Bad news for Business Claims re Penalty Charges

[Tools]

As the judge has ruled the penalty charges argument does not apply to current terms in personal current accounts, this causes ambiguity in the relevance of the arguments for reclaiming charges applied to business accounts.

The UTCCR does not, as we know, apply to business accounts.

[Celestine]

Re: Bad news for Business Claims re Penalty Charges

Hmmmmmmm.........thats not good potentially.

[ed.]

Re: Bad news for Business Claims re Penalty Charges

Disagree, the ruling on penalties applied stricktly to new T&C's.

Historicals haven't yet been ruled on.

Also Ltd companies above, yes UTCCR is definitely out. Small partnerships, and lower a good argument can be made.

[Amethyst]

Re: Bad news for Business Claims re Penalty Charges

Historically I agree and we will find out further on 22nd May see who, and what is, appealed

[ed.]

Re: Bad news for Business Claims re Penalty Charges

Also - there's no real read across from PCA to Bus accounts, the same as no read across occurred with the CC investigation.

[Tools]

Re: Bad news for Business Claims re Penalty Charges

OFT Test Case - Legal Beagles

Importantly, the 1999 Regulations only apply to consumers. Anyone who is operating a business account can only rely on the “penalty charges” argument, which states that such penalty charges are unenforceable at common law. However, the judge in this case ruled that the charges imposed on current accounts did not amount to “penalties”. This is because they are not brought about as a direct result of a breach of contract, but rather the provision of a loan (i.e. the unauthorised overdraft), even if that loan is a result of a breach of contract. I must confess I do not quite follow this line of argument, and you should read paragraphs 295-324 to gain a better understanding of the rationale for this part of the decision.

The effect of this decision is to render any claims by businesses, large or small, against the imposition of these charges, bound to fail on that basis. It may be that this consequence is an unintended consequence of the judge’s ruling; there was certainly no reference to business accounts that I could find in the judgment. It may be that the OFT will appeal this specific point, and it is hoped for the sake of many small businesses that they do appeal that point.

[ed.]

Re: Bad news for Business Claims re Penalty Charges

I replied on that thread with a counter argument aswell lol

Again Smith ruled that charges on current accounts 'under their new and recently revised personal account terms and conditions' could not be considered penalty fees.

[Vortex]

Re: Bad news for Business Claims re Penalty Charges

I think we need to be clear in that the OFT case was on personal acount terms and conditions and not businesses. I have said on another thread I have not read the judgement yet but I think a fuller analysis may reveal more. From my reading of the forum arguments across the threads,so far, I think the OFT need to appeal aspects of the judgement.

[Glenn UK]

Re: Bad news for Business Claims re Penalty Charges

Seems to me that this would be a really ironic judgement if it was applied to historical terms where in some cases the T&C specifically states that the charges are levied upon the breach of contract.

not only do their T&C state this, but the defences received from Abbey in claims made under these T&Cs argue that the charges are fiar and propritonal rather than not penalty charges.

And i agree with the arguments re the business, business accounts would not one presumese be under the same T&C as a personal account.

Sorry if i have missed this, is there any judgement due on historical terms and if so any ideas when?

thanks all

Glenn

PS hello to you all, and you thought id gone didnt you??? ROFL

[Amethyst]

Re: Bad news for Business Claims re Penalty Charges

22nd May the discussion will be had re looking at historical terms.

Come on man get with it

Good to see you here xxxxxxxxxxxx :kiss: