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  • BCOB Regulations

    BCOBS does not apply to overdrafts or unfair charges.

    Evening all,

    I make no apologies for this post, but I admit to having plaigirised a fair amount of it!

    However I only heard about this yesterday and feel it may be very important for all of us, so here it is:

    IMPORTANT INFORMATION
    JANUARY 2011
    BCOB - Are ‘BCOBS’ the rules that nobody wants you to know about?

    After some examination, the ‘Banking:Conduct of Business Regulations’ make it illegal for your bank to treat you unfairly.

    This legislation also gives you the right to sue them in the county court if they do.

    The regulatory process, which is meant to be on the side of consumers, has produced a set of rules which is intended to protect consumers, BUT the same regulatory process seems to be very reluctant to let us know about them.

    This is is the conclusion that one is faced with when one examines the new ‘Banking: Conduct of Business Regulations.’ which are contained in the FSA Handbook.

    It is wrong to say that these regulations are new, as they are over two years old.
    They were introduced to replace The Banking Code of Practice -- a discredited so-called voluntary code which the banks like to parade around and which the Financial Ombudsman seem to take very little interest in and have made very little use of, or so it seems.

    It is no coincidence that the Banking Code of Practice, used by the banks to legitimate and validate their appallingly bad treatment of their own customers, was very widely publicised by them, BUT the ‘Banking: Conduct of Business Regulations’ which could be a powerful weapon in the hands of an aggrieved customer, appears to be hidden away by the Banking industry without any reason, but more importantly this is possibly a ‘passive’ act of deception by the Banks – trying to ensure the Consumer does not ‘discover’ their existence. A last desperate act of Goliath against David perhaps?


    The power of BCOB lies in the fact that it creates very general obligations to treat customers fairly -- and also that it gives individual customers the right to sue their banks in the County Court when, considering the BCOB Regs, the Bank have acted unfairly towards you.


    This is definitely not something your Bank wants you to know. I suggest calling into your local branch and asking them about these ‘BCOB Regulations’, or indeed asking if they can supply you with a copy.

    The FSA have not referred to your direct right to sue in the courts in its Know Your Rights Guide. It merely says that you should either write to your bank or else go to the Ombudsman. Have they hidden it? That it something to ponder as the FSA certainly have not made efforts to draw attention to the BCOB Regs.
    The British Banking Association has produced an Industry Guide on their website. It is not a consumer guide. It's a guide for the industry, but it's written in clear enough language so that ordinary consumers could understand it as well. As a Consumer Guide -- it'll do.

    However it does not tell the truth about the BCOB rules and about the ways in which banks should act fairly as it doesn't tell the whole story. In a way, the BBA Industry Guide is more limited than the Code but tends to follow the same path so that it could be guilty of giving the impression that it is just another version of the Banking Code.

    The BBA guide tries to give itself some authority by including BCOB source material in its original form after its plain English version.

    Of course, the BBA acts in the interests of Banks. It does not act in the interests of consumers. So it is not surprising that they appear to not want consumers to know all about BCOB.

    However this is an Industry Guide. Why don’t they want to explain to their own members exactly what they have been saddled with by the FSA?
    Is there some type of avoidance activity which ensures the Consumer is not fully in the picture as far as the rights which the Law bestows upon the Consumer by the controls it places on the Banks?
    It could appear that the reason that the BBA wants to publish a dumbed down version of the BCOB requirements on its publicly accessible website is because it is fullyl aware that Consumers will be ‘eavesdropping’ on its site and may form the opinion "well if this is what the BBA is telling its own members about BCOB, then it must be true."

    I am deeply worried by the fact that the BBA has not pointed out to its industry members that under these new FSA regulations, the Customer has a private right of action.

    The FSA has produced a consumer-facing guide because the FSA is there to protect our interests and the FSA has also produced the BCOB regulations they must be proud of their work and want consumers to know.

    However the FSA guide is a Janet-and-John explanation of some of the effects of the new BCOB regulations and fails completely to give any idea of the breadth of the BCOB provisions.

    If you read the FSA guide, you could end up thinking that they had explained the entire package and that there was nothing else to consider.

    The most damming point is that the FSA omits to point out that individual customers are entitled to take their own court actions against offending banks rather than have to wait an eternity for the FOS to get a move on.

    The FSA mentions your right to take court action in a guide called How to Complain - but they suggest Court action as a last resort.
    The banks are so seriously abusive of the Ombudsman process – [and the Ombudsman is so under-resourced], that a recommendation for Court action is an early option. To be clear this should be the case but it has been found that to be very effective if properly organised and approached.

