OFT bank charges investigation derailed by Supreme Court ruling

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  • Just typical of the OFT going after big business without thinking it through. Seems the judge said that the OFT got the terms of reference wrong. Now thousands of people will be even more out of pocket as the banks will not settle any claims and could even put them up. Congrats Mr Fingleton

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  • I can't believe this. I just heard on the radio that whoever represented bank in courts, said - There is no such thing as free banking. Helloooo, we - people know that, what we also know is that the whole charging system is Unfair!!!!! For god sakes!!1 I am so annoyed about this. What can we do?! So, so Unfair!!!

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  • Another bailout for the greedy banks by those worried about the value of their personal shareholdings....what a disgrace.

    Banks borrow money (from the public) at rates as little as 0%....can the public borrow at these rates, or anywhere close to them? No. Banks make plenty of money by lending to the public at interest rates as high as 20% or more.

    The banks have been creaming off this country's wealth for their shareholders for years, yet the public is currently underwriting them. This is ridiculous, and a national scandal. The government needs to end this cosy relationship with the banks and provide a proper, state run bank which lends to the public and small businesses at affordable interest rates, and isn't run on a profit basis. That might actually lead to some wealth creation in the country, and less incidences of financial hardship for poor individuals whose situation is being made worse by punitive and excessive charges on top of the already high overdraft interest rates they are paying.

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  • As the Supreme Court has let us all down, we will just have to take action against the banks ourselves.

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  • Heaven preserve the legal profession (or perhaps their employers and clients) if the first four posts were made by lawyers as they contain just unreasoned ill informed emotive points without any rigorous analysis

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  • How oh how Anonymous 12:37 got published on this site is way beyond me, but what do I know....

    Anyway, overdraft charges (and any other charge for that matter) are conditions of the account. It's as simple as that. They are avoidable and so really, the OFT was simply answering to public pressure. I wonder how much money they have wasted. Don't we also fund the OFT by the way? I agree with the very first comment. The OFT have messed up here.

    Talking about interest rates and the banks' reluctance to lend is a completely different discussion. This is clearly an emotive subject for us all but that's not really an excuse for Anonymous 12:37pm encouraging that sort of behaviour. Also, re the suggestion of a state run bank to lend to us all - that would be brilliant in communist Russia. In modern day Britain, not such a great idea

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  • The ruling of the Supreme Court is not about the unfairness of bank charges but about the legal status of OFT to challenge the charges. It is open to the consumers to individually pursue their banks in Court where unfair charges has been levied.

    I will be among the first group to challenge the unfairness of the charges in court post the judgement.

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  • The thing that annoys me about this is that.

    1) They have said their is no such thing as free banking although most banks pay minimul interest on holding our money if any. And most bank accounts now have a sub charge per month anyway.

    2) We bail them out with tax payers money for them to use it on bonuses and golden handshakes for leaving directors. Not for improving lending at reasonable rates for which it was meant.

    3) the charge of £20-35 per charge, how can this be warrented. All they do is send an automated letter and have an automated system leave you a message on your telephone.

    As for the idea of a government run bank, they have caused this problem in the first place. Bailing out these banks when they should of been left to go bump like they deserve. And also has anyone known the government to do anything successfully. They cannot even process a Direct debit payment for Council Tax without taking more than they should.

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  • Absolute disgrace for both the Supreme court and the banks. Whatever happened to consumer rights in this country?

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  • This decision is not particularly surprising. Given that the banks involved are propped up by taxpayers’ money, a judgement in favour of siphoning some of this money back to account holders in the midst of this economic crisis was always unlikely. Had this claim been brought 3 years ago then the cause may have gained favour with the Lords.

    Like it or not, any sort of claims against banks involving potentially large payouts are going to fall flat until they start making shed loads of cash again and this country’s economy is comfortably out of recession.

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  • BLOODY BANKS. Dont they steal enough from us already?? Now the supreme court has found in their favour, it is going to get a hell of alot worse now. They are going to charge for EVERYTHING!!!! Use a cash machine, £2.50 thank you, an account enquiry, £2 to £5 thank you. Am I being paranoid??? You wait. You aint seen nothing yet.

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  • "held that such an investigation would be beyond the scope of the OFT", therefore individual consumers would still have a case. I am but only a law student, but am I right in thinking that the as the appeal court held that the penalties were unfair under the fair Terms in Consumer Contracts Regulations 1999, this ruling on this point would still be authoritative? surely the ruling regarding the scope of a claimant would be a separate issue therefore the decision of the appeal court that the charges are indeed unfair could be used as authority for claimants?

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  • I dont get it.

    UCTA says these charges must reflect admin costs and cannot be punitive.

    £30 has been shown to be patently absurd as a figure reflecting the true cost of a bounced cheque/ unplanned overdarft.

