• Welcome to the LegalBeagles Consumer and Legal Forum.
    Please Register to get the most out of the forum. Registration is free and only needs a username and email address.
    REGISTER
    Please do not post your full name, reference numbers or any identifiable details on the forum.

Beagles formal response to OFT PCA Market Study Consultation Nov 2008

Collapse
Loading...
This thread is closed.
X
Important !
X
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Beagles formal response to OFT PCA Market Study Consultation Nov 2008

    Legal Beagles Response to the OFT PCA Market Study - November 2008

    For full version see PDF Legal Beagles

    For the consultation documents see The Office of Fair Trading: Market study into personal current accounts


    ---------------------------------------------------------------------------------------------------
    Executive Summary

    The personal current account may well be a cornerstone of Britain’s retail financial
    system, but for the vast majority of adults it means far more than that: it is a central
    and essential component of 21st century life. PCAs are the gateway into the economy
    for much of Britain’s household consumption. PCAs allow for the regular payment of
    rent or a mortgage, utility bills, food, clothing, and a myriad of other essentials that are
    integral to modern life. The PCA represents the economic infrastructure by which our
    work, wages and savings are recycled into the economy.

    In this respect, we believe that the PCA is an essential utility and not merely a service.
    Whilst banks continue to operate PCAs on a purely commercial and highly profitable
    basis, it represents a failure by the banks, the government and the regulators to fully
    appreciate the nature of the PCA as an essential component of our national economic
    infrastructure. Given the historic failures within the banking system to address
    concerns over competition and consumer protection, it is apparent that purely
    commercial interests cannot be left to dictate the future direction of the PCA.

    In March 2000, the Cruickshank Report1 concluded that:
    • consumers perceive significant barriers to switching current accounts;
    • few consumers are aware of the terms and conditions of the products they hold,
    pointing to significant information problems;
    • consumers have inadequate representation and redress.

    Several recommendations were made in respect of addressing these failings within the
    UK banking industry. Just twelve months later, however, the Treasury Select
    Committee in their Fifth Report of 2001: Banking and the Consumer, stated:
    “We believe that very easy transfer of current accounts between banks is
    essential to ensuring increased competition in personal banking services. We
    believe that the major retail banks' efforts to achieving this aim in the twelve
    months since Cruickshank's recommendation on this point have been
    disappointingly slow.”

    The Committee report also raised concerns about the cross-subsidy and the
    transparency of charges:
    “An issue which arose in connection with payment systems, and also more
    generally, was the extent to which different banking activities are crosssubsidised,
    or more generally the relation between the cost to banks of a
    particular service and the charges made to customers. The NCC, for example,
    pointed out that banks were absorbing the transaction costs for personal
    customers (cash withdrawals and others) by paying very low interest rates (or
    none at all) on current account balances and by their overdraft charges…”2

    Eight years on from the Cruickshank report and the conclusions of the OFT market
    study indicate that little, if any, progress has been made within the UK banking
    industry. Although the account transfer processes of some banks have generally been
    improved, the remaining issues have not been addressed.

    Whilst we support the objectives of the current market study and the ongoing Test
    Case proceedings, we have serious concerns over the amount of time it has taken for
    such action to be forthcoming. It was only after tens of thousands of county court
    claims and complaints about insufficient fund charges, alongside high-profile media
    coverage, that the OFT and the FSA contemplated any formal action against the banks
    in respect of these charges. Even now, with a provisional finding by the OFT that
    these insufficient fund charges are unfair, the banks are continuing to impose these
    charges with impunity.

    It appears to us, despite years of pressure from the government and regulatory bodies,
    that the banks are unwilling to voluntarily implement the essential changes to the PCA
    that are required to ensure proper competition and the fair treatment of consumers.
    For the reasons set out in this formal response, we are of the opinion that the time for
    self-regulation has long since passed. At a time when confidence in the UK banking
    industry is at an all-time low, endemic failures within the industry must be rectified
    through strict independent regulation combined with greater transparency.

    Although the lack of competition, unfair commercial practices and inadequate
    consumer redress should be dealt with on their own merit, the political reality of the
    recent publicly-funded rescue package cannot be ignored. With £39billion of public
    funds invested in this national economic infrastructure, the tax-paying consumer is
    entitled to expect more from our banks.

    We believe that recent events have granted the OFT a great deal political and moral
    authority. There will be no better opportunity for the OFT to ensure a fairer deal for
    consumers.



    1 Competition in UK Banking: A Report to the Chancellor of the Exchequer, 20 March 2000
    2 At paragraph 42 of the Report; see
    http://www.parliament.the-stationery.../13804.htm#a13





    continues in next post - you will need to be registered to read (registration is free and only takes a minute )
    Last edited by Amethyst; 28th May 2009, 17:31:PM.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

  • #2
    Re: Beagles response to PCA report (OFT)

    Introduction to Legal Beagles

    1.1. Legal Beagles welcomes the opportunity to respond to the Office of Fair Trading’s
    consultation paper - Personal current accounts in the UK – an OFT market study.

    1.2. We are a free-to-join internet forum offering help, support and advice to the general
    public who have issues involving consumer rights. Legal Beagles was formed and went
    live in May 2007. We have a rapidly increasing membership and currently have just over
    2000 registered users of which almost 50% are active during any month, plus a daily
    viewing of over 800 non registered guests. High proportions of our registered users are
    currently reclaiming or have previously reclaimed bank overdraft or credit card fees. We
    work closely with many other similar forums, sharing information and discussing issues.
    Consumers are often directed between consumer sites to where there may be more
    specialist advice suitable to their needs. As we are accessible 24 hours a day every day
    of the year, we can provide real time help for people that need one-on -one support and
    advice over the many consumer issues that arise from day to day. Through helping
    consumers with difficulties in the main attributed to the financial services industry, a
    strong community spirit has formed and is very much a feature of our site.

    1.3. Legal Beagles is owned by two private individuals, has two principle administrators,
    and has a moderating team of seven. We are funded by donations from private individuals.

    What we do
    1.4. Our aim is to inform consumers of their rights and protection under the law and assist
    them in any way we can towards a fair and just resolution to their problems. Consumers
    look to us to provide valuable information and knowledge in many different situations
    they may encounter. Much of our work is in assisting people on low incomes who are
    suffering genuine hardship as a result of financial difficulties that have arisen through
    the unfair practices carried out by the various financial institutions.

    1.5. Legal Beagles takes a holistic approach to debt and try to assist people by not just
    dealing with the immediate concern, but by encouraging people to prevent problems
    reoccurring at a later date.

