Beagles response to PCA report (OFT)

[Amethyst]

Legal Beagles have recently submitted a formal response to the Office of Fair Trading 's consulation on their market study into Personal Current Accounts.

Their report can be read in full here OFT PCA REPORT

Our response is attached in PDF format below.

We'd like to take this opportunity to thank Tom Brennan for putting everything together and all our team, everyone on Beagles, and members from across the various forums who have contributed to the response. Everyones input has been greatly appreciated. Also thanks to the OFT for their consideration and for enabling Beagles members to meet with them to discuss the content of the report.

It is quite long, 26 pages overall, but if you do get bored at bedtime then it is most definately worth a read.

We hope the report puts forward views held by a large proportion of consumers and members of all consumer sites.

Many thanks, all comments welcome and appreciated

Ta

Ame

xx

[Budgie]

Excellent work and congratulations to everyone who has been involved in any way, shape or form with the generation of this document.

Am extremely proud of this work which I believe is the only submission being made to the OFT by a web based Consumer Group.

Long Live Beagles

[ed.]

Ame - the link to PCA report is coming up as page moved on the OFT site.

http://www.oft.gov.uk/advice_and_res...tions/personal seems it's now here.

[Amethyst]

humbugs lol Thanks ed. will amend first post

[ed.]

:hohoho: I'm forever going through PAG OFT links because they keep moving things lol You're not the only only one they catch out PMSL

[Smasher]

Well done all & thanks Tom.

[EXC]

Originally Posted by Budgie

Excellent work and congratulations to everyone who has been involved in any way, shape or form with the generation of this document.

Am extremely proud of this work which I believe is the only submission being made to the OFT by a web based Consumer Group.

Long Live Beagles

You bet. And a big thanks to Tom, Atlas Chambers and FSI who all waived various fees in commisioning the work for us.

[Amethyst]

Some extracts from the PCA report

Beagles 'Wish List' for future PCA's

• 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.

and the Conclusions we came to:

7. 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.

[natweststaffmember]

I wish I had read that PCA bit quoted, first bit at least Amethyst.
Sorry, but I have spotted some stuff that is bugging me, as I said, I should have, could and didn't read the report as yet and therefore I could have and should have put more of an input into it apart from minor comments on the dicussion. Can I quote stuff from above or should I just shut up and leave it be?
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It's about the wish list ONLY.

[Amethyst]

Well read it now, and read the following paragraphs Then comment to your hearts content

[natweststaffmember]

Am reading the perfect bank account thingy. So I am currently at page 17.
The suggestions for it are difficult to do. The FSA already recommend "account reviews" already which I should add are slated across most internet forums as Sales related yet there are elements within that that deal with the health check idea. I don't understand the simple account opening bit because those rules are guided by again the FSA albeit the list of acceptable identificiation could be uniform in make up. Being able to contact your branch, that already happens within RBS Group and HBoS, however there has to be back up within the call centre environment because you simply cannot answer 100% of the telephone calls to the branch, in fact NatWest are targetted to answer 75% of their phone calls. UK based call centres is an economic rather than the norm. If you want to vote with your feet then you move to RBS Group who ONLY have UK based call centres and I believe HBOS Group.

Will carry on reading it.
------------------------------- merged -------------------------------
I believe text alerts already exist but yet again in many of the debt forums, many posters do not want anyone to have their mobile phone number.
------------------------------- merged -------------------------------
5.6 is utter nonsense. Letter from DWP is acceptable

[Amethyst]

Nats, I tried to open a basic Natwest account, I had just moved so had no bills at my new address in my name, and the letter from the DWP was turned down cause it didnt have my middle name on it. So guess what, I don't have an account with Natwest.

:gingerbreadhouse:

[natweststaffmember]

What was the other form of identification?

[Amethyst]

Passport

[natweststaffmember]

Then the branch got it wrong, imho. The ID and the address ID have to match. That branch got it wrong. I think that kinda goes with another part of the PCA which is about different things being asked for even if it is within the same group of companies.

[Amethyst]

Indeed...self regulation doesn't work. Sharp pointy sticks required.

[EXC]

These are the 'next steps' in the consultation process:



Next steps

We will collate responses to the consultation and publish a formal summary of these. Depending on the outcome of the consultation we hope to publish a further or final report early in 2009.

Our aim is for a final report containing recommendations that the banking industry, in consultation with government and other relevant stakeholders, will take forwards. However we will also consider other routes to implement remedies should that not happen.

There are several routes we will consider and would welcome feedback on:

• changes to the Banking Code
• recommendations to government or regulatory bodies, and
• a market reference to the Competition Commission.

Separately, we will also be considering whether failure to adopt any particular future recommendations could lead to enforcement under the UTCCRs or the Consumer Protection from Unfair Trading Regulations 2008. Naturally, we would give the businesses the opportunity to remedy any breaches of the law we identified before taking enforcement action.

Data use statement for responses

Please note that we may choose to refer to comments received in response to this consultation in future publications. In deciding whether to do so, we will have regard to the need for excluding from publication, as far as that is practicable, any information relating to the private affairs of an individual or any commercial information relating to a business which, if published, would or might, in our opinion, significantly harm the individual's interests, or, as the case may be, the legitimate business interests of that business ('confidential information'). If you consider that your response contains such information, that information should be marked 'confidential information' and an explanation given as to why you consider it is confidential. All information received is subject to Part 9 of the Enterprise Act 2002.

[EXC]

This is the Financial Services Consumer Panel's response to the OFT Market Study.

The FSCP represents consumers in the FSA but has very little clout.

http://www.fs-cp.org.uk/

Although I'm bound to be biased, if this is a general indication of the quality of responses, our effort is in a different league. At two and a half pages in length it must have taken all of 20 minutes to knock up.

[Budgie]

I totally agree Exc.

Should we be approaching the OFT for a follow up meeting ?

Budgie

[Amethyst]

I think wait until they have published their findings on the responses, which they should be doing before April.

[EXC]

I agree. Then we'll have something to discuss.

[Celestine]

April/May would be a great idea for a return visit.

I'm sure any other submissions will significantly mirror or compliment our own report.

They certainly seemed keen to have us come back to discuss progress.

[Amethyst]

Just a bump as when the judgment is handed down, or even before, there are some additions I think we can make to this reference taking the hardship stuff forwards and I will contact the OFT and check if they will still accept further submissions.

BCOBS actually seems to reduce banks requirements to treat hardship any differently. and that needs looking at.

Also a reminder that we were going to work on a brief response to the 'transparency' consultation.