    The last few words on this are : Do you think that's all there is? Do you think that consumers are getting a proper deal under the new fairness obligations?

    These two are the ones to read:

    BBA Industry Guide to BCOBS

    FSA Guide to BCOBS


    Best wishes

    Dougal
    Last edited by Amethyst; 16th September 2013, 22:18:PM. Reason: just making it crystal clear
    Tags: None

  • #2
    Re: BCOB Regulations

    Here they are folks:

    FSA Handbook - Full Handbook

    An important point to make clear is these regulations cover only the non lending section of the Banking Code, hence I presume, the introduction of the Lending Code.

    Comment


    • #3
      Re: BCOB Regulations

      Morning all,

      Whilst it appears that this is the case, I believe that it may cover other institutions including sub-prime lenders by virtue of the following:

      Taken from the BCOB Regulations:

      Annex B
      Amendments to the Principles for Businesses (PRIN)
      In this Annex, underlining indicates new text and striking through indicates deleted text.
      Accepting deposits and issuing electronic money
      1.1.3 G The Principles apply with respect to regulated activities generally, but, in
      applying the Principles with respect to accepting deposits and issuing
      electronic money the FSA will proceed only in a prudential context. That is to
      say, in this context, the FSA would not expect to exercise the powers brought
      into play by a contravention of a Principle unless the contravention amounted
      to a serious or persistent violation which had implications for confidence in
      the financial system, or for the fitness and propriety of the firm or for the
      adequacy of the firm’s financial resources.

      3.2.1 R PRIN applies with respect to the carrying on of:
      (1) regulated activities;
      (2) activities that constitute dealing in investments as principal,
      disregarding the exclusion in article 15 of the Regulated Activities
      Order (Absence of holding out etc); and
      (3) ancillary activities in relation to designated investment business,
      home finance activity, and insurance mediation activity and
      accepting deposits.

      Here are some examples of unfair treatment:

      The FSA Conduct of Business Sourcebook rules make it illegal for your bank or your credit card issuer or your lender to treat you unfairly.

      Banking:Conduct of Business Regs - (BCOB or BCOBS) gives you the right to sue your bank in the county court in respect of unfair treatment received in connection with the provision of retail current account services.

      Unfairness in connection with the provision of credit card services or a loan is a breach of an implied term in your contract and you can sue for breach of contract


      If you sue your bank for breaking the law under BCOBS, you are suing them for Breach of Statutory Duty.
      If you sue your bank for breaking the law in respect of unfairness in a credit card or loan contract, you are suing them for breach of contract.

      Here are some examples of unfair treatment.

      Some of these are actually identified in the FSA guide or the BBA guide.

      However, as has been pointed out elsewhere, these guides are rather restricted in their treatment of BCOB and are limited in their description of unfair scenarios.

      You should check out BCOB rule 5.1.1 which creates a general duty to treat you fairly.

      The list below includes common complaints on this forum which think would probably be a breach of the BCOB rules.
      You can probably come up with more examples.

      It should be noted that banks cannot act illegally either by treating you unfairly directly - or through their agents.


      In no particular order:-
      Refusing to discuss financial difficulties and to suggest positive solutions
      Unexplained peremptory closure of accounts - the longer the account has been held, the greater the requirement of an explanation and of tolerance to difficulties
      Unexplained peremptory withdrawal of overdraft facilities - once again, the length of time that the account or overdraft has been in place is highly relevant - especially in respect of small businesses
      Refusal to accept reasonable repayment proposals on the evidence of an income expenditure schedule
      Ignoring a letter of appropriation
      Harassment of debtor on the phone
      Charges on bounced DDs or cheques
      Imposing an overdraft on a basic account
      Charges on paid DDs or cheques
      Treating bank-imposed charges as unauthorised - (RBS has already conceded as a "gesture of goodwill" on this BCOBS point)
      Levying charges upon charges - (RBS has already conceded as a "gesture of goodwill" on this BCOBS point)
      Failure to accept instructions not to make further payments on a credit card/debit card number
      Refusal to cancel DD instruction
      Refusal to offer basic bank account without good reason
      Charging more than cost for duplicate bank statements - £5 fee is probably unfair
      Failing to supply bank statements on accounts in difficulty where account fee is still paid
      Reneging on an instalments agreement by, for instance, by beginning recovery measures directly or through an agent while the agreement is in place.
      Insisting on payments being made only in some particular form such as by direct debit - and refusing to accept payments made by some other method, for instance Standing order.
      Suing your bank in these circumstances is usually a relatively straightforward County Court action

      If you really want to teach your bank a lesson that unfairness doesn't pay, then prove a breach of FSA regulations and then use that to challenge the fairness of the relationship under s.140A Consumer Credit Act. The effect of this could be to have the entire loan declared unenforceable.