    1.6. We are committed to making consumers more aware of their consumer rights and the
    protection they can receive from the law and various organisations such as the OFT,
    FSA, FOS, and ICO etc. We strive to help people have a greater sense of responsibility
    for their own actions and by doing this we can actively campaign for the fair treatment
    of consumers taking into account both consumers and service providers.

    1.7. We fully support the OFT in their efforts in representing consumers in the current test
    case with the Banks, and always have representatives at the court hearings who provide
    daily reports on the proceedings and make available court transcripts to our members.
    Legal Beagles has become a primary source of information about the test case for
    consumers, law firms and the media.

    1.8. Legal Beagles is active in co-ordinating and funding legal representation for particularly
    severe hardship cases in providing the services of law firms and barristers.


    Issues we deal with
    1.9. As personal current accounts are one of the main area of concern at present, especially
    with the ongoing test case, we have ensured that not only do our users receive up to the
    minute reports, they also receive a comprehensive explanation of the direct
    consequences to them and how it affects the many claims that are at present stayed as a
    result of the test case in conjunction with the terms of the FSA waiver. We also assist in
    recognising genuine hardship candidates that should be dealt with under the exemptions
    of that waiver.

    1.10. Currently we have users who are dealing with issues arising from bank current accounts, business accounts, credit card accounts, secured and unsecured loans, mortgage lenders, Payment Protection Insurance, utility suppliers, telecoms providers, Government benefit payments, and various other consumer issues.

    1.11. Legal Beagles and its members are therefore grateful for the opportunity to contribute to this consultation process.
    #staysafestayhome

    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

    Received a Court Claim? Read >>>>> First Steps

    Comment


    • #3
      Re: Beagles response to PCA report (OFT)

      Personal Current Accounts

      Introduction
      2.1. The personal current account may well be a cornerstone of Britain’s retail financial
      system, but for the vast majority of consumers it means far more than that: it is a
      central and essential component of 21st century life. PCAs are the gateway into the
      economy for much of Britain’s household consumption. PCAs allow for the regular
      payment of a mortgage or rent, utility bills, food, clothing, and a myriad of other
      essentials that are integral to modern life. The PCA represents the economic
      infrastructure by which our work, wages and savings are recycled into the economy.
      The Personal current Account (PCA)

      2.2. We believe that the PCA is an essential utility and not merely a service. It is not just
      an essential tool for consumers: its function and utility underpins the smooth
      functioning of the UK economy as a whole. The PCA is an essential component of
      the economic infrastructure of the country. This is one of the reasons why
      governments around the world refuse to contemplate the collapse of major retail
      banking institutions, and why unprecedented levels of public funds have been used to
      shore up the banking system in Britain and elsewhere. High street banks are unique
      in this position amongst British companies, and we believe that such use of public
      funding should not come without obligation: the historic failings within the market
      must be addressed.

      2.3. Although the lack of competition, unfair commercial practices and inadequate
      consumer redress should be dealt with on their own merit, the political reality of the
      recent publicly-funded rescue package cannot be ignored. We believe that recent
      events have granted the OFT the political and moral authority to impose a fairer
      settlement for consumers.

      Free-if-in-credit pricing model
      2.4. The free-if-in-credit model is the standard pricing model offered by UK banks, and it
      is fair to say that such “free banking” is taken for granted by UK consumers.
      However, as highlighted by the market study, we believe that this pricing model is
      anything but “free”.

      2.5. The market study highlights two ways in which the use of the “free banking” title is
      something of a misnomer: first through “interest foregone”, and second through the
      imposition of insufficient fund charges.

      Sub-inflation interest
      2.6. Although consumers do miss out on higher rates of interest by keeping funds in their
      PCA rather than accounts with a higher interest rate, we would assert that “interest
      foregone” is understating the reality of the situation. Interest rates for PCAs provided
      by the four established banks averages less than 0.5%, and in our experience
      consumers do not appreciate that this represents in real terms an annual depreciation
      in the value of their credit balance, since inflation has historically been four or five
      times higher than the interest rates offered by most UK banks. Due to the fluctuating
      nature of amounts held in PCAs, it is unsurprising that consumers do not appreciate
      the long-term cost of a sub-inflation interest rate. Although the amounts lost through
      sub-inflation interest may be comparatively small for individuals, we believe that
      consumers as a whole are losing out to a significant degree.

      Profitable nature of PCAs
      2.7. When coupled with relatively high levels of interest charged for any arranged or
      unarranged overdraft facility, it comes as no surprise to us that revenue generated
      from PCAs was in excess of £4billion for 2006. It is clear from these figures, along
      with record profits posted by UK banks in recent years3, that PCAs are a highly
      profitable endeavour for UK banks, even without taking account of insufficient fund
      charges and sales of additional services for which the PCA acts as a gateway.
      Insufficient fund charges

      2.8. Of greater concern to us is the fact that insufficient funds charges are being viewed
      by the banks as a legitimate means of increasing profits: £2.6billion from these
      charges in 2006 alone. Our experience reflects the responses set out in the market
      study: consumers are not sufficiently informed of exactly when and how these
      charges might be applied.

      2.9. It is also our experience that it is often the most vulnerable consumers who
      frequently pay the greatest level of charges. This is in part due to the vicious cycle
      of debt that these charges often create for those on low incomes, particularly
      individuals and families reliant on benefits and pensions. Even a single charge can
      be enough to disrupt a tight budget, as these charges often trigger additional charges,
      pushing these vulnerable individuals further and further into debt (referred to as the
      “snowball effect”).

      2.10. It is the government’s stated policy to make all payments of social security directly
      to a bank account or post office account by 2010. Whilst legislation4 is in place
      which prohibits the assignment of, or charges on, benefits or pensions, due to the
      mechanism of direct payments into bank accounts, the banks are not restricted by this
      legislation. Although any other company would be prohibited from making any
      deductions from social security and pension payments before they reach the
      recipient, we have specific examples of the banks stripping away the entirety of an
      individual’s weekly benefit or pension, leaving them without any monies to meet the
      basic needs of either themselves or their families. This results in the banks having a
      higher priority over the benefits than the recipient or any other creditor. This goes
      entirely against the spirit and purpose of the legislation designed to protect such
      vulnerable individuals. We consider it unacceptable that individuals in financial
      difficulty are forced to pay non-priority debts to their bank when they have more
      pressing priority debts and basic needs to meet. We urge the OFT to find a regulatory
      route to prevent such essential benefits and pensions being deducted prior to being
      accessible to the recipient. Advance notice of such charges, as opposed to immediate
      deductions, would be one possible solution. This would give the recipient of these
      benefits the opportunity to make alternative arrangements for future payments to
      ensure they can meet essential purchases and payments rather then pay
      disproportionate charges to their bank. The OFT will no doubt wish to consult with
      the Department for Work and Pensions on this issue.

