Sheriff puts Bank of Scotland to proof on bank charges

[rdm2006]

However, until fairly recently this same bank was telling its customers that bounced item and overdraft fees were there to cover it's costs, not as part of an overall package. These are from 2005:

 

"To cover our costs, we make a charge of £30 (maximum 1 charge per day) for any item we pay when your account is overdrawn in excess of any agreed limit. "

 

"To cover our costs, we make a charge of £35 (maximum three charges per day) for any item we can't pay."

 

 

Well thats no price hike is it from max £30 to max £105

 

No doubt they said the increase is just £5 from £30 to £35

[means2anend]

CCA 74/06 regulates ALL commercial consumer lending in the UK.

 

The clue is in the name - "Consumer Credit Act"

 

The bank is clutching at straws. They be up Poo creek sans paddle, a boat (or even a pair of wellies)

 

 

I should concur....

 

 

Meaning of credit Section 9.

 

Meaning of credit. — (1) In this Act “credit ” includes a cash loan, and any other form of financial accommodation.

 

section 16 Exempt Agreement-

 

Overdrafts are not mentioned anywhere in this section as exempted nor anywhere from S16-16C

 

It appears that the Regulatory framework does bring OD's within it's ambit.

 

m2ae:)

[Bookworm]

However, until fairly recently this same bank was telling its customers that bounced item and overdraft fees were there to cover it's costs, not as part of an overall package. These are from 2005:

 

"To cover our costs, we make a charge of £30 (maximum 1 charge per day) for any item we pay when your account is overdrawn in excess of any agreed limit. "

 

"To cover our costs, we make a charge of £35 (maximum three charges per day) for any item we can't pay."

That was then, pre-test case. Now, post test-case, it's all about core, core, core! Yesm they make profits, gazillions of them, couldn't survive without them, and the judge said that was ok!

 

No offence, but however bitter it may be, that ship has sailed. Smith J made sure they weren't penalties, and the Supreme Court said they were a core term and part of a package, and that's that. No point in rehashing what we all know is the truth, the law says otherwise.

[Bookworm]

I should concur....

 

 

Meaning of credit Section 9.

 

Meaning of credit. — (1) In this Act “credit ” includes a cash loan, and any other form of financial accommodation.

 

section 16 Exempt Agreement-

 

Overdrafts are not mentioned anywhere in this section as exempted nor anywhere from S16-16C

 

It appears that the Regulatory framework does bring OD's within it's ambit.

 

m2ae:)

Anyone wants to sing along to Chicago? "Give 'em the razzle-dazzle, razzle dazzle them..."

 

Correct me if I am wrong, but what I read, stripped of the legalese is this:

 

It's not a credit agreement, because the account was meant to be in credit, so when we bounced things, it's because we refused to give credit, ergo it can't be a credit agreement. (and the charge, well, the judge said we can charge what we like just to decided whether to bounce or not)

If the stuff gets paid and not bounced, it then kind of is a credit agreement, but the charges are not for lending, but part of a package... and at that point, they lose me completely, I admit.

On top of that, it can't be under the CCA74 if it's CCA 2006, and again, they lose me, because unless Iam mistaken, although the CCA 06 is obviously more recent than the CCA74, it doesn't make the 74 obsolete, only changes some of its terms and sections, yes?

 

I have to say that even before the defence above was posted, I had kind of thought that there was a chink in the armour there, in that there is a certain logic in the fact that if somthing gets bounced, then indeed the credit is not created. HOWEVER, by the same token, once the banks take their charges, thereby creating an overdraft for their own purpose so they can pay themselves, whatever the reason, the credit is in fact advanced, even if the customer is not the one actually benefiting from it.

 

The only exception I could see is if you have, say, £100 in your account. A DD gets presented, value of £110. The bank bounces it, then takes £30 off your account for the privilege, but you are still in credit by £70. Strictly speaking, the bank hasn't given you credit at all, and therefore maybe the CCA regulation wouldn't apply.

 

HOWEVER (2), what of a credit card? If you APPLY for one and get given one and a credit limit, even if you then choose NOT to use it and shove it in the drawer instead, your agreement with the company still comes under the CCA, does it not? Therefore, one could argue that where there is a bank account, with the possibility that credit may be available at some point, then it still is regulated under the CCA. The only exceptions would be savings accounts, and basic accounts where you simply can't go over the limit, if you try, things don't go through and you don't get charged. Oh, hang on, there isn't such an account in the UK, is there?

 

In conclusion, it seems to me that the bank is relying on:

1 - intimidation, by first and foremost trying to get it kicked out of "protected" SC.

2 - In case that fails, then try to scare off the claimant with complicated arguments.

3 - If that fails... errrr.... well, in the past, they used to settle at this point, but would they dare again? Or will they throw their hat in the ring and actually try and bamboozle a judge with their 3-ring circus?

[Falkirk1298]

Nothing to do with penalties. If you look at clause (m) of Schedule 2 of the UTCCR, it says:

 

"(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;"

 

The bank says, in 2005, that its charges are to cover its costs. I may say, however much I dislike it, fair enough. They have overheads and, if this is what it takes to ensure they are covered, so be it.

