Bank Charges - Test 3. Part 3

... continued.

I ended my last post with this question, " Can you trace anywhere a comment from Lord Turner or the FSA which tells you, tells anyone, what their view or opinion is over whether Bank charges are fair or unfair?"

I also showed in my last post that the FSA were one of the named parties in the test case that the OFT brought, but for whatever reason the FSA chose not to play an active part in the court proceedings from the outset.

Are those two items connected?  That is what I am looking at in 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.

Consider this - before the test case was instigated, and before - in tandem - the FSA introduced their "Waiver" (something I will deal with in very great detail in a later post), those who felt that their individual Bank charges were unfair were asking for their money back, and many were receiving it back, usually stated by the Banks as a "goodwill gesture".  And yes, some did not succeed in getting any money back. 

I can find no wholly reliable statistics on the amounts involved, but before the start of the test case, I think it is reasonable to suggest that Banks had already refunded around £500 million in charges to more than 350,000 customers.

Again it is an estimate, and may not be reliable, but again I think it can be reasonably stated that overall the Banks were facing the possibility that they may have been liable to refund up to £1 billion in charges.

Let's say that £1 billion is at the top end of a scale, and again some individuals would have gained some money back, even if described as a "goodwill gesture", and others would not.  Given the situation now, is it possible to suggest that it may have proved better for the OFT never to have taken the matter to the Courts?

Especially so, when all the individuals affected had an alternative route available through the Financial Ombudsman Service (FOS) whose regime is to seek the resolution of a dispute or complaint, avoiding entirely the need for taking the matter to Court.

You may claim that I make that comment with the benefit of hindsight, and yes, that is true, but remember what I am testing (as above), and let me ask you what were amongst the reasons given by the OFT in bringing the test case.

This was the document. involved. This is an extract from that document:

"C.  ... The scale of the customer litigation causes increased expense for all litigants as well as the Courts and presents significant administrative problems for the Courts in handling such cases ..."

I leave this to you to assess for yourself, but if I suggested, for me - (and take into account my earlier reference to the FOS and that it is a free service):

- there seems to be an emphasis on administration rather than on whether millions of ordinary people should be allowed to pursue justice for themselves

- yes, if each individual pursued their claim through the Courts, rather than the FOS, there were indeed costs. Those costs were at an individual level for the ordinary person, but they were at an aggregate level for the Banks. 

Ask yourself - should there be a wholly unlected authority who can deprive any individual of their legal rights? 

Ask yourself - on the question of eventual costs - who stood to lose most?

Ask yourself - at that point in time, whose interests do you believe might have been best served by the OFT decision, particularly when backed up and strengthened by the FSA decision to issue their "Waiver"? (I repeat much more on that later).

- The Courts had their administrative burdens relieved.

- The Banks had any cases through the FOS frozen, and any actions through the Courts stayed.

- The FSA, apart from the waiver, were nowhere to be seen.

- Each and every ordinary person claiming unfairness over the Bank charges they had paid were, in an instant, deprived of their rights to pursue their claims by whatever means they chose.

Who gained, who lost, as a result of that OFT decision?

But was it solely an OFT decision?  The FSA played one very significant part in those events, the issue of the Waiver. Two regulatory bodies acting in diverse ways, but in concert one with the other, to produce the situation I have just outlined.

What is it in the nature of their relationship, that allows them:

-  complete control over the rights to justice of ordinary people,

- and the power to halt Courts of Justice stone dead in their tracks!  Something not even Governments find easy to do.

Powers that can achieve those forms of results, powers of that magnitude, which control and dictate the rights of individuals, and can summarily prevent access to Courts in the pursuit of justice - are they not normally reserved to dictatorships?

I will look at that Concordat again in my next post - I hope by now you may realise it plays a very significant role in this whole matter. It may indeed have been the single most important factor in causing real consumer detriment. Test 3 may reveal that - the evidence follows.

PS:  Anyone heard an answer yet?

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?
 
Nope, didn't think so!