OFT Press Release

[mikeruss]

I think its a positive start

 

they make it clear that £12 is not in itself an acceptable amount - its up to the courts to decide what that would be.

 

good news!

 

Mike

[Spiceskull]

£12 is NOT the maximum:

The OFT added it wanted firms to recalculate their charges and only under "exceptional" circumstances would a charge in excess of £12 be allowed.

If anyone is going to use the OFT statement to justify their claim to a judge, it is IMPERATIVE that you read EVERY word, and understand what is being said.

 

Whilst the statement appears to side with the consumer, it must be remembered that the banks will have had some input to the reporting process. Whilst they are quoted as being 'unhappy,' you can bet your bottom dollar that the wording can be twisted to their advantage if they try hard enough.

 

Like everything, this should only be used as one of many tactics and arguments against the bank. The best argument is still that the charges are punitive in nature, and do not reflect actual cost to the bank.

[Guest stephen]

there not doing there job, if they know the court will find £12 is unfair, then why have they set that as the limit, I am know looking at possibly bring a case against the OFT

 

And get the court to force them to reassess there assessment

 

As I said all along the OFT is not doing its duty,

[Seminole]

To my non-legal mind the most interesting bit is where it says that £12 is the maximum and not the minimum and courts need to make that judgement. Surely this means that the court, in reaching this decision, will need to consider evidence of costs and the banks will have to provide details to support any charge that they come up with.

 

I think this is generally quite positive but I look forward to hearing what BF has to say later.

[monkey_uk]

*MADE STICKY*

 

I'm very pleased witht he statement, but I'm also a little bit cautious in ragards to it's implications.

[Spiceskull]

IMHO it is still an opportunity for the banks to shoot themselves in the foot. They still have to prove that the (£12) charge is NOT a penalty, and that it is fair.

[Spiceskull]

They are doing a follow up story on the news this evening, featuring people who have got their charges back from the bank...anyone on this group taken part in this programme?

[Bookworm]

Wow.

 

This is good stuff.

 

OFT says previous charges are too high to be legally fair.

They also say it applies to other products.

They say that you could automatically challenge an above £12 charge through them.

They say that even if the charge is £12 or just below, it doesn't make it lawful, and that a court would be likely to agree. The provider would definitely be expected to show proof that the charge is justified and how.

 

I am impressed, after expecting a complete whitewash!

 

"This has not generally been accepted by most of the eight credit card issuers."

No kidding! I bet they expected the whitewash too, and are currently NOT happy!!!

Just for one moment, though, I am. Very. And I can't help feeling that the little show made a few weeks ago by this group might have helped quite a bit.

[bram stoker]

And I can't help feeling that the little show made a few weeks ago by this group might have helped quite a bit.

 

I hope so. There's a lot of hard work going on here.

 

It will be interesting to see what the response is from the banks. What are the views of the group - should we wait for the response before filing any claims. I don't think so, but could you guys debate this one out for me please?

[MondeoST24]

The "Calculating Fair Default Charges in Credit Card Contracts" documentation is also very good. 35 pages but well worth reading. Can be downloaded from the same page as the OFT statement

[Guest stephen]

This is not a good Press release they have said nothing about people reclaiming charges they already incurred over the years, or about defaults lodge on people credit reports,

 

All they done is tried to agree a price that the banks wont cause to much fuss over, this is disgusting. Yes I sure the banks will have a little moan to show that there not happy but even at £12 there still be making billions from theses charges.

 

The other problem is the £12 limit a daily charge or a one of limit?

 

I.E can the banks now charge me £12 a day and claim they are acting within the oft guild lines,

[Spiceskull]

I am know looking at possibly bring a case against the OFT, And get the court to force them to reassess there assessment

Anything that we can do in terms of letters from banks etc?

[Neo]

Yes I agree with Stephen and I expect all people do.

 

There is no mention of are they allowed to apply multiple 12 quid transactions throughout the month, thus causing the snowball effect.

 

I personally think it has not done anything really apart from make the unaware Joe Public/Average slightly better off as it were.

[Seminole]

I think the key thing is that it probably hasn't made matters any worse.

[Bookworm]

I agree with Stephen and I expect all people do

.

 

 

I don't, not by a long chalk.

 

Considering the OFT statement, is primarily about credit card charges, the question of multiple £12 doesn't really apply, as the c/c "only" apply 1 charge a month (2 if there's a late payment and an over the limit).

 

Considering that sadly, the VAST majority of people will not challenge the charges, you have now MILLIONS of people who are going to benefit.

 

The OFT also has clearly stated (and I just watched Working Lunch, where it was reiterated) that it does not mean that the rest is now out of bound to reclaim, and they have made it quite clear that a court action is still the way if you want to challenge the charges.

 

Ok, so it's far from perfect. Well, yeah. But did ANYONE really expect the OFT to say "ok, 2 quid maximum"? Seriously? Come on!

 

To me, it's a bl@@dy good start. Not an end.