      2.11. We have also dealt with specific cases where these charges have been a significant
      contributing factor in the bankruptcy of individuals and the repossession of family
      homes. The fact that this continues to be the case even after the instigation of the test
      case and the grant of the FSA waiver is of particular concern to us. Our experience
      is that the lack of consumer redress identified in the Cruickshank Report has not been
      addressed in any meaningful way.

      2.12. Although no formal legal ruling has been reached on the issue of the lawfulness of
      these insufficient funds charges, we hold the view that these charges are clearly
      unlawful. In the test case judgment of Smith J., it was ruled that these charges are
      subject to the Unfair Terms in Consumer Contract Regulations 1999, and since this
      ruling was following the policy decision of the House of Lords in Director General
      of Fair Trading v. First National Bank plc,5 the decision of Smith J. is very unlikely
      to be overturned.

      2.13. Since that ruling by Smith J., the OFT has written to each bank to inform them that
      following on from their year-long investigation into these charges, the OFT has
      reached the provisional view that these charges are unfair. Given this extensive
      investigation into these charges, and the previous “threshold” of £12 set by the OFT
      in respect of credit card charges6, it appears that the banks’ current charges of up to
      £38 are manifestly excessive.

      2.14. The legal ruling in the test case, combined with the OFT’s preliminary findings that
      these charges are unfair, merely confirms what the majority of consumers have
      known for many years: insufficient fund charges do not reflect the actual cost to the
      banks and they are used primarily as a profit-making tool. The presumption must be
      that these charges are unfair and therefore unlawful unless and until a court rules
      otherwise.

      2.15. It is not, in our view, acceptable to allow the banks to continue imposing unlawful
      charges whilst preventing any form of consumer redress through the courts or the
      banks’ own complaints procedure. At the very least, interim injunctive relief should
      have been sought, or should be sought immediately, to prevent the continued use of
      these unfair terms.

      2.16. Under Article 7 of EC Directive on Unfair Terms in consumer Contracts7:
      1. Member States shall ensure that, in the interests of consumers and of
      competitors, adequate and effective means exist to prevent the continued
      use of unfair terms in contracts concluded with consumers by sellers or
      suppliers.
      (Emphasis supplied)

      2.17. In our view, allowing the banks to continue imposing such manifestly unfair
      charges whilst preventing any form of consumer redress falls far short of the
      statutory duty on the OFT to ensure that “adequate and effective means exist to
      prevent the continues use of unfair terms”. On the contrary, many consumers
      have reached the conclusion that the OFT and the FSA are allowing unfair terms
      to be used against them, whilst preventing those consumers from taking any
      action themselves. This prevailing view, with which we hold some sympathy, has
      seriously undermined consumer confidence in the desire or the ability of the OFT
      or the FSA to give adequate protection to consumers. In our experience,
      consumers are particularly frustrated at the apparent bias in favour of the banks
      by the regulators in enforcing and entrenching this unfair status quo.

      2.18. Article 7 of the Directive goes on to state that:
      2. The means referred to in paragraph 1 shall include provisions whereby
      persons or organizations, having a legitimate interest under national law in
      protecting consumers, may take action according to the national law
      concerned before the courts or before competent administrative bodies for
      a decision as to whether contractual terms drawn up for general use are
      unfair, so that they can apply appropriate and effective means to prevent the
      continued use of such terms.
      (Emphasis supplied)

      2.19. In our view, the OFT is the competent administrative body which is mandated to
      reach decisions as to whether terms are unfair. There are not, in our view, any
      legitimate grounds for awaiting a determination from a court that these charges are
      unfair before seeking interim injunctive relief against the continued use of these
      unfair charges. Having reached the obvious, albeit provisional, conclusion that these
      charges are unfair, we are of the view that the OFT is failing to discharge its statutory
      duties if it does not seek such interim injunctive relief. It is not, in our view,
      acceptable to allow the test case proceedings to drag on for another 12 to 18 months
      whilst allowing the banks to continue imposing these charges.


      3 UK banks made profits in excess of £37billion in 2006 and £40billion in 2007.
      4 Such as the Administration of Social Security Act 1992
      95 [2001] UKHL 52
      6 See the OFT Report Calculating fair default charges in credit card contracts April 2006,
      http://www.oft.gov.uk/shared_oft/rep...cts/oft842.pdf
      7 Council Directive 93/13/EEC
      #staysafestayhome

      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

      Received a Court Claim? Read >>>>> First Steps

      Comment


      • #4
        Re: Beagles response to PCA report (OFT)

        Hardship Cases

        2.20. Our experience is that the banks are failing to apply the hardship principles under the
        FSA waiver with any consistency. We have evidence of banks repeatedly seeking to
        recover debts which are made up entirely of insufficient fund charges, even though
        the consumer has been recognised as being in hardship, and even though the
        consumer in question has already brought legal proceedings, which have been stayed,
        against their bank. Consumers are consequentially receiving markers on their files
        with Credit Reference Agencies, creating difficulties with organising their finances.

        2.21. Although we appreciate that this is strictly a matter for the FSA in this instance, it is
        further evidence the banks failing to treat consumers fairly, which further underlines
        the need for effective regulation in this area.

        Banks’ response to the OFT investigation and test case

        2.22. After the instigation of the OFT investigation into insufficient fund charges, the
        banks claimed that any challenge to the current use and level of such charges would
        result in the loss of “free banking” in the UK. Comparisons were drawn with other
        countries and the banking models and charges imposed in those countries.

        2.23. We do not believe that these claims hold up to any proper scrutiny. As has already
        been established, there is no such thing as “free banking” in the UK, primarily due to
        uncompetitive interest rates which are linked to PCAs.

        2.24. Furthermore, claims by the banking industry that this would bring about the end of
        the “free-if-in-credit” model in the UK only serves to underline the inherent
        unfairness of insufficient fund charges. Since only 23% of PCAs incurred these
        charges, this is an admission that there is significant cross-subsidy from those
        accounts that do incur charges to the remaining 77% of accounts that do not. Our
        experiences and the facts set out in the market study demonstrate that it is often the
        most vulnerable or “financially constrained” who bear the brunt of these charges. In
        those circumstances, the most vulnerable consumers are being expected to subsidise
        the remaining consumers for the use of an essential utility: the PCA.

