Brunelfranklin.com Urges Fsa To Lift Bank Charges Waiver
Leading consumer champion BrunelFranklin.com has written to the FSA and FOS about the scandalous injustice that has been done to millions
Leading consumer champion BrunelFranklin.com has today written to the FSA and FOS about the scandalous injustice that has been done to millions as a consequence of recent actions taken by the FSA and FOS, following the instigation of a Test Case relating to bank charges by the OFT.
In essence, the banks continue to charge with impunity, whilst the consumer is deprived of all avenues of redress, in that:
a) The Waiver granted by the FSA permits banks not to process new or existing claims;
b) FOS will not review appeals;
c) The courts will stay proceedings against the banks
The letter from Brunel Franklin asks the FSA to immediately revoke the Waiver in the consumer interest. It also outlines 12 further points that seriously affect consumers’ rights.
Anthony M Sultan, managing director of BrunelFranklin.com and conkersclaims.co.uk , said:
“We are urging the Regulators to revoke the Waiver which is scheduled to be reviewed two months after it was imposed on 27 July, ie: on or around the end of September.
”The banks have mistreated customers outrageously in their charging strategies, which have already been proven to be unlawful. No doubt the High Court will find in favour of the consumer in the Test Case and the banks charges will be pronounced unlawful once and for all. Many of the banks have admitted to us directly that they believe the High Court will find against them, and hence any action by the banks in the short-term is nothing more than a stalling tactic, a stay of execution, an attempt to limit losses and short-change the consumer out of the redress they are entitled to.
”We have also asked the FSA and FOS for an urgent response to 12 points outlining specific and serious injustices affecting millions of consumers.
”In terms of the FSA and its role in this injustice, the Waiver is manifestly unfair and consumer rights have effectively been frozen; the Waiver should be withdrawn immediately. The Waiver granted to the banks by the FSA is not fair and reasonable - in fact it goes against common justice; how on the one hand can consumers lose any chance of redress, whilst the banks can continue charging the exorbitant fees from which the FSA is supposedly trying to protect the consumer?
”Banks should not be able to continue charging during the Waiver. What is the FSA doing to prevent banks making unlawful charges in the interim? Several banks are beginning to dress up these unlawful charges so they look different, but they still have a similar net effect on the consumer. As recently as this weekend, The Sunday Times highlighted this practice of stealth charging by the banks. The FSA needs to rule on this and stop this unfair practice by the banks, immediately.”
Notes to editors:
The 12 points referred to in BrunelFranklin.com’s letter was addressed to Sir Callum McCarthy and Sir Christopher Kelly, and copied to all Members of Parliament are:-
A1) Banks shouldn’t be able to continue charging during the Waiver.
Banks should not be allowed to continue adding exorbitant charges whilst this Waiver is in place. What is being done to prevent banks making unlawful charges in the interim?
A2) Additional interest should be paid by the banks to the customers to cover the delay in refund of unlawful bank charges over the period that the Waiver is in operation.
A3) Clarification is needed on the six year claim period. I.e: the Waiver period shouldn’t ‘roll’ the six years claim window – the Waiver period should be added to the six year claim period.
Where claims are lodged but not processed due to the Waiver, assurance is required that six years’ worth of bank charges up to the time of the lodging of the claim - and for a further period, from the date of such lodgement to the time of resolution of the claim - shall be due to all claimants.
A4) Consumers should be advised by the FSA/banks that it is in their interests to submit claims immediately, rather than await the outcome of the Test Case/lifting of the Waiver.
The whole area of redress is being abused by the banks. We have summarised below 6 areas of abuse that we urgently request the regulator of the banks (The FSA) and the consumers’ arbiter (The OFT) to act upon, taking such immediate steps as are required to stop the banks from continuing these abuses.
B1) Acceptance forms should be standard and should not include onerous and unfair clauses.
Acceptance forms from banks to consumers must standard in nature, and be fair and reasonable. These forms should not contain onerous and unfair terms and conditions – such as excluding the client from making any future claims. It is a fact that even though banks are offering payments in respect of past unlawful charges, they continue, following such a payout, to charge equally unlawful charges going forward (at the same rate!). The wording on an acceptance form should not preclude the consumer from making further claims as this goes against common justice. Only this week, a bank has refused to make payment to a consumer, even though the consumer has signed the bank’s acceptance form – until the customer signs another acceptance form with revised wording.
B2) No automatic rejections should be allowed; no “50% offers” or any offers lower than the consumer is entitled to should be allowed. Every consumer should be made a fair offer by the banks at the first time of asking. Banks should undertake to review each case on its merits, and not issue blanket rejections as a matter of policy (e.g. Halifax). We understand that a very high proportion of customers receiving these blanket rejections do not pursue the case further. This is clearly a ploy by the Halifax to minimise compensation. Similarly, blanket policies such as only offering 50% of the claim after the consumer has appealed against an initial rejection should not be allowed. Fair redress based on agreed principles should be offered to all consumers by all banks on an equal footing, on submission of a valid claim.
