Thanks to everyone across the site for their input into this especially EXC, Budgie, Centium and Tools. Its gone off to the OFT today following our meeting with them on Wednesday - it is only a first view on things - please excuse grammatical and spelling errors or rubbish wording (and a random repeat of the same point on the ECJ) - we only had 24 hours really to produce it and we're not lawyers by any stretch of the imagination. Its an amalgamation of everything we've been discussing across the forums over the past few weeks.
Download the full report - Legal Beagles PDF
From the conclusion of the report
CONSEQUENCES OF THE OFT's DECISION
We actually found this quite a complicated area to cover particularly because Consumers have been so massively affected in all areas by previous charging structures and levels.
If the OFT do not continue:
In the event the OFT decide not to continue with the UTCCR investigation, we consider some the likely consequences to be as follows:-
A widespread reduction in Consumer confidence in the OFT and other Government bodies.
Concerns related to the wasted costs in terms of money and resources involved in the UTCCR investigation to date.
Concerns that the banks will raise PCA charges (which can be countered by other work undertaken in the market - the OFT will need to reassure consumers that prices and charging structures of PCAs have become and will continue to be more competitive, transparent and fairer and that regulation in the market will be strengthened and monitoring continued).
There would be no redress on historical charges - Consumers feel that the changes in the system over the past three years are evidence that the previous levels and structures were unfair and unreasonably high and the structures in place unfair and opaque. The charges have had massive effects on individuals overall life - finances, relationships, businesses, homes, health, the list is endless. The lack of fairness or compassion shown by the banks to individuals prior to and during the investigation has massively
impacted Consumer confidence in the banks and the regulators and they want recompense for the failings.
A number of Consumers with stayed County Court claims would most likely wish to continue their claims on an individual basis. Whether they actually did so would depend upon their confidence in their own ability to litigate in person. This would of course disadvantage less able or less confident Consumers and would cause renewed chaos in the County Court system. Most Consumers pursuing their own claims in this manner would expect or hope that the Banks would settle in advance of a formal Court hearing. However, because of the complexities of the legal arguments involved these matters would quite quickly have to be taken to the High Court rather than the County Court and no individual Consumer is likely to be able to pursue this course of action owing to both cost and complexity. Such an action would have to be pursued via some form of Representative action and it is unlikely that such a Representative action could or would be entertained if there was no participation in the form of an ongoing investigation by the OFT.
Seasoned Campaign Groups may also be concerned about 'letting Consumers down' and may push their visitors and members into court on the same and further developed arguments the OFT have declined to continue with. This also creates the risk of pushing Consumers further into debt whilst they try to keep overdraft debts in dispute whilst these cases progress.
Consumer groups would also be forced to seek or pursue solutions to the Bank charges scenario via political and or parliamentary routes. The Government will be asked to intervene and look again at legislation and independent regulation of the banks
Consumers who have had overdrafts/debt on hold whilst the investigation was ongoing are concerned about the speed and ferocity with which the banks will demand repayment of this money. Overdrafts, even whilst in dispute, have been subject to charges upon charges upon charges increasing the debt over the past three years. Banks have also taken legal action against Consumers who disputed overdraft debt as being made up of charges to enforce repayment - these claims in many cases have also been put on hold by the courts pending the resolution of the test case. Some of these will be for thousands of pounds, and made up almost entirely of bank charges. Debt Collection Guidelines (OFT 664) and regulation MUST be highlighted and adhered to by the banks. We would like to see some form of leniency/breathing space for these Consumers and the banks to accept repayment plans evidenced as affordable before pushing for charging/sale orders
Banks asking for ''wasted costs'' etc on claims in the system prior to Nov 25th.
Amnesty of interest and charges incurred on abandoned overdrafts pending test case (goodwill / PR for banks).
Future of Credit Card claims - will the OFT proceed to obtain legal clarity on those issues.
Conspiracy Theories abound
Will there be a competition investigation
Continuance of PCA Market Study and release and implementation of findings with regards to charges. The OFT have already found the charges unfair (ref August 2008 letters) How will they
take that forward without litigation?
Other subjects which will be raised; much of this will be expanded on in our PCA report update.
The Governments inclusion scheme pushing people into banking - exposing people to charges.
Benefits - claimants being 'encouraged' into opening bank accounts rather than using POCA
Strengthened Regulation of processing of hardship complaints - refer Lending Code Section 9.