        2.25. In any event, we do not accept that a reduction in the level and incidence of these
        charges will bring about the end of free-if-in-credit banking. As was highlighted
        above, the PCA is of itself a profitable venture for the banks, generating £4billion
        revenue for the banks in 2006. In our opinion, it is the banks’ pursuit of
        unprecedented profits that has driven up the level and incidence of these charges. As
        highlighted in the market study, the level of charges have consistently increased over
        the years, even though the actual costs to the banks has probably decreased through
        the increased use of computer automation and advances in such technology.

        2.26. Furthermore, when choosing any comparisons with other banking models, it is
        essential to draw comparisons with models that are closely aligned to those used in
        the UK.
        #staysafestayhome

        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

        Received a Court Claim? Read >>>>> First Steps

        Comment


        • #5
          Re: Beagles response to PCA report (OFT)

          Comparisons with Republic of Ireland

          2.27. There have been historically close ties between the financial systems and financial
          institutions of the Republic of Ireland and the United Kingdom. Even after formal
          independence in 1922, the Republic of Ireland continued to use the UK currency.
          The Saorstát Pound (Free State Pound) introduced by the Currency Act 1927 was
          intended to maintain parity with the British Pound Sterling. It was not until
          December 1978, with the Republic’s entry into the European Monetary System, that
          parity with the British Pound was broken, and even then 50% of the Republic’s trade
          remained with the UK. Even today, the Bank of Ireland (not to be confused with the
          Central Bank of Ireland) retains Sterling note-issuing rights in the United Kingdom.

          2.28. Due to the intertwined history of the Republic of Ireland and the UK, and the
          similarities and shared history of their respective financial institutions, the pricing
          models used in the Republic of Ireland are the most appropriate comparisons to use
          when considering the impact of any structural changes to pricing models in the UK.

          2.29. There are four dominant banks in the Republic of Ireland: Allied Irish Banks plc,
          Bank of Ireland, Ulster Bank and the National Irish Bank. We shall be drawing on
          the first three banks only, as the National Irish Bank has a variety of different
          standard accounts, some with an annual fee but improved rates of interest, some with
          no fee but reduced rates of interest. Their charging leaflets for insufficient funds
          charges are also not readily available.

          Ulster Bank
          2.30. This is probably the most useful comparison between the UK pricing model and one
          used in a foreign jurisdiction, as Ulster Bank is owned by Royal Bank of Scotland
          Group. A full breakdown of Ulster Bank’s fees are available online8, but the main
          points have been summarised below:

          Ulster Bank
          Interest on credit: 0.55%
          Interest on overdraft: 15.05%
          Account maintenance fees: none
          Insufficient funds charges:
          • Unpaid item fee €12.70 (£10.67) (compared to £38 for RBS
          customers in the UK)
          • Daily fee of €4.44 (£3.73) for when you are over your limit
          (compared with a £28 monthly fee for RBS customers in the UK).



          Allied Irish Banks plc
          2.31. A full breakdown of AIB’s fees are available online9, but the main points have been
          summarised below:
          9http://www.aib.ie/servlet/BlobServer?blobcol=urldata&blobtable=MungoBlobs&bl obkey=id&blobwhere=1214
          392284474&blobheader=application%2Fpdf
          Allied Irish Banks plc
          Interest on credit: 0.5%
          Interest on overdraft: 14.22%, although there is a fee of €25.39 (£21.33) per
          annum to set up and maintain the overdraft facility.
          Account maintenance fees of €4.50 (£3.78) per quarter, along with transaction fees
          of €0.20 (£0.17p) for automated/self service transactions and €0.30 (£0.25p) for
          paper/staff assisted transactions. However, these account maintenance fees do not
          apply to students, graduates or people over 60. Furthermore, customers who hold an
          AIB Debit Card and are registered for AIB Phone & Internet Banking can qualify
          for free maintenance and transaction banking on that account completing at least
          one purchase transaction using their AIB Debit Card in each fee quarter and at least
          one debit transaction using AIB Phone & Internet Banking in each fee quarter.
          Given the above exemptions and the ease and frequency with which such
          transactions are carried out, we can only assume that the numbers of customers who
          actually pay these fees are in the minority.
          Insufficient funds charges: Cheque, direct debit or standing order presented on
          your account and returned unpaid €10.00 (£8.40)

          Bank of Ireland
          2.32. A full breakdown of Bank of Ireland’s fees are available online10, but the main points
          have been summarised below:

          2.33. As can be seen from the figures above, in comparison to the established banks in the
          UK, interest paid on PCAs is on average higher in the Republic of Ireland, the
          interest charged on overdrafts is lower, and the insufficient funds charges are
          significantly lower – even the highest charges are about one third of what they are in
          the UK.

          2.34. Although two out of the three banks cited do have a quarterly charge and a per
          transaction charge, certain customers are automatically exempt, and regular
          customers can easily avoid these charges in their entirety by using their debit card
          and online banking 3 times per quarter.

          Bank of Ireland
          Interest on credit: 3.0% (up to €1500)
          Interest on overdraft: 14.5%, including overdraft facility fee.
          Account maintenance fees €0.28c (£0.24p) per transaction or €0.13c (£0.11p)
          each if bought in bulk, with students and over 60s exempt. Again no transaction
          fees if the consumer keeps a minimum credit balance of €500 in the current
          account for the full fee quarter, or makes at least 3 debit payments from the
          current account using Bank of Ireland 365 online and / or phone in that quarter
          Insufficient funds charges
          • First over limit item per quarter No Charge
          • 2nd and 3rd items per quarter €3.50 (£2.94) each
          • 4th and 5th items per quarter €5.00 (£4.20) each
          • 6th and subsequent items per quarter €10.00 (£8.40) each
          Cheque/DD/SO returned unpaid from your account €12.70 (£10.67) each

          2.35. In all respects, it appears that the Republic or Ireland has a banking model that is
          much more favourable towards consumers than the standard model used in the UK.
          And most telling is that the RBS subsidiary in the Republic uses a free-if-in-credit
          model, maintains better rates of interest, and imposes insufficient fund charges that
          are roughly a quarter of the cost of those imposed in the UK. We take this as further
          evidence of the cavalier approach of the UK banks in their pursuit of profits and the
          poor deal that UK consumers receive.

          2.36. This evidence demonstrates that more reasonable levels for insufficient fund charges
          do not necessarily mean the end of the free-if-in-credit model. We suspect that such
          claims made by the banks and the British Bankers’ Association are entirely
          disingenuous, and are simply an attempt undermine public support for an end to such
          high levels of charging.

          2.37. In any event, the majority of our members have indicated that modest transaction
          fees or periodic charges would be acceptable to them, provided it gave rise to more
          competitive rates of interest and insufficient funds charges that reflected the actual
          cost to the banks.