B3) A standard method of redress calculation should be introduced across the board so that all consumers get the same calculation method no matter which bank is making the calculation.
Different banks follow different policies regarding repayment of bank charges. They have one thing in common – pay out as little as possible. Up to the time of the Waiver, Barclays for example would pay out around 75% of the charges in response to a complaint. Halifax, on the other hand would issue a blanket rejection. After further negotiation they would make a small (relative to the charges levied) ‘goodwill gesture’. Further appeals would result in this increasing, the final percentage payout being determined by the individual Halifax case handler – the resultant redress figure being down to the skills and persistence of the two opposing negotiators. In mid July, Halifax reduced their final offers to 50%. Lloyds are currently offering goodwill gestures of around £750 on cases involving charges of around £3,500.
B4) No ‘Gestures of Goodwill’.
All offers from the banks should be made in accordance with a standard method of financial redress and should be presented as such - there should be no hiding behind ‘gesture of goodwill payments’ as a method of circumventing a standard method of calculating financial redress. ‘Gestures of goodwill’ and /or any other misleading terminology used by banks are deliberate ploys to minimise losses and short-change customers. …/cont
B5) Any direct, unilateral payments by banks should be interim payments, and not subject to withdrawal at a later date.
Any direct payments unilaterally made into a client’s bank account should only be considered as an interim payment and the banks should not be allowed to withdraw this amount at a later date. Halifax has recently written to clients saying that “not responding following receipt of a unilateral payment” will be “deemed as an acceptance” by the customer.
Some weeks later, the same Halifax customers receive further communication stating that if they have not responded following the unilateral payment, they will consider the offer to have been “rejected”. Halifax changing its stance is both unfair and unethical, and only serves to add confusion and bamboozle the customer. This practice goes against the bank’s duty of care and consumer fairness, and should be stopped forthwith.
B6) No Reprisals
Banks should not be permitted to close bank accounts or threaten to close them or remove overdrafts due to a consumer reclaiming excessive bank overdraft charges. We therefore urge you to consider the foregoing points as a matter of urgency and take whatever steps possible to protect consumers from this great injustice.
C1) FOS should give a clear, unambiguous policy on hardship cases – one that it will actually enforce rather than just talk about.
On a daily basis, customers tell us of the financial hardship they face. The Waiver granted to the banks is exacerbating these genuine hardship cases. Whenever hardship is raised, claims to the banks are dismissed and the ombudsman is no more receptive. It should be remembered that the Banking Code talks specifically about financial hardship (*see excerpt below from the Banking Code below). In one very recent case, the Ombudsman was asked to expedite a genuine hardship claim and it was refused point blank. The client went bankrupt shortly thereafter. We have exchanged a number of emails with FOS helpdesk about definition of hardship, their response is always in vague terms, and therefore we are unable to pin them down when they reject hardship cases. What constitutes hardship? If most reasonable people would accept it is a hardship case, surely FOS should arrive at a similar decision?
C2) FOS should give binding advice to consumers on its helpline, rather than the current smokescreen approach which offers consumers no real advice or guidance of any value.
FOS’s technical ‘helpdesk’ provides little or no direct answers for consumers. This is a direct, recent quote from a FOS helpdesk representative: “Any guidance given by FOS on this helpdesk line is informal. FOS cannot be bound by it if the case is referred here. Any advice should not be quoted.”
Why will FOS not give a definitive answer to consumer questions posed of their technical helpdesk? If FOS won’t give such definitive responses, who will?
A full copy of the letter is available from BeyondPR on
07930 697773, e-mail info@beyondpr.co.uk
www.beyondpr.co.uk
*The Banking Code sets out in paragraph 14.1 that customers will be considered to be in financial difficulty when “income is insufficient to cover reasonable living expenses and meet financial commitments as they become due. This may result in a change of lifestyle – often accompanied by a fall in disposable income and/or increased expenditure – such as:
-loss of employment
-disability
-serious illness
-imprisonment
-relationship breakdown
-death of a partner
-starting a lower paid job
-parental/carer leave
-starting full time education”
Paragraph 14.2 of the Banking Code requires subscribers to the Code to “try and assist customers in financial difficulties”.
NB: The FSA newsletter of 27 July 2007 takes this issue a step further, stating that “Banks and building societies will have to conduct a filtering process to ensure that cases of genuine hardship are still dealt with during the Waiver period. Cases of hardship would still be entitled to be referred to, and dealt by the FOS.”
It is therefore clear that if a customer can show that their financial circumstances are such that their income exceeds their reasonable living expenses, the matter may still be referred to the FOS if the bank fails to adequately deal with the matter.