      I cannot advocate that people should avoid their legitimate debts, but on the other hand if it takes some debt avoidance to persuade the banks to start behaving themselves and to stop bullying their customers - then so be it.


      Methinks more research is needed by yours truly....any comments anyone?


      Best wishes to all:

      Dougal

      Comment


      • #4
        Re: BCOB Regulations

        BCOBS does not apply to overdrafts or unfair charges. The regulatory change put the OFT in charge in this relation. I hope no one on CAG is going to assume that this offers a new line for Unfair Charges cases because it does not.
        "Family means that no one gets forgotten or left behind"
        (quote from David Ogden Stiers)

        Comment


        • #5
          Re: BCOB Regulations

          Originally posted by leclerc View Post
          I hope no one on CAG is going to assume that this offers a new line for Unfair Charges cases because it does not.


          I think you posted about BCOBS in 2010. Sadly they are what they are, and not as powerful as one might expect.

          Comment


          • #6
            Re: BCOB Regulations

            Originally posted by leclerc View Post
            BCOBS does not apply to overdrafts or unfair charges. The regulatory change put the OFT in charge in this relation. I hope no one on CAG is going to assume that this offers a new line for Unfair Charges cases because it does not.

            Good evening all,

            I am always keen to be corrected where I err. However I cannot find an explanation of where this following phrase took place: 'The regulatory change put the OFT in charge in this relation. '

            If you can help, please feel free.....

            Best wishes

            Dougal

            Comment


            • #7
              Re: BCOB Regulations

              Originally posted by Dougal16T View Post
              Good evening all,

              I am always keen to be corrected where I err. However I cannot find an explanation of where this following phrase took place: 'The regulatory change put the OFT in charge in this relation. '

              If you can help, please feel free.....

              Best wishes

              Dougal
              If you read the OFT bank charges thread, EXC has put the details on that thread from a previous CAG assumption that was wrong.
              ------------------------------- merged -------------------------------
              Consumer Credit Act 1974 ('CCA'), Financial Services and Market Act 2000 ('FSMA') and Payment Services Regulations 2009 ('PSRs')

              As of 1 November 2009 payment services will be subject to a single regulatory regime - the Payment Services Regulations 2009 (PSRs). The PSRs are designed to harmonise the standards of customer service for all payment transactions throughout the European Union. This changes the existing arrangements for banking regulation.

              The Financial Services Authority (FSA) will be the new regulator for most aspects of the regime, taking over all retail banking conduct regulation for deposit taking and payment services. The FSA has drawn up Banking Conduct of Business rules and these will sit alongside the PSRs.

              However, areas of retail banking which fall outside of the FSA's remit, such as overdrafts and credit card lending, will continue to be regulated under the Consumer Credit Act 1974. The Office of Fair Trading (OFT) has a duty to license and regulate businesses involved in consumer credit activities provided that they satisfy the OFT they are fit to hold a licence. As well as retaining responsibility for the CCA areas, the OFT will also have responsibility for Part 8 of the PSRs which deals with competition issues relating to access to payment systems.

              Read questions and answers on the OFT's role in enforcing Part 8 of the PSRs (pdf 140kb)
              As a result of these changes the OFT and the FSA have agreed a concordat between the two organisations which sets out our division of responsibilities and how we will co-ordinate our work and ensure effective and consistent delivery of consumer protection in this area.

              Banking conduct regime - The Office of Fair Trading
              Last edited by leclerc; 6th January 2012, 09:57:AM. Reason: Automerged Doublepost
              "Family means that no one gets forgotten or left behind"
              (quote from David Ogden Stiers)

              Comment


              • #8
                Re: BCOB Regulations

                Originally posted by Dougal16T View Post
                Morning all,

                Whilst it appears that this is the case, I believe that it may cover other institutions including sub-prime lenders by virtue of the following:

                Taken from the BCOB Regulations:

                Annex B
                Amendments to the Principles for Businesses (PRIN)
                In this Annex, underlining indicates new text and striking through indicates deleted text.
                Accepting deposits and issuing electronic money
                1.1.3 G The Principles apply with respect to regulated activities generally, but, in
                applying the Principles with respect to accepting deposits and issuing
                electronic money the FSA will proceed only in a prudential context. That is to
                say, in this context, the FSA would not expect to exercise the powers brought
                into play by a contravention of a Principle unless the contravention amounted
                to a serious or persistent violation which had implications for confidence in
                the financial system, or for the fitness and propriety of the firm or for the
                adequacy of the firm’s financial resources.

