FSA appears to endorse penalty charges by banks!!

[BankFodder]

This quote is taken from the FSA website. They make the comment without qualification ir criticism. This appears to be a direct endorsement of the practice of levying of unlawful penalties by banks.

It is also an acknowldgement that penalty charging is happening - despite denials by the banks

 

This should be drawn to the attention of the OFT as well.

 

If you miss the odd credit card or loan repayment, probably not much will happen. There might be a penalty charge and, of course, your debt won't have got any smaller and it might get recorded on your credit file. But if you persistently miss credit card or loan repayments or fail to pay bills, you will quickly run into serious problems.

 

 

Source

http://www.fsa.gov.uk/consumer/04_CREDIT_DEBT/mn_what_happens.html

[BankFodder]

This quote is taken from the FSA website. They make the comment without qualification ir criticism. This appears to be a direct endorsement of the practice of levying of unlawful penalties by banks.

It is also an acknowldgement that penalty charging is happening - despite denials by the banks

 

This should be drawn to the attention of the OFT as well.

 

If you miss the odd credit card or loan repayment, probably not much will happen. There might be a penalty charge and, of course, your debt won't have got any smaller and it might get recorded on your credit file. But if you persistently miss credit card or loan repayments or fail to pay bills, you will quickly run into serious problems.

 

 

Source

http://www.fsa.gov.uk/consumer/04_CREDIT_DEBT/mn_what_happens.html

[Falkirk1298]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

[Falkirk1298]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

[BankFodder]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

 

I think that the FSA is in a kind of quasi-fiduciary position vis-a-vis the public whose interests they are meant to represent. If this is correct then I don't think that they are entitled to take any middle ground. They must approve or disapprove. The fact that they refer to penalty charges in a way which suggests that this is normal, reasonable and acceptable amounts, in my view, to an endorsement.

The FSA are fully aware that they have been created to hold out an expertise upon which ordinary people without special knowledge are likely to rely and are reasonable in doing so.

 

I agree very much with you that it is a good thing that an authoritative body like this have come right out and said exactly that the charges are penalties. As I said, it is an acknowledgement of what the charges really are.

[BankFodder]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

 

I think that the FSA is in a kind of quasi-fiduciary position vis-a-vis the public whose interests they are meant to represent. If this is correct then I don't think that they are entitled to take any middle ground. They must approve or disapprove. The fact that they refer to penalty charges in a way which suggests that this is normal, reasonable and acceptable amounts, in my view, to an endorsement.

The FSA are fully aware that they have been created to hold out an expertise upon which ordinary people without special knowledge are likely to rely and are reasonable in doing so.

 

I agree very much with you that it is a good thing that an authoritative body like this have come right out and said exactly that the charges are penalties. As I said, it is an acknowledgement of what the charges really are.

[diddled]

An Extract from House of Commons

Treasury – Minutes of Evidence 1st July 2003

 

Q59 Mr Mudie: So it stops the penalty payments?

Ms Perchard: Yes.

Ms Edwards: And we ask them to freeze the interest and to stop penalty payments.

Ms Harrison: Perhaps I can say a word about penalty payments because, that aside, the banks are not any better than the ones that are not in the Code in terms of penalties because a penalty in law is something that is not enforceable actually unless it is a genuine pre-estimate of the loss that the party is suffering as a result of a breach of contract, a non-payment. The Financial Services Authority is minded, when it is regulating mortgages soon, that it will effectively outlaw any sort of penalties if they are not a genuine pre-estimate of loss or actual loss. Again the middle-class consumers, particularly those that are lawyers, ring up their banks when they get charged £20 for the odd returned cheque or whatever and argue the toss and it will be removed, but the ordinary person, particularly a person on low income, is not going to make that challenge, but that challenge ought to be made time after time because I am not convinced that those penalties that are imposed are actually a genuine pre-estimate of their loss or their actual

[diddled]

An Extract from House of Commons

Treasury – Minutes of Evidence 1st July 2003

 

Q59 Mr Mudie: So it stops the penalty payments?

Ms Perchard: Yes.

Ms Edwards: And we ask them to freeze the interest and to stop penalty payments.