          2.38. In our opinion, the OFT should not be deterred in pursuing fair insufficient funds
          charges for UK consumers, despite disingenuous claims by the banking industry.
          Neither should the OFT be overly concerned by any potential consumer backlash
          over modest periodic charges or transaction fees for bank customers provided PCAs
          provided real value for money and the issues of cross-subsidy and disproportionate
          insufficient funds charges were remedied by effective regulation. We believe that
          this would lead to greater transparency of the real cost of banking in the UK, which
          would lead to greater competition, and would result in higher switching rates by
          consumers.

          2.39. Aside from the issues of unfairness, transparency and cross-subsidy, we would
          consider it unacceptable if UK banks were to continue to reap such high levels of
          profits from consumers for what is an essential utility, particularly when
          extraordinary levels of public funding has been used to maintain the integrity of the
          banking system.


          8http://www.ulsterbank.ie/content/ri/personal/downloads/Personal_fees_and_interest.pdf
          10http://www.bankofireland.ie/includes/personal/pdfs/fees_charges_010708.pdf
          #staysafestayhome

          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

          Received a Court Claim? Read >>>>> First Steps

          Comment


          • #6
            Re: Beagles response to PCA report (OFT)

            Supply of Personal current Accounts

            3.1. We agree with the OFT’s conclusion that the market may be stuck in an equilibrium
            that does not work well for many consumers. We appreciate that there are significant
            barriers hindering entry into the market for new providers and any expansion by
            current providers, particularly the “challenger” banks.

            3.2. However, this is all the more reason to ensure that mergers or takeovers are placed
            under greater scrutiny. Notwithstanding the current financial crisis, we were
            disappointed at the approval of the acquisition of HBOS by Lloyds TSB. This will
            result in the number of accounts operated by the largest “challenger” bank being
            subsumed within the market share of the established banks. The market will therefore
            move from a 65% stake for the established banks to a 79% stake in terms of numbers
            of customers.

            3.3. It is the case, particularly with reference to the takeover of National Westminster Bank
            by Royal Bank of Scotland, that the fees and charging structures of the smaller bank
            align themselves with that of the purchasing bank. In the context of HBOS and
            Lloyds TSB, this cannot be considered a healthy move for the market which is already
            stifled through a lack of “challenger” competition to the dominance of the established
            banks. We anticipate the fee structure of HBOS will, in time, fall in line with that of
            Lloyds TSB, which we consider to be less favourable to consumers, particularly since
            HBOS has, in recent years, offered one of the highest interest rates for credit balances.
            We have legitimate concerns that the attractive offers provided by HBOS will
            disappear with time. In the current economic climate, we are concerned that
            subsequent mergers or acquisitions may be approved which will further undermine
            competition within the market.

            3.4. In our experience, consumer inertia can also be attributed to another factor: low
            expectations. Many consumers are of the opinion that switching banks will be of little
            benefit to them, as competitors do not offer better products or better returns. There is
            the perception, with which we hold some sympathy, that “the banks are all as bad as
            each other”. This is in part a reflection of the negative publicity that the banks have
            received due to insufficient funds charges, but primarily due to the longstanding
            problem of inadequate consumer redress. The recent financial crisis, when combined
            with unprecedented bank profits and staff bonuses of recent years, has lead to
            extraordinarily low levels of trust in the banks. In light of recent events, the
            allegations of profiteering by the banks have been very difficult to refute.

            3.5. In our view, effective regulation and fair treatment of consumers is required to restore
            consumer confidence in our banking institutions and their regulators.
            #staysafestayhome

            Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

            Received a Court Claim? Read >>>>> First Steps

            Comment


            • #7
              Re: Beagles response to PCA report (OFT)

              Consumers' use and awareness of their current accounts

              4.1. As part of our response to the OFT market study, we asked our members what
              facilities and options they would like to see within their PCA, and what aspects would
              make their “perfect bank account”.

              4.2. The responses have been summarised below:
              • Charges to be proportional and fair;
              • Higher interest rate on unauthorised borrowing limited to just the unauthorised
              amount, not the entire overdraft (this issue currently affects Abbey customers);
              • Better customer service and consumer redress, with a less sales-driven approach to
              consumer contact;
              • Any overdraft limit should be a limit not a guide – if a DD or SO takes the account
              over the prescribed limit then the item should not be paid;
              • Documentation to be entirely in Plain Intelligible Language and to be easily
              accessible, both within branches and online;
              • Independent regulation with consultation from a consumer panel;
              • Trigger limits or flags, i.e. if a set number or percentage of DD's, SO's, etc are not
              getting met over a time period, then contact and assistance is offered by the bank;
              • Alternative or flexible charging dates to coincide with salary or income into the
              account, namely set days within the month, such as the last Friday of the month;
              • Banking code regulated and properly adhered to by the bank, with regulatory
              sanctions and/or fines where there have been repeated breaches;
              • Parent/Sister companies should be made clearer on any documentation – so as to
              allow better assessment of offers provided by banks and the offsetting of any risks;
              • Annual financial “health checks” to identify problems or concerns;
              • Enable DD's to be held rather than cancelled with the need to be set up again;
              • Allow monthly repayment plan of overdrafts prior to a default situation;
              • Simpler opening procedures;
              • Being able to contact your branch directly, with the ability of branches being able
              to process requests or resolve situations without the need to refer the customer to a
              call centre;
              • Call centre’s should be UK based;
              • Standardised regulation for all default charging aspects. The maximum level and
              frequency or total of charges that any bank applies should be set, amended,
              monitored, and controlled by the relevant regulatory body. Each bank should be
              forced to adopt and use identical terms and conditions in respect of default
              charging aspects, with the relevant terms and conditions being drafted, amended,
              issued, and administered by this regulatory body. Therefore allowing a proper
              comparison in respect of the remaining elements of the facilities and prices
              offered.
              • Monthly account fees are acceptable at a sensible rate, although they should not be
              automatically linked to additional services such as insurance, travel money, etc.
              • Financial hardship criteria should be standardised for all banks, with greater detail
              being set out within the regulatory code or the Banking Code.
              • Text alerts for issues relating to your account, such as a notification that your
              account has dropped below a certain level as a pre warning.


              4.2. We appreciate that some of these “wish list” facilities and options would have a
              commercial impact on the operation of PCAs, and could give rise to additional cost to
              the consumer. We also appreciate that not all of these items could be standardised
              without compromising competition between the banks. They do, however, reflect
              what our members would like to see offered as part of their PCA.