                3.2.1 R PRIN applies with respect to the carrying on of:
                (1) regulated activities;
                (2) activities that constitute dealing in investments as principal,
                disregarding the exclusion in article 15 of the Regulated Activities
                Order (Absence of holding out etc); and
                (3) ancillary activities in relation to designated investment business,
                home finance activity, and insurance mediation activity and
                accepting deposits.

                Here are some examples of unfair treatment:

                The FSA Conduct of Business Sourcebook rules make it illegal for your bank or your credit card issuer or your lender to treat you unfairly.

                Banking:Conduct of Business Regs - (BCOB or BCOBS) gives you the right to sue your bank in the county court in respect of unfair treatment received in connection with the provision of retail current account services.

                Unfairness in connection with the provision of credit card services or a loan is a breach of an implied term in your contract and you can sue for breach of contract


                If you sue your bank for breaking the law under BCOBS, you are suing them for Breach of Statutory Duty.
                If you sue your bank for breaking the law in respect of unfairness in a credit card or loan contract, you are suing them for breach of contract.

                Here are some examples of unfair treatment.

                Some of these are actually identified in the FSA guide or the BBA guide.

                However, as has been pointed out elsewhere, these guides are rather restricted in their treatment of BCOB and are limited in their description of unfair scenarios.

                You should check out BCOB rule 5.1.1 which creates a general duty to treat you fairly.

                The list below includes common complaints on this forum which think would probably be a breach of the BCOB rules.
                You can probably come up with more examples.

                It should be noted that banks cannot act illegally either by treating you unfairly directly - or through their agents.


                In no particular order:-
                Refusing to discuss financial difficulties and to suggest positive solutions
                Unexplained peremptory closure of accounts - the longer the account has been held, the greater the requirement of an explanation and of tolerance to difficulties
                Unexplained peremptory withdrawal of overdraft facilities - once again, the length of time that the account or overdraft has been in place is highly relevant - especially in respect of small businesses
                Refusal to accept reasonable repayment proposals on the evidence of an income expenditure schedule
                Ignoring a letter of appropriation
                Harassment of debtor on the phone
                Charges on bounced DDs or cheques
                Imposing an overdraft on a basic account
                Charges on paid DDs or cheques
                Treating bank-imposed charges as unauthorised - (RBS has already conceded as a "gesture of goodwill" on this BCOBS point)
                Levying charges upon charges - (RBS has already conceded as a "gesture of goodwill" on this BCOBS point)
                Failure to accept instructions not to make further payments on a credit card/debit card number
                Refusal to cancel DD instruction
                Refusal to offer basic bank account without good reason
                Charging more than cost for duplicate bank statements - £5 fee is probably unfair
                Failing to supply bank statements on accounts in difficulty where account fee is still paid
                Reneging on an instalments agreement by, for instance, by beginning recovery measures directly or through an agent while the agreement is in place.
                Insisting on payments being made only in some particular form such as by direct debit - and refusing to accept payments made by some other method, for instance Standing order.
                Suing your bank in these circumstances is usually a relatively straightforward County Court action

                If you really want to teach your bank a lesson that unfairness doesn't pay, then prove a breach of FSA regulations and then use that to challenge the fairness of the relationship under s.140A Consumer Credit Act. The effect of this could be to have the entire loan declared unenforceable.

                I cannot advocate that people should avoid their legitimate debts, but on the other hand if it takes some debt avoidance to persuade the banks to start behaving themselves and to stop bullying their customers - then so be it.


                Methinks more research is needed by yours truly....any comments anyone?


                Best wishes to all:

                Dougal
                What about a Bank forging LOAN AGREEMENTS.:beagle:

                Comment


                • #9
                  Re: BCOB Regulations

                  Originally posted by Streetwise View Post
                  What about a Bank forging LOAN AGREEMENTS.:beagle:
                  Lending is not not covered by these regulations. I would have thought forgery comes under totally different criminal legislation. Havea look at the Frogery and Counterfeiting Act 1981.

                  I've left the original to give people a laugh. I did of course mean Forgery, not Frogery! lol :-)

                  Comment


                  • #10
                    Re: BCOB Regulations

                    Originally posted by labman View Post
                    Lending is not not covered by these regulations. I would have thought forgery comes under totally different criminal legislation. Havea look at the Frogery and Counterfeiting Act 1981.