 

However, in the test case, it has suited the banks to reinterpret that particular element of the contract between us, and thus fall foul of Section 5.

[means2anend]

Anyone wants to sing along to Chicago? "Give 'em the razzle-dazzle, razzle dazzle them..."

 

Correct me if I am wrong, but what I read, stripped of the legalese is this:

 

It's not a credit agreement, because the account was meant to be in credit, so when we bounced things, it's because we refused to give credit, ergo it can't be a credit agreement. (and the charge, well, the judge said we can charge what we like just to decided whether to bounce or not)

If the stuff gets paid and not bounced, it then kind of is a credit agreement, but the charges are not for lending, but part of a package... and at that point, they lose me completely, I admit.

On top of that, it can't be under the CCA74 if it's CCA 2006, and again, they lose me, because unless Iam mistaken, although the CCA 06 is obviously more recent than the CCA74, it doesn't make the 74 obsolete, only changes some of its terms and sections, yes?

 

I have to say that even before the defence above was posted, I had kind of thought that there was a chink in the armour there, in that there is a certain logic in the fact that if somthing gets bounced, then indeed the credit is not created. HOWEVER, by the same token, once the banks take their charges, thereby creating an overdraft for their own purpose so they can pay themselves, whatever the reason, the credit is in fact advanced, even if the customer is not the one actually benefiting from it.

 

The only exception I could see is if you have, say, £100 in your account. A DD gets presented, value of £110. The bank bounces it, then takes £30 off your account for the privilege, but you are still in credit by £70. Strictly speaking, the bank hasn't given you credit at all, and therefore maybe the CCA regulation wouldn't apply.

 

HOWEVER (2), what of a credit card? If you APPLY for one and get given one and a credit limit, even if you then choose NOT to use it and shove it in the drawer instead, your agreement with the company still comes under the CCA, does it not? Therefore, one could argue that where there is a bank account, with the possibility that credit may be available at some point, then it still is regulated under the CCA. The only exceptions would be savings accounts, and basic accounts where you simply can't go over the limit, if you try, things don't go through and you don't get charged. Oh, hang on, there isn't such an account in the UK, is there?

 

In conclusion, it seems to me that the bank is relying on:

1 - intimidation, by first and foremost trying to get it kicked out of "protected" SC.

2 - In case that fails, then try to scare off the claimant with complicated arguments.

3 - If that fails... errrr.... well, in the past, they used to settle at this point, but would they dare again? Or will they throw their hat in the ring and actually try and bamboozle a judge with their 3-ring circus?

 

 

Yes Bookie it is completely insane and to avoid going myself insane rather than 'wander ' off onto the unknown paths i am clinging as close to the above

 

...because I believe 'any form of financial accommodation' is broad in its meaning

 

m2ae:-|

[Bookworm]

Probably a wise move, my friend, probably a wise move. I really should try and follow you on that path.

[means2anend]

In 2005 I opened up a current account with Abbey 'cos my account with HSBC was such that any wages that went in woyld have been eaten up for the next 6 months...

 

Unbeknown to me I had an automatic overdraft facility of £300 which I had not even asked for.

 

So straight away before any wages had gone in I had £300 tp play with subject to proof of employment etc etc...so you cannot tell me that in substance that that is not any form of credit..in fact that would fall squarely within that above definition ''any form of financial accommodation....and the fact that also there is no mention of it as an exempt agreement in s16 only goes to make the argument stronger...the amendments to s16 Which I assume were made by CCA 2006 also make no amendment to it being an exempt agreement.

 

m2ae

[means2anend]

Facts.The G Bank grants H (an individual) an unlimited overdraft, with an increased rate of interest on so much of any debit balance as exceeds £2,000.

 

Analysis.Although the overdraft purports to be unlimited, the stipulation for increased interest above £2,000 brings the agreement within section 10(3)(b)(ii) and it is a consumer credit agreement.

 

 

Running-account credit and fixed-sum credit.

10— (1) For the purposes of this Act

 

 

(3) For the purposes of paragraph (a) of section 16 , running-account credit shall be taken not to exceed the amount specified in that [paragraph]( “the specified amount ”) if—

 

(a)the credit limit does not exceed the specified amount; or

 

(b)whether or not there is a credit limit, and if there is, notwithstanding that it exceeds the specified amount,—

(i) the debtor is not enabled to draw at any one time an amount which, so far as (having regard to section 9(4)) it represents credit, exceeds the specified amount,

 

or

 

(ii) the agreement provides that, if the debit balance rises above a given amount (not exceeding the specified amount), the rate of the total charge for credit increases or any other condition favouring the creditor or his associate comes into operation,

or

 

(iii) at the time the agreement is made it is probable, having regard to the terms of the agreement and any other relevant considerations, that the debit balance will not at any time rise above the specified amount.

 

I found the above example in the Later sections of CCA 1974 ''Use Of Terminology'And Examples Of Use....

