition to an enhanced ability for consumers to take disputes to the Financial Ombudsman Service (FOS). See alternative dispute resolution scheme.

The provisions were introduced by the Consumer Credit Act 2006. They applied to new agreements from 6 April 2007, and to pre-existing agreements from 6 April 2008. Agreements completed before the new provisions took effect remain subject to the previous extortionate credit bargains provisions.

The 2006 Act also enhanced the right to apply for a time order, which is a court procedure that can give borrowers more time to repay a debt.

The unfair relationships provisions

Section 140A of the 1974 Act (as amended) provides that a court may determine that the relationship between a lender and a borrower arising out of a credit agreement (or the agreement taken with any related agreement) is unfair to the borrower because of:

 

• any of the terms of the credit agreement or a related agreement
  
• the way in which the lender has exercised or enforced its rights under the credit agreement or a related agreement, or
  
• any other thing done (or not done) by or on behalf of the lender either before or after the making of the credit agreement or a related agreement.
  

The courts have a wide range of powers where a credit relationship is found to be unfair, including:

 

• altering the terms of the credit agreement or a related agreement
  
• reducing the amount payable by the borrower
  
• requiring the lender to refund money to the borrower
  
• removing any duty placed on the borrower under the agreement , and
  
• imposing requirements on the lender or an associate.
  

In addition, where unfair relationships harm the collective interests of consumers, the OFT and other enforcers (including local authority trading standards services) can take enforcement action under Part 8 of the Enterprise Act 2002.

The OFT has published guidance on Part 8 action and unfair relationships. See Unfair relationships - Enforcement action under Part 8 of the Enterprise Act 2002 (pdf 179 kb).

If there are queries regarding interpretation of the above provisions, these may be addressed to credit.guidance@oft.gsi.gov.uk.

The OFT cannot take up complaints on behalf of individual consumers. If a consumer has a complaint against a lender, and considers that the overall relationship is unfair, they should speak to a Citizens Advice Bureau or other debt adviser, or contact Consumer Direct on 08454 04 05 06.

Alternatively, if the consumer has pursued the complaint with the lender but is dissatisfied with the outcome, they can approach the Financial Ombudsman Service on 0845 080 1800.

The OFT would welcome details of court cases involving unfair relationships, and copies of relevant judgments. These may be sent to credit.guidance@oft.gsi.gov.uk or by post to Martin Goulden, Head of Credit Policy, Office of Fair Trading, Fleetbank House, 2-6 Salisbury Square, London EC4Y 8JX.

[skippy176]

Hmmm. So if an overdraft is a credit agreement under the CCA and the new "unfair relationship" clauses cover any terms of the credit agreement, is there some glimmer of hope for sole traders to go to the FOS (or court) about the unfairness of bank charges ?? Wholly avoiding the pitfalls of penalties and UTCCR ??

Just musing. Any thoughts, Martin ??

[reclaimone]

Any update on this one Skippy/Martin?