Banks encouraged to accept repayment plans from consumers on Overdrafts BEFORE there is a problem
Refunds for periods of hardship - clarification if this can continue under BCOBS and Lending Code (historically under Banking code)
Refunds on charges and interest added on overdrafts where they have been added whilst the charges and thus the debt had been in dispute.
If the OFT continue:
Consumer Groups are mainly concerned with the issues of power and control afforded to the Banks by these contracts and would continue to have confidence and are relying upon the OFT to fulfil its obligations.
The majority of Consumers are already disappointed by the OFT and the UK legal system and the apparent failure to provide legal clarity for these issues. The possibility exists for the OFT to repair this disappointment and stamp it‘s authority as the UK‘s official Regulator and enforcer.
Many Consumers are frustrated at the amount of time taken to date with the original test case and would of course be disappointed if a further lengthy court battle were to be embarked upon. However, most Consumers would rather have eventual certainty and clarity rather than no clear legal solution at all.
The OFT are unlikely to ever have a more important case to administer. Virtually every UK Consumer is affected, the value, not just in monetary terms, is enormous and the potential benefits for Consumer contract regulation are extremely tangible.
The OFT would be continuing its investigation under the UTCCR‘s, plus pursuing change in the market via its PCA report and or via the competition route. Plus, if it were to also consider the possibility of joining or being joined in litigation by a Consumer Representative Action aimed at resolving historic plus non UTCCR issues together with legal redress, limitation and compensation then the OFT would not have wasted two years of cost, experience and acquired knowledge of the intimate workings of the Banks' charging systems. It is extremely unlikely however that Representative action could be undertaken if the OFT were not to continue its investigation.
Most Consumers would be 100% behind the OFT continuing its investigation, even if the Banks continued on their so called charges reduction program and charges were reduced to say only 2p. The present status of the contract and the lack of Consumer control in the contract is unacceptable and disproportionately in favour of the Banks. Every Consumer is at risk from the future excesses of effectively unregulated PCA contracts.
Should the OFT decide to continue then the status of stayed claims in court, overdrafts in dispute and the terms of any new waiver need to be made clear immediately.
CONCLUSION
We urge the OFT to continue the investigation to achieve legal clarity and certainty and thank you for enabling our views to be heard on behalf of Legalbeagles.info
Its much easier to read the PDF version which you can download below
Download the full report - Legal Beagles PDF
From the conclusion of the report
CONSEQUENCES OF THE OFT's DECISION
We actually found this quite a complicated area to cover particularly because Consumers have been so massively affected in all areas by previous charging structures and levels.
If the OFT do not continue:
In the event the OFT decide not to continue with the UTCCR investigation, we consider some the likely consequences to be as follows:-
A widespread reduction in Consumer confidence in the OFT and other Government bodies.
Concerns related to the wasted costs in terms of money and resources involved in the UTCCR investigation to date.
Concerns that the banks will raise PCA charges (which can be countered by other work undertaken in the market - the OFT will need to reassure consumers that prices and charging structures of PCAs have become and will continue to be more competitive, transparent and fairer and that regulation in the market will be strengthened and monitoring continued).
There would be no redress on historical charges - Consumers feel that the changes in the system over the past three years are evidence that the previous levels and structures were unfair and unreasonably high and the structures in place unfair and opaque. The charges have had massive effects on individuals overall life - finances, relationships, businesses, homes, health, the list is endless. The lack of fairness or compassion shown by the banks to individuals prior to and during the investigation has massively
impacted Consumer confidence in the banks and the regulators and they want recompense for the failings.
A number of Consumers with stayed County Court claims would most likely wish to continue their claims on an individual basis. Whether they actually did so would depend upon their confidence in their own ability to litigate in person. This would of course disadvantage less able or less confident Consumers and would cause renewed chaos in the County Court system. Most Consumers pursuing their own claims in this manner would expect or hope that the Banks would settle in advance of a formal Court hearing. However, because of the complexities of the legal arguments involved these matters would quite quickly have to be taken to the High Court rather than the County Court and no individual Consumer is likely to be able to pursue this course of action owing to both cost and complexity. Such an action would have to be pursued via some form of Representative action and it is unlikely that such a Representative action could or would be entertained if there was no participation in the form of an ongoing investigation by the OFT.