              4.3. We also note that there was a consistent and strong response on the need for
              independent regulation for the setting of insufficient fund charges, amendments to
              those charges, and monitoring of those charges. This underlines the lack of consumer
              confidence in historic and current self-regulation by the banks, and is a strong
              indicator of the fact that consumers generally do not trust the banks to act in a fair
              manner in respect of these charges.
              #staysafestayhome

              Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

              Received a Court Claim? Read >>>>> First Steps

              Comment


              • #8
                Re: Beagles response to PCA report (OFT)

                Shopping around for and switching PCAs

                5.1. Our members generally found that switching services was complex and inefficient.
                We have included a number of examples of their experiences:

                ‘They managed to screw up the switching service spectacularly; the whole
                thing was a mess. You have no idea what's going on and why DD have
                disappeared from the old account but not yet appear in the listings for the
                new one. Worst of all, my mortgage went unpaid as the bank instructed my
                previous bank to cancel my old direct debit before the new one was set up. I
                have an ongoing complaint about this as not paying your mortgage is BAD!
                Credit rating will be affected, please be very wary of the switching service.’’

                ‘I opened an account with them last month and sent off all my DD/Standing
                Order details as requested - received a letter telling me they'd take care of it
                all and that I wouldn’t need to contact my old bank. This month my wages
                went into my old account but my DDs have come out my new account and
                to make matters worse one of my standing orders which is my rent (£460)
                has come out of both accounts!’’

                ‘Having checked my statements this month I noticed that our mortgage
                hadn't been taken so I phoned mortgage lender who informed me they had
                tried to take it from my old bank account and failed. I have since incurred
                another £70 worth of fines as a result (from Mortgage Company and old
                bank account). The bank assured us they had taken care of everything yet the
                mortgage company said that they were not in a position to do that and
                shouldn't have said they could. We even had a letter from them to say the
                switch was all complete and our phone call to them in December was
                specifically about the mortgage. What’s worse is I have just gone through all
                my direct debits one by one and noticed that the Council Tax has not been
                taken nor my internet bill so I anticipate more fines on the way.’’


                5.2. We appreciate that this process involves administrative tasks, and that sometimes
                mistakes happen. However, anecdotal evidence from our members would indicate
                that these mistakes occur quite frequently.


                5.3. We also have concerns relating to the risk that is borne by the consumer for the
                administrative task of ‘switching’ accounts over which they have no control. In
                circumstances where other regular creditors, such as mortgage companies or credit
                card providers, charge high fees for late or missed payments, we consider it unfair
                that such charges should be borne by the consumer.


                5.4. In respect of the bank to which the consumer is switching, it is our view that they
                should allow a period of grace in which charges are not applied during the switching
                period. We are also of the view that where financial institutions would be required to
                pay late payment fees caused by these administrative errors, this would reduce the
                frequency of such errors. It might also have a beneficial impact on the level of late
                payment fees generally, as financial institutions may find themselves paying such fees
                themselves.
                #staysafestayhome

                Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                Received a Court Claim? Read >>>>> First Steps

                Comment


                • #9
                  Re: Beagles response to PCA report (OFT)

                  Opening Accounts

                  5.5. In terms of opening bank accounts, it is our view that the process should be made
                  much easier, with particular emphasis on greater flexibility over acceptable
                  identification documents. The experience of our members, as well as the authors of
                  this report, is that bank staff are generally unwilling to be flexible over the type of
                  documents they are willing to accept. Whilst we appreciate that there are issues
                  relating to fraud which must be addressed by the banks, this should not have the
                  consequence of excluding consumers from access to a bank account. It is often the
                  case that a bank will require photo ID in the form of a passport or driver’s licence,
                  neither of which may be held by a consumer, and both of which attract a certain
                  expense.


                  5.6. For consumers who do not drive, the only alternative is to apply for a passport, pay
                  the £72 application fee, and wait the 6-week “not-guaranteed” service period given by
                  the Home Office Identity and Passport Service. We believe that it is wholly
                  unacceptable that a driver’s licence or passport must be a pre-requisite for opening a
                  personal current account or basic account.


                  5.7. Furthermore, we understand that credit checks are carried out on any consumers that
                  apply for a bank account, even a basic account, and regardless of whether any credit
                  is being sought. As a result, individuals with poor credit histories can be refused even
                  a basic bank account, with serious consequences for that individual’s ability to
                  control their finances. This inability to open a basic account and have income paid
                  into it can often result in non-priority debts to the bank which holds their current
                  account are being paid off before essential debts and basic necessities are being met.
                  We believe that credit scoring should only be used where a consumer is actively
                  requesting credit, and should not be accessed otherwise.


                  5.8. It is our view that the conventional banking network has a reluctance to offer basic
                  bank accounts, and where they are made available the applications process is
                  unnecessarily complicated.


                  Post office accounts
                  5.9. We welcome the post office retaining the contract for the post office card account.
                  We value this basic account, and believe that it is vital for many consumers on low
                  incomes, especially those in receipt of state benefits, particularly as this account can
                  never incur any charges.


                  5.10. We would also welcome any move by the Post Office to introduce its own personal
                  current accounts. Ideally, this Post Office PCA would allow for the setting up of
                  direct debits and standing orders, as well as allowing online access. We appreciate,
                  however, that there may be significant costs involved for the Post Office in providing
                  such a service, which may require public funds to establish or operate. We appreciate
                  that this would be a complicated procedure under European competition legislation,
                  and could have consequences for competition within the market. Nevertheless, we
                  believe that such a move could have significant consumer and social benefits,
                  particularly for those with low incomes, and those who do not currently have any
                  form of PCA. This would also allow greater access to banking facilities in rural areas,
                  where only 4% of villages currently have a bank or building society branch, whilst
                  60% have a post office.


                  5.11. We would also support a move to make all current accounts accessible through the
                  post office, by way of cash withdrawals. Although most of the bank and building
                  societies have already established such a partnership with the Post Office, two of the
                  established banks, namely HSBC and the RBS group, have not agreed to such a
                  partnership. This means that about 31% of PCAs are not accessible at the Post Office.
                  This has particular consequences for consumers in rural areas where those bank
                  branches are scarce.
                  #staysafestayhome

                  Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                  Received a Court Claim? Read >>>>> First Steps

                  Comment


                  • #10
                    Re: Beagles response to PCA report (OFT)

                    Recent changes to PCA structure and charges

                    6.1. It is clear that self-regulation has failed in the past, and that self-regulation is
                    continuing to fail consumers. Notwithstanding the investigation by the OFT, a number
                    of banks have amended their terms and conditions in a way that is less favourable to
                    consumers as a whole.

                    Abbey
                    6.2. Abbey has changed its terms and conditions so that if a consumer exceeds their
                    overdraft facility by any amount, then the entirety of that overdraft attracts the interest
                    rate of an “unauthorised” overdraft facility. Thus if a consumer exceeds a £1000
                    overdraft facility by £1, then the whole £1001 is charged at the higher rate of interest
                    for unauthorised overdrafts.