 

m2ae

Edited June 20, 2010 by means2anend

[Mightyacorn]

Rule 1. The banks are always right

 

Rule 2. On the very rare (?) occasion where they may be wrong then even if you have the audacity to take them to task, or even to Court, then Rule 1 applies

 

Rule 3. If however you find that the bank has acted unlawfully, illegally, unethically, etc., then please feel free to take whatever action you feel suits, but remember Rule 1 applies.

Edited June 20, 2010 by Mightyacorn

[rdm2006]

Rule 1. The banks are always right

 

Rule 2. On the very rare (?) occasion where they may be wrong then even if you have the audacity to take them to task, or even to Court, then Rule 1 applies

 

Rule 3. If however you find that the bank has acted unlawfully, illegally, unethically, etc., then please feel free to take whatever action you feel suits, but remember Rule 1 applies.

 

Rule 4 - when all else fails rule 1 applies

[means2anend]

I cant help but agree with the both of you!

 

I am however mindful that the above both do deal with Running Accounts and Fixed Sum Credit...and that here we are dealing with overdrafts on a current account...but is not an overdraft in it's very nature not a form of loan or any form of financial accommodation which just like the features of a regular credit agreement running account or fixed credit attract the features such as interest in relation to the Total Charge For Credit

 

m2ae

[means2anend]

delete for duplication!!!

Edited June 20, 2010 by means2anend
deleted for duplication

[008139]

I expect you have read it but as a reminder, there is lots of useful and interesting stuff in Coutts v Sebastyn about whether CCA applies (it was mainly with reference to the application of the determination quoted earlier in this thread) and some interesting OLD (ie pre test case judgment) quotes from the OFT. Conclusions para 36 onwards discuss a lot on the application of the CCA to unauthorised ODs.

 

 

Main bit which appears to answer the concerns over the CCA applying at all is thus;

 

1. It is common ground:
   
   (a) that the agreement for an overdraft of £2,000 in the terms of
   
   Coutts
   
   ' letter dated 5 April 2002 was a regulated debtor-creditor agreement within the meaning of sections 8 and 13© of the Act, providing for 'running-account credit' within the meaning of section 10(1)(a) of the Act (in effect, a revolving credit within the agreed credit limit of £2,000); and

 

 

 

[Bigdebtor]

There seemed to be a lot of things being "averred".

 

I've got two more:

1. The Banks have a strong aversion to truth, justice and decency.

2. I have an even stonger aversion to all of these bonus-earning *ankers!

 

BD

 

PS - good evening to our 3 guests - did you manage to nick the church collection bowls today?

[kennyh]

Much of this sounds bloody complicated - think I'll just wait and see!

[Bigdebtor]

In summary it seems the *ankers are trying to wriggle off the hook yet again!

 

BD

 

PS; 4 guests now!

[bustthematrix]

However, until fairly recently this same bank was telling its customers that bounced item and overdraft fees were there to cover it's costs, not as part of an overall package. These are from 2005:

 

"To cover our costs, we make a charge of £30 (maximum 1 charge per day) for any item we pay when your account is overdrawn in excess of any agreed limit. "

 

"To cover our costs, we make a charge of £35 (maximum three charges per day) for any item we can't pay."

Thanks. If you have ANY official correspondence from any Lender in this regard, please file them into the Bank Charges library!!!

[bustthematrix]

Nothing to do with penalties. If you look at clause (m) of Schedule 2 of the UTCCR, it says:

 

"(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract;"

 

The bank says, in 2005, that its charges are to cover its costs. I may say, however much I dislike it, fair enough. They have overheads and, if this is what it takes to ensure they are covered, so be it.

 

However, in the test case, it has suited the banks to reinterpret that particular element of the contract between us, and thus fall foul of Section 5.

Meaning that there's an argument about Lenders' misrepresenting the bases for charges? Is that part of the Govan plea?

[Falkirk1298]

Thanks. If you have ANY official correspondence from any Lender in this regard, please file them into the Bank Charges library!!!

 

Already done.

[Falkirk1298]

Meaning that there's an argument about Lenders' misrepresenting the bases for charges? Is that part of the Govan plea?

 

I don't know whether that forms part of the GLC case or not, but it seems to me that the misrepresentation is pretty clear.

[bustthematrix]

Already done.

Well done

 

I don't know whether that forms part of the GLC case or not, but it seems to me that the misrepresentation is pretty clear.

I was wondering how far that could be taken as part of a claim.

[means2anend]

Interesting!

 

But continual re-interpretation of a term amounts to it being vague and ending up being meaningless and in accordance with statutory interpretation where a term or provision is vague it should be construed in favour of the defendant whoever the defendant be.This applies in the Criminal law but I am not sure how far this principle would apply in Consumer Issues....unless someone can clarify?

 

m2ae

Edited June 21, 2010 by means2anend

[Bigdebtor]

Francis Bennion certainly never intended any creditor to benefit from "vagueness" - so it should always benefit the consumer/debtor.

 

BD

[008139]

Under the UTCCR if a term is vague or not in plain intelligible language the meaning most favourable to the consumer applies.

 

However the judge in the test case has deemed the majority of specific charging terms as in plain intelligible language.

 

How that reads across to the CCA I don't know.

Edited June 21, 2010 by 008139