Ms Harrison: Perhaps I can say a word about penalty payments because, that aside, the banks are not any better than the ones that are not in the Code in terms of penalties because a penalty in law is something that is not enforceable actually unless it is a genuine pre-estimate of the loss that the party is suffering as a result of a breach of contract, a non-payment. The Financial Services Authority is minded, when it is regulating mortgages soon, that it will effectively outlaw any sort of penalties if they are not a genuine pre-estimate of loss or actual loss. Again the middle-class consumers, particularly those that are lawyers, ring up their banks when they get charged £20 for the odd returned cheque or whatever and argue the toss and it will be removed, but the ordinary person, particularly a person on low income, is not going to make that challenge, but that challenge ought to be made time after time because I am not convinced that those penalties that are imposed are actually a genuine pre-estimate of their loss or their actual

[Bookworm]

An Extract from House of Commons

Treasury – Minutes of Evidence 1st July 2003

 

[snipped]The Financial Services Authority is minded, when it is regulating mortgages soon, that it will effectively outlaw any sort of penalties if they are not a genuine pre-estimate of loss or actual loss.

 

Note the highlighted. Says it all , doesn't it. :twisted:

 

xxx

ML

[Bookworm]

An Extract from House of Commons

Treasury – Minutes of Evidence 1st July 2003

 

[snipped]The Financial Services Authority is minded, when it is regulating mortgages soon, that it will effectively outlaw any sort of penalties if they are not a genuine pre-estimate of loss or actual loss.

 

Note the highlighted. Says it all , doesn't it. :twisted:

 

xxx

ML

[Falkirk1298]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

 

I think that the FSA is in a kind of quasi-fiduciary position vis-a-vis the public whose interests they are meant to represent. If this is correct then I don't think that they are entitled to take any middle ground. They must approve or disapprove. The fact that they refer to penalty charges in a way which suggests that this is normal, reasonable and acceptable amounts, in my view, to an endorsement.

The FSA are fully aware that they have been created to hold out an expertise upon which ordinary people without special knowledge are likely to rely and are reasonable in doing so.

 

I agree very much with you that it is a good thing that an authoritative body like this have come right out and said exactly that the charges are penalties. As I said, it is an acknowledgement of what the charges really are.

 

Just in from work, doesn't make for fluid discussion!

 

I see what you're saying about the FSA, and in an ideal world you would be right. However I suspect this is only one, and probably not one of the bigger, of the FSA's priorities at the moment. I think they are taking a deliberately neutral line until they inform themselves thoroughly.

 

I don't think they are referring to penalty charges as beig reasonable or acceptable, they are simply stating that they exist and that in itself is a tacit concession that they are unenforcable, but they won't say anything more concrete until they've investiagted and are 100% sure of their (and the Government's!) ground.

[Falkirk1298]

I don't see how it's an endorsement, just a statement of fact. Come to that, the FSA defining charges as "penalty charges" is a good thing, since they have said in writing that they are "penalties".

 

I think that the FSA is in a kind of quasi-fiduciary position vis-a-vis the public whose interests they are meant to represent. If this is correct then I don't think that they are entitled to take any middle ground. They must approve or disapprove. The fact that they refer to penalty charges in a way which suggests that this is normal, reasonable and acceptable amounts, in my view, to an endorsement.

The FSA are fully aware that they have been created to hold out an expertise upon which ordinary people without special knowledge are likely to rely and are reasonable in doing so.

 

I agree very much with you that it is a good thing that an authoritative body like this have come right out and said exactly that the charges are penalties. As I said, it is an acknowledgement of what the charges really are.

 

Just in from work, doesn't make for fluid discussion!

 

I see what you're saying about the FSA, and in an ideal world you would be right. However I suspect this is only one, and probably not one of the bigger, of the FSA's priorities at the moment. I think they are taking a deliberately neutral line until they inform themselves thoroughly.

 

I don't think they are referring to penalty charges as beig reasonable or acceptable, they are simply stating that they exist and that in itself is a tacit concession that they are unenforcable, but they won't say anything more concrete until they've investiagted and are 100% sure of their (and the Government's!) ground.

[BankFodder]

You are probably right but it is careless of them and it produces a culture of belief in the validity of penalty charges.

[BankFodder]

You are probably right but it is careless of them and it produces a culture of belief in the validity of penalty charges.

[Falkirk1298]

You are probably right but it is careless of them and it produces a culture of belief in the validity of penalty charges.

 

It was careless of them to define the charges as "penalty" charges!

[Falkirk1298]

You are probably right but it is careless of them and it produces a culture of belief in the validity of penalty charges.

 

It was careless of them to define the charges as "penalty" charges!

[BankFodder]

I don't think that they defined them.

They simply called a spade - a spade

[BankFodder]

I don't think that they defined them.

They simply called a spade - a spade

[BankFodder]

This topic was closed on 03/05/19.

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