                    Lloyds TSB
                    6.3. Lloyds TSB has entirely overhauled its charging structure which, in our view, can be
                    extremely punitive for those on low incomes. Lloyds TSB has capped unpaid/returned
                    items fees at £20 (maximum 3 per day), and introduced a daily charging rate for being
                    over your agreed limit, which varies depending on how much you are overdrawn:
                    • Less than £25 = £6 per day
                    • £25 to £100 = £15 per day
                    • Over £100 = £20 per day.
                    • A Monthly charge of £15 is levied on top of the above charges.
                    This has resulted in specific examples where consumers have gone from paying
                    charges of £35 for one returned direct debit in one month, to paying £185 of charges
                    for the same direct debit being returned the following month.

                    Barclays
                    6.4. Barclays have also made substantial changes to their terms and conditions, and
                    introduced an “opt-out” procedure for the Barclays Reserve Account in August 2008.
                    This account consists of a 'personal reserve' over and above any agreed overdraft
                    facility. Only some consumers have been given the reserve, and in our experience
                    many of the consumers who have been given the personal reserve and the option to
                    'opt-out' are some of the most vulnerable low-income consumers and would therefore
                    make use of the ‘reserve’ more frequently and attract more charges than they have
                    done previously.

                    6.5. We feel that the information provided to consumers who were given the Reserve
                    Account was unclear, and was not in plain and intelligible language. We do not believe
                    that the option to ‘opt-out’ was fair, since many consumers claim not to have received
                    this information at all.

                    6.6. Despite a headline reduction to £8 for insufficient funds requests, the Reserve which
                    was foisted onto vulnerable consumers has seen many consumers further crippled with
                    excessive charges because Barclays have began charging £22 for every 5 days that you
                    are over your agreed overdraft and into your reserve amount. The new Reserve
                    Accounts were offered to customers on an Opt-Out basis and many customers were not
                    even aware of this change, let alone the ability to “opt-out”.

                    6.7. If a consumer does opt out, they then have a buffer zone of £15 (increased from £5)
                    over the current overdraft which is not charged for, and any transactions that would
                    take you over that would be declined and returned, with the exception of guaranteed
                    cheques. These insufficient funds transactions will attract a fee of £8 per transaction -
                    as opposed to the previous £38. The reserve, on the other hand, has no such buffer.

                    6.8. Comments we have received from consumers about the Reserve Account have been
                    highly damning:

                    “I found out one of my Barclays accounts had gone over by £0.98 while on
                    holiday and I was charged twice, so I ended up with a total charge of £44. In the
                    old system you were not charged anything if you went over by a max of £5.’’

                    ‘Barclays kindly phoned me yesterday to indicate I owe them around £250 -
                    apparently there was an opt out letter sent to my wrong address stating there is
                    now a personal reserve of £150 on my dormant account . I took out £40 when I
                    had about £5 and only a £10 overdraft - so it wouldn’t have worked before
                    hand’

                    ‘I received a letter a couple of weeks ago explaining that as a valued customer
                    they had automatically implemented a reserve on my accounts (x2). I didn’t
                    really understand the real impact of this and didn’t think anything of it until we
                    recently went overdrawn by £7.00 for less than 24 hours! Yes a whole £7.00!
                    Within 24 hours we were charged a whopping £22.00!’’


                    6.9. Whilst we appreciate that some of these recent changes to terms and conditions for
                    Abbey, Lloyds TSB, and Barclays may appear to be an improvement, in that there are
                    lower short-term charges if a consumer can remedy the breach of the overdraft, we
                    have serious concerns that these changes are extremely prejudicial to the majority of
                    consumers. This is because most consumers who do exceed any agreed limit on their
                    overdraft are rarely in a position to rectify the situation before the next payment of a
                    monthly salary or social security payment. This will inevitably result in vulnerable
                    consumers paying even greater levels of charges than previously. As noted above,
                    vulnerable consumers can now pay up to £185 for a single returned or unpaid direct
                    debit.


                    6.10. We also have serious concerns at the ability of the banks to impose triple-charging on
                    consumers; a single breach of the overdraft will lead to an unpaid item charge, a
                    monthly charge, and a higher level of interest. We are concerned that any “threshold”
                    figure put forward by the OFT incorporates limits on monthly charges and interest
                    rates recoverable in order to avoid this triple charging. We raise this concern because
                    of the market reaction to the credit card charges report, where credit card companies
                    went from imposing a single fee to triple fees: a returned payment fee, a late payment
                    fee, and an over limit fee all imposed for the same returned direct debit. Thus an
                    original charge on credit cards of £25 or £30 has become 3 charges of £12, which
                    results in a higher charge for the consumer. We would urge the OFT to anticipate this
                    kind of market reaction, and to effectively regulate the number of times that a bank can
                    recover insufficient funds charges for the same transaction. We do not wish to see a
                    repeat of the market reaction to credit card charges whereby consumers could
                    ultimately pay more in default fees than they were paying previously.


                    6.11. We have found that a number of complaints are concerned with new services that are
                    introduced and imposed onto our members’ accounts which were never agreed to.
                    Usually when a service provider introduces a new service, it is offered to the customer
                    who has power to decide for himself whether he wants to use the service. Only after
                    the provider has a written agreement with the customer may the provider commence
                    rendering and charging for services.


                    6.12. We are particularly concerned with the uniquely powerful position that every bank has
                    over its customers’ income. We believe that banks have abused this power by
                    introducing new services and charging their customers for it whether they want it or
                    not. A bank is in a position to do this because it has access to its customer’s income
                    before they do. Therefore it is able to charge its customers with or without their
                    agreement.


                    6.13. An example put forward by some members is that of a tradesman introducing a new
                    service, implementing that service without first agreeing it with his customer, and then
                    sending the customer the bill. The customer would quite rightly refuse to pay. It is
                    inconceivable that a regulator or a court would find in favour of the tradesman if the
                    payment was brought before them in a dispute. Yet, this very practice is allowed to go
                    on every day in personal banking.


                    6.14. Many services which exist on most PCA’s since September 2007 did not exist at the
                    time of opening the account. These services include ‘considering & declining
                    payments’ and of course ‘unarranged overdraft approval’. Not without good reason,
                    many consumers believe that these new terms & services introduced on their account
                    were merely an instrument with which the banks concerned could evade scrutiny on
                    the issue of penalties and deliberate misrepresentation. However, even after writing to
                    their bank and asking for these new services to be removed, some customers are met
                    with the blunt response “your account will be operated according to our agreed terms
                    and conditions”. Clearly, no such terms were ever agreed, they were imposed and are
                    indeed being disputed.


