Excessive bank charges - anybody going to complain to their bank?

[Kim]

Yes it is Emma, we have lost several hundred pounds just in the court charges alone. Do you think there is anything else I can do Emma? or it is still a waiting game. I must admit that after hearing that the OFT had lost it's case, I thought that was goodbye to all our money, os your post has made me feel a little more optimistic.

[EmmaG]

Hi Kim,

No the hearing just means that people have waited 2 years to restart their claims. It might be that you just have to amend your particulars of your claim.

This is the blurb I have received today.

Supreme Court Judgment and what is means,


Well I have just got back from London where I spent a lot of time trying to put right the media stories that the Bank’s had won and this was the end for consumers, gladly I note that most of the Media have now reported that this case was not as important as many people thought is was:

I am going to set out parts of the Judgment and explain what they mean if needed. After which I will outline what I think should happen next.


The Judgment

Firstly the Lord Walker highlighted the fact that many members of the public were not aware of the limited nature of the issue, which the court had to decide in the appeal.

At Para 45 Lord Walker Said “…The Directive and the 1999 Regulations apply only to terms which have not been individually negotiated“. Clearly the contract we all entered into with the banks has not been individually negotiated so the regulations do apply.

Lord Philips Para 57. Stated the issue is whether the relevant charges constitute “the price or Remuneration, as against the services supplied in exchange” within the meaning of the Regulation. If they do not, the attack on the fairness of the term that is open to the OFT will not be circumscribed (restricted) by Regulation 6(2)b. If they do, then they will still be open to attack by the OFT on the ground that they are “Unfair” as defined by regulation 5(1) but that attack cannot be founded on an allegation that the Relevant Charges are excessive by comparison with the services which they Purchase, for that is forbidden by regulation 6(2)b

So what does this mean, well it means that the Court has ruled that the charges for bounced direct debits and unauthorised overdrafts etc are part of the price for the services, therefore they cannot be tested for fairness under Regulation 6(2)b of The Unfair Terms in Consumer Contract Regulations 1999, However the Court has said that the OFT can assess the Fairness of the price under Regulation 5.1. According to other criteria. (See Para 59)

This point is further explained in Para 80. Lord Philips states ‘it seems to me that this reasoning is relevant not to the question of whether the Relevant Charges form Part of the price or remuneration for the package of the services provided but to whether the method of pricing is fair. (My emphasis added) It may be open to question whether it is fair to subsidise some customers by levies on others who experience contingencies that they did not for see when entering into their contracts. If not it may then be open to question whether the Relevant Terms fall within Regulation 5(1)….” Clearly his lordship highlighted that the court may be persuaded that it is unfair for some consumer to pay for services that other consumers benefit from for free.
What’s more it is mostly the consumers who are on low incomes and struggling financially that are paying for everyone else. This is in my opinion not fair, and shows the banks have not acted in “Good faith”. Or as Lord Mance’s suggested in the trial, that ‘the banks were engaged in a sort of Robin Hood in reverse’ (see Para 2) I would suggest he means the banks were taking from the poor to subsidise the rich.

All the Lords appear to have agreed with Lord Walkers final Paragraph that being 52, in which he said ‘…This decision is not the end of the matter’, as Lord Philips explains in his judgment. Moreover Ministers and Parliament may wish to consider this matter further. They decided in an era of so-called “light-touch” regulation, to transpose the directive as it stood rather that to confer the higher degree of consumer protection afforded by the national laws of some other member states. Parliament may wish to consider whether to revisit that decision.’

So what does all this mean, well it means the following

1. The OFT can still look at the charges under UTCCR 1999, and always has been able to. They could now launch a new test case. (However, what must be asked is why was there a two year test case on a very narrow point of law? when the OFT already had the ability to assess the fairness of theses charges under Regulation 5.1 and others )

2. All consumers who have submitted a claim using the Old Particulars of Claim, arguing that the price was unfair and or that these are a penalty charges. Needs to amend their claim to include an argument under regulation 5.1. (a new Particulars of claim will be live on the site tomorrow with full instructions on what you need to do)

3. We also need to put pressure on the Government to amend the Regulation so we all have the same consumer protection rights that other member states have. (So get writing to your MP’s a template letter for this will be on the site within 48 hours)

4. I am sorry to say but I would like to see the stay remain in place, for a least a month. This will give consumers time to amend their claims and other consumer groups and I will be discussing the possibility of joining forces to bring a joint Class action. I feel this would insure that we could make sure that all the legal arguments are covered in full. I will update you all on this when I have spoken to the other consumer forums.


Finally, I will explain Regulation 5(1) in more detail on the site for those that are interested. However, what was important in this news letter is to confirm that this was basically a set back to the OFT and not to consumers. Claims can still be filed.
The FSA has also lifted the Wavier.

I hope that the OFT if they do decided to bring a new action, that they will now invite the consumer groups to the table. Something we asked them to do before this test case, sadly that request was refused.

To conclude, the test case has only resulted in us having to amend the Particulars Of Claim and resulted in a two year delay, other than that we are back to the position we were in two years ago.

So was this test case a victory for the Banks, yes they beat the OFT on a small point of law, they did not beat the consumer forums and or the consumers.


Kim I see keep an eye in the next couple of days as to what your next actions should be, I am determined to get your charges back if we can.

[Kim]

Thanks Emma - you're a star! x

[EmmaG]

No problems Kim, I am also interested to see what the next step is as I have got a couple of older claims that I was about to lodge at the courts for older charges (over 6 years old).

On a side issue, looks like the Halifax might have a winding up petition soon so one of the consumer action group members got judgement against the halifax and they have not paid up as the judgement is more than £5,000 they will be unable to send in the bailiffs but can wind up the Halifax if they do not pay.

http://www.consumeractiongroup.co.uk...over-hows.html