Banks may challenge charges case - BBC

[GeordieJC]

http://news.bbc.co.uk/1/hi/business/7412119.stm

[richwhit]

The Financial Times seem very confident of how things will pan out over the next couple of days - seems to be a very timely leak from the Banks PR team.

Banks to appeal against overdraft judgment

By Megan Murphy, Law Courts Correspondent
Published: May 21 2008 03:00 | Last updated: May 21 2008 03:00

Britain's largest retail banks are to appeal against a court ruling on overdraft charges in a move that could delay resolution of the closely watched case. Hundreds of thousands of consumers have sought refunds of fees charged for unauthorised overdraftsor bounced cheques.

Tomorrow eight high street lenders, including HSBC, Barclays and the Royal Bank of Scotland, will seek permission to appeal against a High Court judgment that the charges are subject to unfair consumer contract regulations.

The issue, while technical, is at the core of efforts by consumers to reclaim billions in overdraft and other fees. So-called "unpaid item" fees have ranged as high as £38 per transaction. If the charges are deemed to be subject to consumer regulations, the Office of Fair Trading would have the authority to cap the fees at a much lower level.

Analysts say this could cost the banks £10bn in lost revenue, potentially forcing them to impose surcharges on services such as ATM withdrawals and cheque-cashing to make up the shortfall.

The OFT is not expected to contest the banks' application to appeal against the High Court ruling, according to sources close to the litigation. It is also thought to be unlikely that Mr Justice Andrew Smith, who handed down the original judgment in April, will refuse permission, given the significance of the legal principles at stake. Individual compensation claims will remain on hold under an earlier agreement with the Financial Services Authority.

The OFT, which brought the test case in response to a deluge of consumer complaints, has yet to announce whether it believes the current level of overdraft charges is unfair, or what a "fairer" amount would be. However, observers have pointed to the regulator's decision to cap the fees levied on late credit card payments at £12 in 2006 as indicative of its view on the appropriate level of charges.

Consumer groups have consistently argued that overdraft fees are misleading, arbitrary and much higher than the cost of processing the transactions. The banking industry claims that the charges are a legitimate payment for services rendered, such as notifying customers of unpaid debits and taking the credit risk of granting an unauthorised overdraft.

Mr Justice Smith is also expected to set a date for further hearing on whether some historic overdraft terms not dealt with in his first judgment can be classified as unlawful "penalty" charges.

[showergirl]

The banks promised to work with the OFT and the courts to bring this matter to a speedy end. What a bunch of liars they have turned out to be. I am really angry that they are allowed to hide behind the waiver and make huge profits whilst we poor people keep getting shafted by them. Lets go back to the days where you received your wages in cash each week, paid your bills by cash and tell the banks where to stuff it

[skydivingisfun]

The banks promised to work with the OFT and the courts to bring this matter to a speedy end. What a bunch of liars they have turned out to be. I am really angry that they are allowed to hide behind the waiver and make huge profits whilst we poor people keep getting shafted by them. Lets go back to the days where you received your wages in cash each week, paid your bills by cash and tell the banks where to stuff it


Never had a problem when it was a wage packet!!!!!!!!!!!!!!!!!!!!!!!!!!!

[NickRobs]

So if they do appeal then it is unlikely that we will see any money untill next year?

[BankWhacker]

The banks promised to work with the OFT and the courts to bring this matter to a speedy end. What a bunch of liars they have turned out to be. I am really angry that they are allowed to hide behind the waiver and make huge profits whilst we poor people keep getting shafted by them. Lets go back to the days where you received your wages in cash each week, paid your bills by cash and tell the banks where to stuff it


The litigation agreement allows for either party to appeal. The banks will have 21 days to submit the precise legal grounds of their appeal. It won't include all the aspects that the initial hearing dealt with, just the elements that the banks disagree with ie the fairness assessment. I suspect that the appeal hearing would be scheduled within a couple of months. Judgments on appeals are usually handed down within a couple of weeks.

[Weemonk]

The banking industry claims that the charges are a legitimate payment for services rendered, such as notifying customers of unpaid debits and taking the credit risk of granting an unauthorised overdraft.



Right, I've sat back patiently reading the threads and watching to see what happens but now I'm right ****ed off!

'Taking the credit risk of granting an unauthorised overdraft'!! WTF....that sentence in itself is stupid and baffles me.

Mr Banker: 'Ah yes, you don't have the money to cover this DD so I think the sensible thing to do is refuse the Direct Debit so that you do not go overdrawn. Because we've done that though it will cost £30+ in charges.....oh wait, you don't have any money as this is why you've been charged in the first place. Hmmm, common sense here says that you are a risk. The sensible thing here would be not to grant any type of credit, most definitely an unauthorised overdraft as it's plain to see you would not be able to afford this currently.....but this leaves me with a problem - we must as a bank get our money.....ah, WTF do I know? Yes, I think in this case Mr Smith that we can risk granting you an UA overdraft' [Laughs Evilly]

BUT....here's where that statement is even more bizarre. THERE IS NO MR BANKER! just an automated system.