Seasoned Campaign Groups may also be concerned about 'letting Consumers down' and may push their visitors and members into court on the same and further developed arguments the OFT have declined to continue with. This also creates the risk of pushing Consumers further into debt whilst they try to keep overdraft debts in dispute whilst these cases progress.
Consumer groups would also be forced to seek or pursue solutions to the Bank charges scenario via political and or parliamentary routes. The Government will be asked to intervene and look again at legislation and independent regulation of the banks
Consumers who have had overdrafts/debt on hold whilst the investigation was ongoing are concerned about the speed and ferocity with which the banks will demand repayment of this money. Overdrafts, even whilst in dispute, have been subject to charges upon charges upon charges increasing the debt over the past three years. Banks have also taken legal action against Consumers who disputed overdraft debt as being made up of charges to enforce repayment - these claims in many cases have also been put on hold by the courts pending the resolution of the test case. Some of these will be for thousands of pounds, and made up almost entirely of bank charges. Debt Collection Guidelines (OFT 664) and regulation MUST be highlighted and adhered to by the banks. We would like to see some form of leniency/breathing space for these Consumers and the banks to accept repayment plans evidenced as affordable before pushing for charging/sale orders
Banks asking for ''wasted costs'' etc on claims in the system prior to Nov 25th.
Amnesty of interest and charges incurred on abandoned overdrafts pending test case (goodwill / PR for banks).
Future of Credit Card claims - will the OFT proceed to obtain legal clarity on those issues.
Conspiracy Theories abound
Will there be a competition investigation
Continuance of PCA Market Study and release and implementation of findings with regards to charges. The OFT have already found the charges unfair (ref August 2008 letters) How will they
take that forward without litigation?
Other subjects which will be raised; much of this will be expanded on in our PCA report update.
The Governments inclusion scheme pushing people into banking - exposing people to charges.
Benefits - claimants being 'encouraged' into opening bank accounts rather than using POCA
Strengthened Regulation of processing of hardship complaints - refer Lending Code Section 9.
Banks encouraged to accept repayment plans from consumers on Overdrafts BEFORE there is a problem
Refunds for periods of hardship - clarification if this can continue under BCOBS and Lending Code (historically under Banking code)
Refunds on charges and interest added on overdrafts where they have been added whilst the charges and thus the debt had been in dispute.
If the OFT continue:
Consumer Groups are mainly concerned with the issues of power and control afforded to the Banks by these contracts and would continue to have confidence and are relying upon the OFT to fulfil its obligations.
The majority of Consumers are already disappointed by the OFT and the UK legal system and the apparent failure to provide legal clarity for these issues. The possibility exists for the OFT to repair this disappointment and stamp it‘s authority as the UK‘s official Regulator and enforcer.
Many Consumers are frustrated at the amount of time taken to date with the original test case and would of course be disappointed if a further lengthy court battle were to be embarked upon. However, most Consumers would rather have eventual certainty and clarity rather than no clear legal solution at all.
The OFT are unlikely to ever have a more important case to administer. Virtually every UK Consumer is affected, the value, not just in monetary terms, is enormous and the potential benefits for Consumer contract regulation are extremely tangible.
The OFT would be continuing its investigation under the UTCCR‘s, plus pursuing change in the market via its PCA report and or via the competition route. Plus, if it were to also consider the possibility of joining or being joined in litigation by a Consumer Representative Action aimed at resolving historic plus non UTCCR issues together with legal redress, limitation and compensation then the OFT would not have wasted two years of cost, experience and acquired knowledge of the intimate workings of the Banks' charging systems. It is extremely unlikely however that Representative action could be undertaken if the OFT were not to continue its investigation.
Most Consumers would be 100% behind the OFT continuing its investigation, even if the Banks continued on their so called charges reduction program and charges were reduced to say only 2p. The present status of the contract and the lack of Consumer control in the contract is unacceptable and disproportionately in favour of the Banks. Every Consumer is at risk from the future excesses of effectively unregulated PCA contracts.
Should the OFT decide to continue then the status of stayed claims in court, overdrafts in dispute and the terms of any new waiver need to be made clear immediately.
CONCLUSION
We urge the OFT to continue the investigation to achieve legal clarity and certainty and thank you for enabling our views to be heard on behalf of Legalbeagles.info
Its much easier to read the PDF version which you can download below
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