[wolfie]

I think the key thing is that it probably hasn't made matters any worse.

Surely it will strengthen peoples defence when they are claiming back there charges

A judge would, I am sure be greatly swayed by this statement especially if you are arguing against charges of £30+ per go the banks won’t have a leg to stand on!

[lynzpower]

i think this is positive.

 

I think that a0 the general public are more aware

I think that the statement from the OFT are making banks even less likely to consider going to court

I think this MAY mean some banks cough up quicker.

 

Surely, that has to be a good thing?

[Seminole]

I was extremely pessimistic about what the OFT was going to say and I'm please to say that, at first glance, I was proved wrong. However, I haven't had a chance to read everything thing through yet and so I am reserving judgement. It could well be very good news but I have learnt that, with this Government, the devil is always in the detail.

 

One thing that is bothering me slightly is that it says that £12 should be the maximum save for "exceptional circumstances". I haven't seen any examples of what such circumstances might be. If this is going to turn into an argument about the proportionality of charges then there may be a problem. In other words £12 for one person going £50 over limit may be OK but could it be argued that an "exceptional" individual incurring dozens of charges should be paid more? I don't think so, I don't think a judge would go along with this but we need to examine all of the angles.

 

As I said I don't think it makes matters any worse and should enable current and future complaints to proceed.

[Maxie]

Yes, it is disgusting - the OFT doing aother flim flam job, not protecting the cosumer at all, and giving the CC company a get out of jail card to play.

 

When they right to people about how fair and transparent the charges are, they can not add, 'we operate a charing tariff in accordance with OFT guideline, the OFT being the statutory regulator' etc, which I agree will put alot of people off.

 

I take excpetion of the note 2 what states '...cases involving less harm to consumers. Card issuers are required to confirm their response to the OFT statement by 31 May 2006.' So its ok to harm consumer a little bit! The OFT have given into the banks again - they always do.

 

Note 3 states that 'A fair default charge should not exceed a reasonable estimate of certain limited administrative costs which the credit card issuer reasonably expects to incur as a result of default'. so they have set an upper limit of £12 which yes, they say they are not endorsing this limit, but Vicariously they are, as CC companies will use this limit and us the OFT line.

 

As they say, it is up to the courts to decide what is a genuine pre estimate or not, but they have handed the banks a line of defence that might be all a commercially minded district judge needs to find in their favour - mark my words, they will role the dice on this to see what happens.

[Bookworm]

I think the "exceptional circs" relates to this:

 

But for example, where a card issuer [...] offers credit cards only to customers that satisfy a relatively high scoring requirement it may be able to set a fair default fee at a level above the threshold.

 

Although I'm not convinced that this one would wash, unless they can prove that their credit scoring applications are considerably more throrough and costly than average (private detectives, etc... lol)

[Seminole]

Yes, it is disgusting - the OFT doing aother flim flam job, not protecting the cosumer at all, and giving the CC company a get out of jail card to play.

 

When they right to people about how fair and transparent the charges are, they can not add, 'we operate a charing tariff in accordance with OFT guideline, the OFT being the statutory regulator' etc, which I agree will put alot of people off.

 

I take excpetion of the note 2 what states '...cases involving less harm to consumers. Card issuers are required to confirm their response to the OFT statement by 31 May 2006.' So its ok to harm consumer a little bit! The OFT have given into the banks again - they always do.

 

Note 3 states that 'A fair default charge should not exceed a reasonable estimate of certain limited administrative costs which the credit card issuer reasonably expects to incur as a result of default'. so they have set an upper limit of £12 which yes, they say they are not endorsing this limit, but Vicariously they are, as CC companies will use this limit and us the OFT line.

 

As they say, it is up to the courts to decide what is a genuine pre estimate or not, but they have handed the banks a line of defence that might be all a commercially minded district judge needs to find in their favour - mark my words, they will role the dice on this to see what happens.

 

I can see that argument but is not also true that to use it, the banks will have to reveal their costs?

[mikeruss]

have gone through it in more detail and still believe what I said before

 

it is a good step forward and generally in favour of the consumer

 

it might not spell out everything we want, but it could be a hell of a lot worse

 

onwards and upwards from here I hope

 

Mike

[Spiceskull]

Good to see that the banking industry still employs people with a sense of humour:

In response, the Association of Payment Clearing Services (Apacs), which represents credit card firms defended default charges as "fair, transparent and lawful."

[Maxie]

Well yes, I would seek to put the CC company to proof as to how they can justify their charges, and at £12 they are almost certainly penalty charges but I have a fear that in the small claim track, so District Judges might just give them the benefit of the doubt.

[Guest stephen]

.

 

 

I don't, not by a long chalk.

 

Considering the OFT statement, is primarily about credit card charges, the question of multiple £12 doesn't really apply, as the c/c "only" apply 1 charge a month (2 if there's a late payment and an over the limit).

 

.

 

So what dont you agree with? the the oft statment says this will apply to current account etc.