What stupid monkey faced idiotic willy headed twits!!!!!!!!!!!!!!

[showergirl]

So if they do appeal then it is unlikely that we will see any money untill next year?
You got it in one.

[rosymaria]

I understand and share your frustration folks - really I do!

But please look at Bankwhackers post at #6 - no-one has a better understanding of this case than him - so I for one trust his judgement!
Chin up - whilst not brilliant news its not entirely unexpected!

[Ladidi]

I agree the speculated outcome may not be what we want or what we get.
I also agree that it would unfair to ask consumers to keep paying their so called charges as well. I think in all fairness,the judge should make a sentence in tomorrows judgements - to all those representing the banks! IF you decide to appeal all outcomes, I also suggest that when we return each and everyone of you reveal your TRUE COSTS in dealing with each type of transaction on a customers account!!!
That way we will all be able to see what is fair and what is not and if your grounds of appeal were justified!!!

[slim shady123]

what happened to regardless of any appeals the waiver must be lifted !

[rosymaria]

ay?? - where was that published then?

[slim shady123]

also i think if judgment goes and they appeal and they make no waiver lift i for 1 will think about quitting my job for a few months get another 1 after i get a hearing on a harship case because i would then be on benifits i think £4000 would be worth it !

[rosymaria]

Even as a hardship case you are in the lap of the gods - they may still not lift the stay!

[slim shady123]

they actually have to deal with hardship cases !

[rosymaria]

errrr - no they dont!!

[BankWhacker]

they actually have to deal with hardship cases !

rosymaria is quite right I'm afraid. 'Dealing with hardship clases' can mean just giving you the number of your local CAB.

[There_is_another_way]

Just a thought, but................... The judge has said that the charges are not penalties, what they are then I am not quite sure . Now what if the banks appeal against this ruling and that statement was overturned?

In this case, have the banks got a lot more to lose if they do appeal?

[showergirl]

I agree the speculated outcome may not be what we want or what we get.
I also agree that it would unfair to ask consumers to keep paying their so called charges as well. I think in all fairness,the judge should make a sentence in tomorrows judgements - to all those representing the banks! IF you decide to appeal all outcomes, I also suggest that when we return each and everyone of you reveal your TRUE COSTS in dealing with each type of transaction on a customers account!!!
That way we will all be able to see what is fair and what is not and if your grounds of appeal were justified!!!
I agree with you. I am totally peeved off with the news today. When the banks do appeal they must be made to reveal the true costs .This should be done tomorrow so their argument is valid. If this is a delaying tactic by the banks (which i think it is) the FSA should lift the waiver and let people claim their money back. Otherwise this is going to go on longer after the 12 month deadline for the waiver. i just hope the woman from the BBA can sleep at night.

[Weemonk]

Wasn't the waiver agreed by the OFT with the banks? Do they not then have the power to lift it? why's it up to the judge?

[Sim]

The waiver of complaint handling was from the FSA - the courts applied the stays and is only them that can lift them.

[There_is_another_way]

Wasn't the waiver agreed by the OFT with the banks? Do they not then have the power to lift it? why's it up to the judge?

too late already answered:D

[Weemonk]

Grrrrr......ah well, we've waited this long.

I'm gonna go after my credit card companies again in the meantime to keep me busy :)

[BankWhacker]

Just a thought, but................... The judge has said that the charges are not penalties, what they are then I am not quite sure . Now what if the banks appeal against this ruling and that statement was overturned?

In this case, have the banks got a lot more to lose if they do appeal?

No, despite what you might read on some less informed sites that I could mention.

''Unsurprisingly for such a complex case, the banks will not be able to appeal the entire judgment wholesale, but only individual clauses they disagree with.''

http://www.thisismoney.co.uk/campaigns/bankcharges/article.html?in_article_id=441754&in_page_id=507

[There_is_another_way]

No, despite what you might read on some less informed sites that I could mention.

''Unsurprisingly for such a complex case, the banks will not be able to appeal the entire judgment wholesale, but only individual clauses they disagree with.''

http://www.thisismoney.co.uk/campaigns/bankcharges/article.html?in_article_id=441754&in_page_id=507
Does that then not allow the OFT to appeal against what they disagree with?

Goose and Gander spring to mind

[BankWhacker]

See post #6

[There_is_another_way]

That is my point. Banks say Ok we'll accept the verdict- next stage
But if they appeal the OFT should appeal against the penalty thing

Will the banks want to risk that?

[BankWhacker]

That is my point. Banks say Ok we'll accept the verdict- next stage
But if they appeal the OFT should appeal against the penalty thing

Will the banks want to risk that?