    It doesnt matter that these costs subsidise other areas of the bank - they are still punitive against those that incur them.

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  • Puts the onus completely on the FSA to finally get to grips with the banks and enforce 'treating customers fairly'. Don't expect they will of course considering how abject their regulation has been so far. The role of the OFT and FSA needs a complete revision as no one at the moment is protecting the public from greedy big business. (Goes for many other useless and expensive regulators too).

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  • This is all really quite bizarre ! An unauthorised overdraft is just that, unauthorised - money taken from the bank without it's consent - it is just about tantamount to theft. I cannot see any moral or legal argument which the unauthorised borrower can justifiably deploy against the bank charging him/her for that offence. There may be an argument about how much, but to my mind that is an entirely contractual issue.
    If you don't want to pay bank charges for it, then don't take their money without their consent !

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  • I think it's a bit unfair of Anonymous 11.40 to slam the OFT in this way. After all, they did win at High Court and Court of Appeal stage... Presumably he/she has never lost a case, in which case Anonymous please reveal yourself so we can all instruct you! Your criticism (and others here) intimate that fighting this was a waste of our money. Personally, I'm glad they didn't just roll over, and presumably if they thought they'd lose, they wouldnt' have bothered in the first place.

    I think it's also disingenuous to dismiss comments flowing from the ever-rising tide of public anger ('emotive' Anonymous 1.11) and equally to dismiss links with bonus and bank bailouts. In the public mind they are linked. In legal terms, obviously, one offence is not germane to another, but this judgement will only serve to look, in the public mind, as if one part of the Establishment is propping up another part, to the detriment of the consumer.

    The law is supposed to be blind, to offer a genuine, unemotive level playing field to all citizens. But as a citizen it is very difficult to imagine taking on these seemingly untouchable monoliths, possessed of incredible financial resources (look at the amazing array of QCs the banks fielded against the OFT for a start). If any of us do decide to pursue them, it can be time-consuming, difficult and, ultimately, crushing. Banks, ultimately, don't care if they win or lose; they just raise other charges to ensure continued shareholder value. To the Little Man (or woman) it can be an important life-event. Having waded through endless blocking and delaying measures on the part of bank lawyers and reams of bewildering paperwork and aggressive, accusatory letters, the victory can often be a Pyrrhic one.

    On the face of it, this judgement appears to do just that: to dismiss a kind of class-action against the banks while saying 'you can do it on your own if you want'. I hope many will. Many will simply give up. That the OFT has apparently overreached its remit (the Unfair Terms In Consumer Contracts Act clearly NOT to be taken at face value!) is not a matter of FACT. It is a matter of legal opinion, and we are left only to wonder about the Supreme Court's refusal to allow an appeal to a Higher set of legal opinions.

    Right or wrong in legal terms, this victory for the banks (oops, sorry, Clarification...) could not have come at a worse time and will feel to the consumer as if we are being kicked while we are down.

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  • Why the sympathy for people charged for using money they were not authorised to use?
    Would you talk the same indulgent attitude to a neighbour who borrowed your car without permission, because his was not available. Or would you be on the phone to the authorities?

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  • All is not lost. The incompetent OFT has been using the wrong legislation all alog in my opinion.
    The frst thing they should have done is appeal against the penalties decision earlier this year. The second thing they should have done is us S5 of the UTCCR not 6(2).
    But then who am I to tell the all powerful, all useless OFT.

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  • A straw poll of the three lawyers in the office kitchen produced 2 totally surprised by the ruling and 1 not remotely surprised at all.

    I have yet to read the judgment in detail, so I am not going to comment on it directly - the devil is almost certainly in the detail.

    But, even if I do not think it is justified, I can, however, understand why all sorts of conspiracy theories will be put forward.

    It just goes to show that legislation does not necessarily mean what it says but what the final court of appeal says it means.

    The OFT do not seem to emerge from this with any credit: their strategy was wrong and their tactics have been wrong too.

    Abandoning the common law penalty angle after the High Court was needlessly risky and one report I have seen suggests that they missed another angle within UCTA itself as well.

    Something emerges about the Supreme Court too: it does not seem to have worried about courting public popularity for itself! (Whether that is foolish or reassuring, I have yet to make up my mind.)

    PS On a more facetious note, has anyone else noticed the similarity between the Supreme Court's logo and that of the fictional Omega Sector agency in True Lies?

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  • Interestingly, in my inbox this morning, I had an email from Natwest advising me of a change to their terms and conditions....and lo and behold, no unauthorised OD fee if OD by less that £15.00 and fee for unauthorised OD down to £5 from £38. Perhaps that have realised that they are vunerable under the Unfair Contract Terms in Consumer Contracts Regs after all!!

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