                    6.15. We would urge the OFT to regulate an opt-out system for consumers in respect of the
                    imposition of insufficient funds charges altogether. One of the most serious complaints
                    from consumers is the lack of control over how their account is operated. There would
                    be fewer grounds for complaints, and greater consumer control over their finances, if
                    they had the option not to allow payments to go out of their accounts when there are
                    insufficient funds. Whilst we accept that there may be minor costs associated with such
                    an automatic system, those costs should properly reflect the cost to the banks. It is our
                    experience that consumers would accept such fees, if they were proportionate to the
                    actual costs involved.
                    #staysafestayhome

                    Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                    Received a Court Claim? Read >>>>> First Steps

                    Comment


                    • #11
                      Re: Beagles response to PCA report (OFT)

                      Conclusion and recommendations

                      7.1. Whilst we support the objectives of the current market study and the ongoing Test
                      Case proceedings, we have serious concerns with the amount of time it has taken for
                      such action to be forthcoming. It has taken a nation-wide consumer campaign against
                      the level and frequency of insufficient fund charges, alongside high-profile media
                      coverage, before the OFT and the FSA have contemplated any formal action against
                      the banks in respect of these charges. Even now, with a provisional finding by the OFT
                      that these insufficient fund charges are unfair, the banks are continuing to impose these
                      charges with apparent impunity.


                      7.2. We have serious concerns that this is further undermining consumer confidence in both
                      the banks and the regulators. In circumstances where the High Court has ruled that
                      such charges are subject to the test of fairness under the UTCCRs, and where the OFT
                      has reached a provisional conclusion that these charges are unfair, we believe it is
                      unacceptable that the banks should be allowed to continue imposing these charges.


                      7.3. Whilst we appreciate that the OFT has limited funding, and is trying to proceed with
                      the case in a sensible manner, we are dismayed at the length of time it has taken to
                      reach this stage, with no end in sight for at least 12 months. We are seriously
                      concerned that the banks are attempting to drag out the court process for as long as
                      possible, so as to delay repayments to consumers and to continue imposing these
                      charges, at a time when many consumers are facing serious financial hardship as a
                      result.


                      7.4. We would strongly urge the OFT to use their statutory powers to seek interim
                      injunctive measures to prevent the continued use of these insufficient fund charges.


                      7.5. With £39billion of public funds already injected into our ailing banking industry, and
                      with the prospect of more public funds to come in the future, the tax-paying consumer
                      is entitled to expect more from their banks. Given the pressing need for increased
                      regulation of the banking industry following the current financial crises, there will not
                      be a better opportunity for the OFT to use its moral and political authority to ensure a
                      fairer deal for consumers by effectively regulating the PCA market and the use of
                      insufficient fund charges.


                      7.6. It appears to us, despite years of pressure from the government and regulatory bodies,
                      that the banks are unwilling to voluntarily implement the essential changes to the PCA market
                      that are required to ensure proper competition and the fair treatment of
                      consumers. For the reasons set out in this formal response, we are of the opinion that
                      the time for self-regulation has long since passed. At a time when confidence in the
                      UK banking industry is at an all-time low, endemic failures within the industry must
                      be rectified through strict independent regulation combined with greater transparency.


                      7.7. One foreseeable result of the OFTs investigation into insufficient fund charges is the
                      setting of a “monetary threshold” for such charges above which the OFT will take
                      action, similar to the market study into credit card charges11. At whatever level this
                      “threshold” for charges is set, our experiences with the market reaction to the credit
                      card charges report leads us to believe that this reaction will be repeated in the banking
                      market. Namely that each bank will use the threshold set by the OFT. We urge the
                      OFT to take recognition of this fact, and to appreciate that any “threshold level” set by
                      the OFT is likely to become the industry standard.


                      7.8. In light of this, and the lack of competition that will inevitably follow, we would urge
                      the OFT to take a stricter approach and actually regulate the market in respect of
                      insufficient fund charges, setting out clearly the prescribed circumstances in which
                      they can be imposed and, more importantly, the level of charges that can be imposed.
                      Whilst we appreciate that this may raise concerns relating to competition, it is obvious
                      that there is no such competition now, and that a “threshold” level will remove any
                      scope for competition in the future.


                      7.9. Legal Beagles and its members would again like to thank the OFT for providing the
                      opportunity to contribute to this consultation. We would be pleased to offer our input
                      to any future discussions regarding this or any other consumer issues. We feel we
                      provide a valuable vehicle for communication between the consumer and the regulator.




                      11 See the OFT Report Calculating fair default charges in credit card contracts April 2006
                      Last edited by Budgie; 8th October 2009, 10:49:AM.
                      #staysafestayhome

                      Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                      Received a Court Claim? Read >>>>> First Steps

                      Comment


                      • #12
                        Re: Beagles formal response to OFT PCA Market Study Consultation Nov 2008

                        here
                        #staysafestayhome

                        Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                        Received a Court Claim? Read >>>>> First Steps

                        Comment


                        • #13
                          Re: Beagles formal response to OFT PCA Market Study Consultation Nov 2008

                          Conclusions - October 2009

                          7 October 2009
                          The OFT has published a follow up to its 2008 report on Personal current accounts in the UK. The follow up report details how banks will be making the costs of current accounts more transparent and how switching between current accounts has been made easier for consumers.
                          To combat low levels of price transparency most current account providers will:
                          • make charges more prominent on monthly statements
                          • provide information on average credit and average debit balances, and
                          • provide illustrative scenarios showing unarranged overdraft costs.

                          To improve the ease of switching between PCAs:
                          • a new consumer guide and website have been introduced
                          • measures to reduce the number of problems that arise with the transferring of Direct Debits have been taken, and
                          • consumers should not be adversely affected by any problems caused by the switching process.

                          Download Personal current accounts in the UK - A follow up report (pdf 1.79Mb)
                          #staysafestayhome

                          Any support I provide is offered without liability, if you are unsure please seek professional legal guidance.

                          Received a Court Claim? Read >>>>> First Steps

                          Comment

                          View our Terms and Conditions

                          LegalBeagles Group uses cookies to enhance your browsing experience and to create a secure and effective website. By using this website, you are consenting to such use.To find out more and learn how to manage cookies please read our Cookie and Privacy Policy.

                          If you would like to opt in, or out, of receiving news and marketing from LegalBeagles Group Ltd you can amend your settings at any time here.


                          If you would like to cancel your registration please Contact Us. We will delete your user details on request, however, any previously posted user content will remain on the site with your username removed and 'Guest' inserted.
                          Working...
                          X