Sorry, I don't understand. Why would the OFT want to appeal against the penalty judgment if the banks appealed against the UTCCR ruling?

And why would the OFT want to appeal the penalty decision anyway when it wasn't even in their original POCs?

The OFT are not interested in the penalty ruling on current T&Cs. The UTCCR ruling is far more valuable.

[Ladidi]

I think in all fairness, we are all going to drive ourselves nuts with speculation and wishful thinking.
At the end of the day, it doesn't matter what you or I think or say. It's all going to be down the all people in the court room tomorrow and most probably Friday, We never know depending on what is said it may end tomorrow or even Firday and can even go on as long into Tuesday after the bank holiday.
At this moment in times it's a case of WHO KNOWS!!

I would like it to go the way we want it too, same as everyone else here. God I would love to have my £6k and some back within 10 days of the outcome or even if they appeal at least lift the stays off those already in the courts system and let us have them all in court as before where the banks have bottled out because it is not in their interests to reveal what it really costs them to run our accounts, but we believe it is in ours when it comes to them helping themselves to our hard earned money.

I also believe if the banks are found to be appealing and their appeal is nonsense they should be heavily fined for wasting the courts time, just the same way as we would be.

Final message to the judge, should the banks appeal, lift all current stays, pleeeeeeease <£

[BankWhacker]

It looks like we'll have to wait a bit longer for the publication of the OFT's Personal Current Account investigation which , I believe, will include their decision on the assessment of fairness under UTCCR.

They will however be publishing the market study in a few weeks which should give us some indication of the status of the PCA investigation.


----- Original Message -----
From: Kate Farrow OFT
To: EXC

Sent: Wednesday, May 21, 2008 1:40 PM
Subject: RE: PCAI


I am currently drafting an update to the Q&As to include information about what the CMC will cover.

A news notice and further Q&A update will be published post CMC once we have had time to absorb the information from it.

We are also aiming to publish our second stakeholder newsletter in a few weeks to coincide with the publication of the market study and associated remedies consultation document, and I expect we'll have more to say at that point with regards to the way forward with the investigation.

Kind regards

Kate

[lealea]

so that means that tommorrow is not d day??? so when should we expect to hear????????????

[Ladidi]

How does in time for the next millenium sound?????

On a serious note, We'll when they are ready to tell us they have had enough and time to put it all to bed once and for all, but not before they can secure at least of some of the money they are used to receiveing, they are not going to give up ££££££££££ without a fight!!

Secondly in the meant time they are more than happy to keep taking what they believe is theirs and not ours..so they say <£ to next board meeting and our bonuses.

[un1boy]

Does anyone know how I would go about entering legal action to get an injunction against the banks so that they cannot take the charges until the case has finished?

I know the FSA said they dont have the power to do this, but, how are they protecting consumers (like they should be) by giving the banks carte blanche to charge us and give us no recourse - they should have at least come to an agreement like, "For those banks that cease charging, we will grant a waiver - for those that don't, we won't" but then I suppose as the banks are their sharholders I guess they have no other choice?

[editorholte]

There's a precedent against interim relief.

[lealea]

thanks for reply but i still dont see what is taking so long for the judge to see that the banks are bloody wrong and acting like the baddie from robin hood ( cant remember his name!!!!!) they should just give us our money and be done with it cos none of us will give up without a fight!!!!!!!

[slim shady123]

could the judge not ask the fsa manager and the banks managers to hold there breath under water indefinatly or till after the test case !

[Disco Dave]

the baddie from robin hood ( cant remember his name!!!!!)

The Sherriff of Nottingam

;-)

[lealea]

thats the one!!!!! lol

[un1boy]

There's a precedent against interim relief.

Holte, can you please explain what you mean by "interim relief?"

Sorry if I'm being a bit thick! :)

[bantambec]

just hope the woman from the BBA can sleep at night.

Of course she can, she has no money worries does she! LOL

Does anyone know how historical the T&C's are that the judge is currently looking at? ie before they were all rewritten?

[ChrisJDenman]

Because banks now have time to get their data together, ALL bank charge issues are on hold.

On my last statement I had &#163;165 of charges - I missed ONE &#163;24 standing order after getting marries and giggling my bills around to a new joint account.

In the old days obvious errors were reversed. Now instead you get "sorry, hands are tied, write to...., don't shoot the messenger" and so on.

So, being a programmer, I have made a "Build Your Own Revenge" website here: - this is my rant page. To make your own for free visit - fill out a simple rant form and you will end up with your very own rant website for the whole world to see!

Enjoy!

Chris J Denman

[bigboab5]

Analysts say this could cost the banks £10bn in lost revenue, potentially forcing them to impose surcharges on services such as ATM withdrawals and cheque-cashing to make up the shortfall.


I am sure someone has said this before... BUT...... If the banks are only charging what it costs, then how come they are losing revenue? Tee hee!!