It is time I think to introduce you to a Committee which directly and specifically links the FSA, the OFT and the FOS - a co-ordinating committee. It was formed after discussion and consultation in February 2011. Very late in the day some might suggest.
Despite its relatively recent appearance, it may prove to be a pivotal body in reaching an answer as to whether bank charges are fair or unfair - not least because it is a committee on which all three of those bodies get together, but more importantly because of why they get together.
Let me explain.
Via this link you will find the Terms of Reference for the co-ordinating committee -
Let's look at some extracts (some of which I have highlighted and will give an explanation for so doing in my next post):
Coordination Committee
terms of reference
Functions
1. The main functions of the Coordination Committee (CC) are to:
(a) contribute to the identification of emerging risks that have the potential to
cause widespread detriment amongst financial services consumers;
(b) coordinate consideration of whether:
o emerging risks with the potential to cause widespread detriment should
be dealt with through firms’ complaints handling and the Financial
Ombudsman Service (ombudsman service) or through regulatory
intervention by the Office of Fair Trading (OFT) or the Financial
Services Authority (FSA);
o risks that are causing widespread consumer detriment should continue
to be dealt with by firms’ complaints handling and the ombudsman
service or through regulatory intervention by the OFT and FSA;
(c) promote alignment between the OFT’s or the FSA’s response to emerging
risks and widespread issues and the ombudsman service, with regard to the
potential differences between the regulatory approach and how the
ombudsman service is required to deal with individual complaints;
(d) promote alignment in key communications about the positions of the
ombudsman service and the FSA or OFT in the handling of emerging risks
and widespread issues; and
(e) contribute to the effective exchange of information between the FSA, OFT,
and ombudsman service.
4. Membership of the CC will comprise the FSA’s Conduct Risk Division, the
Executive Director of the OFT’s Markets and Projects Group, and the ombudsman
service’s Decisions Director. Each member will be accompanied by no more than
two other persons. A Director at the FSA will be the chairman.
Procedures
6. The CC will meet at regular intervals, at least four times a year. The CC will meet on
an urgent basis outside of scheduled meetings if, in the opinion of the member
seeking the meeting, it is necessary in order for the committee to fulfil its functions.
7. The CC will invite any person to take part in considerations that are consistent
with the discharge of the committee’s functions.
8. The CC will make public the issues it has considered. It will also make public the
actions taken by the FSA, OFT and ombudsman service where they relate to the
committee’s considerations.
9. Information sharing within the CC will be subject to the restrictions set out in the
memorandums of understanding between the FSA, the OFT and the ombudsman
service.
************************
Those of you following this blog will already know that earlier I used this test:
Test 3: Evidence that the Concordat agreed between the Financial Services Authority and the Office of Fair Trading established the basis for real consumer detriment and serious regulatory failings.
Item 9, the last item in those extracts above makes clear mention of such Memoranda of Understanding. There have been so many I have described them as a blizzard (earlier posts on this blog will justify that description)
Might it be that this new committee is a way of seeing through that blizzard, and reaching an answer over bank charges, and whether they are fair or unfair?
One would hope so, particularly when the opening paragraphs to the terms of reference for the committee read as:
1. The main functions of the Coordination Committee (CC) are to:
(a) contribute to the identification of emerging risks that have the potential to
cause widespread detriment amongst financial services consumers;
You don't need to look very far, or google for very long using "bank charges" as the two words involved to find that literally millions of individuals have been affected by the imposition of bank charges.
So, is help available at long last? Will this committee recognise the effect of bank charges on those millions of individuals, and offer an answer to what is essentially a very simple question:
Are bank charges fair or unfair?
Please always bear in mind the earlier evidence in this blog of what the Supreme Court said in their Press Summary:
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.
So have we now seen a body formed, albeit late in the day, that will look at that simple question - and then answer it?
We need to look at the first set of "Minutes" from the co-ordinating committee to see what they have, and have not, indentified as emerging risks that have the potential to cause widespread detriment amongst financial services consumers.
Sadly might it be that the co-ordinating committee, comprising the FSA, the OFT and the FOS are but the latest example where their efforts, or lack of them, have yet again established the basis for real consumer detriment and serious regulatory failings. It would be quite something if there were "evidence" that was the case, would it not?
Did they identify "bank charges" in that category? Were they aware of the millions affected by bank charges, who wanted an answer to that simple question?
Crucially, why - given that the Supreme Court cannot have made it any clearer that their decision was in no way related to answering the question of fairness or otherwise -surely the issue of bank charges and its effects on millions of people, surely that simple question would appear on the committee's radar? Surely?
It really would be quite something if there were "evidence" that it was not considered at all. would it not?
Ironically, perhaps, even more important would be to understand why - if indeed it was not addressed.
The next - set of posts - will let you have the "evidence" you need to answer those questions. Starting with those first set of "Minutes".
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