                    I've left the original to give people a laugh. I did of course mean Forgery, not Frogery! lol :-)
                    Morning all,

                    Can we just step back and consider this:

                    I understand that the High Court decided that the fees and charges could not be assessed for fairness under the UTTCR. ......BUT nothing was said about BCOB Regs, and indeed the 'door' seems to have been left open by the High Court for an alternative path to be sought.

                    The question of lending is not referred to in the BCOB, ...BUT the critical point (in my humble view) is that the BCOB Regs relate to the Bank treating customers fairly...now I believe that this is intended to refer to all Banking matters, which would by definition include lending and any associated 'fall out', e.g.: going into the red, insufficent funds for DD and other charges and so on.
                    Just my musing perhaps...but what do you think?

                    Best wishes to all,


                    Dougal

                    Comment


                    • #11
                      Re: BCOB Regulations

                      Originally posted by Dougal16T View Post
                      Morning all,

                      Can we just step back and consider this:

                      I understand that the High Court decided that the fees and charges could not be assessed for fairness under the UTTCR. ......BUT nothing was said about BCOB Regs, and indeed the 'door' seems to have been left open by the High Court for an alternative path to be sought.

                      The question of lending is not referred to in the BCOB, ...BUT the critical point (in my humble view) is that the BCOB Regs relate to the Bank treating customers fairly...now I believe that this is intended to refer to all Banking matters, which would by definition include lending and any associated 'fall out', e.g.: going into the red, insufficent funds for DD and other charges and so on.
                      Just my musing perhaps...but what do you think?

                      Best wishes to all,


                      Dougal
                      Treating Customers Fairly has always been part of the situation. BCOBs came into effect on 1st November 2010 which was after all the evidence was subimitted and they considered whether the OFT could assess charges under UTCCR's.
                      "Family means that no one gets forgotten or left behind"
                      (quote from David Ogden Stiers)

                      Comment


                      • #12
                        Re: BCOB Regulations

                        Originally posted by Dougal16T View Post

                        The question of lending is not referred to in the BCOB, ...BUT the critical point (in my humble view) is that the BCOB Regs relate to the Bank treating customers fairly...now I believe that this is intended to refer to all Banking matters, which would by definition include lending and any associated 'fall out', e.g.: going into the red, insufficent funds for DD and other charges and so on.
                        Just my musing perhaps...but what do you think?

                        BCOBs only applies to the deposit taking activities of banks.

                        ''BCOBS applies to firms with respect to the activity of accepting deposits from banking customers, carried on from an establishment in the UK''.

                        FAQs

                        It is the OFT who regulate credit and therefore overdrafts.

                        Using BCOB's to take bank charges claims to court - as JudgeFodder suggests - is about as much use as tits on a bull.

                        The idiot is even recommending using BCOBs to litigate delays in PPI refunds and calling people ''mugs'' for not doing so.

                        Warning over PPI dispute delays!!

                        He is disturbingly unhinged.

                        Comment


                        • #13
                          Re: BCOB Regulations

                          Just to confirm the above:

                          ''PSD and BCOBS bring into force a new FSA banking conduct regime while at the same time replacing the non lending aspects of the Banking Code. The new banking conduct regime does not apply to all banking retail products, with credit cards and other consumer debt continuing to be regulated by the OFT in tandem with the new industry led “Lending Code”.
                          ''

                          http://www.morton-fraser.com/assets/...ulletin_v4.pdf



                          ''BCOBS will not cover all retail banking products and, for example, overdrafts and credit cards will fall outside the scope of BCOBS and continue to be regulated by the OFT.'''

                          Financial World Online

                          Comment


                          • #14
                            Re: BCOB Regulations

                            HI
                            I thought BF was referring to the refunds of processed PPI claims and the delays in payment by the banks.
                            I would have thought he would be correct in that this would be actionable under the BCOB. Section 5.1
                            Peter
                            Last edited by peterbard; 11th January 2012, 09:55:AM.

                            Comment


                            • #15
                              Re: BCOB Regulations

                              Originally posted by peterbard View Post
                              HI
                              I thought BF was referring to the refunds of processed PPI claims and the delays in payment by the banks.
                              I would have thought he would be correct in that this would be actionable under the BDOB. Section 5.1
                              Peter
                              Peter, which specific part of BCOBS 5.1 are you referring to?
                              "Family means that no one gets forgotten or left behind"
                              (quote from David Ogden Stiers)

                              Comment

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