The crucial evidence - eventually - is:
1) to identify, without exception or qualification, the regulatory role of the FSA in the matter, and
2) the FSA's firmly established position on "fairness" when it comes to charges.
In the posts which follow I will offer the evidence against both of those items, and will continue to repeat this:
Let's ask Lord Turner and the FSA this very simple question:
Do you believe that the charges levied by Banks on their customers were and are fair or unfair?
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For reasons which I will explain - in full - later, I intend to offer evidence against item 2) first.
Let me just say for now that in repeating that very simple question to Lord Turner and the FSA throughout this blog, I already know that there is substantial evidence that they have already answered the question in the most fundamental way possible.
Now, that is not true to the extent that is necessary, because the evidence I will submit below relates to the FSA treatment of charges which in themselves do not involve bank charges. However that qualification equally applies to all those who have any authority to adjudge the fairness or otherwise of the charges levied on customers.
The OFT have not answered the question, Parliament has not answered the question, and the highest Court in the land has not answered the question. It's not just the FSA - no one has answered the question!
Just in case, let me remind you of two important items which support why I am emphasising, perhaps even over-emphasising, the complete void over an answer to what is a simple question - what is fair?
Firstly this - what Lord Turner once said to the Treasury Select Committee, he said " there was a clear legal decision "on the issue over bank charges.
Secondly this - two extracts from the Press Summary issued by the Supreme Court in November 2009, let's make sure we know (before we go further) exactly what that clear legal decision was:
"This appeal involved a relatively narrow issue. The Supreme Court had to decide not whether the banks’ charges for unauthorised overdrafts were fair but whether the OFT could launch an investigation into whether they were fair.
Lord Walker made clear that the scope of the appeal was limited – the court did not have the task of deciding whether or not the system of charging current account customers was fair, but whether the OFT could challenge the charges as being excessive in relation to the services supplied in exchange (Paragraph 3). As Lord Phillips stated, even if such a challenge was not possible, it might still be open for the OFT to assess the fairness of the charges according to other criteria (Para 61)."
So, please be very clear that the question over whether bank charges are fair or unfair has never had an answer, none, nada, zilch, from anyone (with the legal authority to do so) alive or dead in the entire history of mankind.
I hope this blog will play its part in changing that position, and we do get an answer to a very simple question.
How? Well there is extensive evidence which can be provided on how the FSA address the question of fairness in respect of charges - and specifically those which arise in an identical manner to bank charges
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Let's have a look at this evidence, and allow you to form your own opinion. As you may have surmised I already have my own opinion formed, both emphatically and for quite some time.
For instance, read the following comments, how do they begin to shape your opinion?
" ...a number of serious failings were identified in relation to its dealings with customers. These include ... .excessive and unfair charges for customers that did not reflect administration costs."
" ... The FSA has identified a number of serious failings. These include: Applying charges to customers' accounts that were unfair and/or excessive. These were: A fee for a returned direct debit which was charged regardless of how many times the direct debit had already been returned unpaid."
" ... and applied charges that were unfair because they were charged repeatedly or did not accurately reflect the cost of administering an account in arrears."
''... Firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged by their failings.''
" ... the FSA will take robust action where it sees that customers are not treated fairly. Retail firms which fail in their obligations to customers should expect not only a substantial fine but also that they will have to pay back customers who have been disadvantaged."
" ... The case sets a precedent, with the FSA concluding this investigation in a matter of weeks, and the firm working with the FSA to agree a process to enable customers to receive redress as quickly as possible."
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Those who know this blog well, will know I do not offer extracts without including links to the source. The opening "highlighted" items above demonstrate that practice. This is my first exception - but it is wholly temporary.
In my next post, I will include the links to the source material for each of those comments. For now let me just say that they are all comments from the FSA.
I asked how they might begin to allow you shape your opinion. At a minimum I think they may show you that the FSA are no stranger whatsoever to deciding on what is fair or unfair, and in taking appropriate action, when they deem something to be unfair, and what the ingredients that constitute unfairness involve.
Each item (and you will have full access to the items in the next post) involves circumstances where the FSA have dealt with cases that relate to charges. Charges which they declared to be unfair and which resulted in fines for the Companies involved and redress for the clients and customers who were affected.
It is also important to note, as you will see, that not one of those cases involved court action on the part of the FSA.
That stands in stark contrast to the expensive exercise undertaken by the OFT in their attempt to even gain the opportunity to look at whether charges were fair or otherwise - an opportunity eventually denied to them by the Supreme Court.
Am I forgetting item 1) to identify, without exception or qualification, the regulatory role of the FSA in the matter?
Nope, not for a second, but first let's firmly establish whether you, just like me, believe (based on evidence drawn from the FSA) that they have more than sufficient experience to answer this question:
Let's ask Lord Turner and the FSA this very simple question:
Do you believe that the charges levied by Banks on their customers were and are fair or unfair?
Once we establish that position, we can then identify why a question they were legally obliged by Parliament to answer (by virtue of the Financial Services and Markets Act) has not been addressed by them, let alone answered.
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