... continued.
A quick reminder of where we are: 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.
However, I also want to give you a quick (but perhaps vital) reminder of something I mentioned in an earlier post. This is an extract from Test 1: Evidence that the Financial Services Authority regard "Treating Customers Fairly" as fundamental.
"The BCSB website has now been closed. On 1st November responsibility for the regulation of deposit and payment products transferred to the Financial Services Authority."
The 1st of November referred to on that closed site was the 1st of November 2009. That date could prove important.
- Just keep in mind - for now - when the Supreme Court decision was announced. You don’t remember? It was the 25th of November 2009. The FSA took up the reins of responsibility from the BCSB in advance of that decision, and without any knowledge of what that decision was eventually to be. That gap of 20 or so days has an importance I will explain later."
The explanation as to why that may prove important will still follow later, but for now I just want you to remember (in what is a long series of posts and evidence) that the FSA took on the primary regulatory responsibility for Banks and Banking on that date, and in advance of anyone knowing what the Supreme Court ruling would prove to be - a ruling which did NOT determine whether Bank charges were fair or unfair, but solely that the OFT did not have the legal basis for deciding on that question - leaving open a question which to this date still remains unanswered.
In my last post, I treated you to a selection of links (not by any means all that you could have enjoyed) related to the Concordats that are the basis for Test 3. I also made these comments ... "For me, and just perhaps now for you as well, it's not just a question of asking the FSA and the OFT - "Who on earth do you think you are?" - but "What on earth do you think you are doing?" and "How on earth is anyone meant to understand?"
Can I provide you with evidence that it was fair to ask such questions?
The Financial Services and Markets Act gave birth to the FSA, and also the Financial Services - Consumer Panel - described by themselves on that link as "an independent voice for consumers of financial services".
I may later return to the Financial Services Consumer Panel to see what they had to say on this subject of fairness over Bank charges, not least because of who serves on the panel, which includes Mike Dailly from the Govan Law Centre, someone who you can see from that link has spent much time and effort involved in this issue of Bank charges.
But for now, for Test 3, to offer the evidence I mentioned above, I want to use an extract from a speech, given by Adam Phillips, the Chair of the Consumer Panel. It was given on the 13th of October 2009, which is one of the reasons I asked you to remember the dates I mentioned above. There is a second reason which I will come to just shortly, but first some extracts from the speech:
" ... The complex regulatory environment builds in inefficiency for firms and it results in confusion and inconsistent treatment for customers ..."
" ... The respective roles of the FSA and OFT need to be clarified. Both organisations are trying to work together to provide a joined up consumer experience, and much alignment can be achieved by rule making under FSMA, but the underlying legislation does not make this easy... "
I have limited myself to only two extracts, so may I make this recommendation - please read the whole speech, but for now, all I ask is that you see the Chair of the Consumer Panel make comments which for me sit along side my own and justify my earlier remarks.
The second reason I mentioned the date is that from of all the links I gave in my last post, I want to choose just one "Concordat" to examine in the forensic manner I believe it deserves - if Test 3 is to succesfully demonstrate that all such Concordats did not reduce consumer detriment, but caused it. Can my opinion that it is so, be proven? More specifically can it be proven against this issue of fairness over Bank charges?
I have chosen this document for that purpose. It was a Memorandum of Understanding between the FSA and OFT, signed by Hector Sants for the FSA and by John Fingleton for the OFT, and is dated December 2009.
Why choose that one item from the blizzard of previous documents? It is the closest to the dates which I believe may be important, reflects (or should) the new responsibilities taken on by the FSA in the area of Banking, and can be read as incorporating (or not) the views expressed by Adam Phillips.
Sadly, as you will see it has not stopped snowing paper - there are no less than 4 Concordats appearing in just that one document. It doesn't make it that much less confusing, does it? Does it also demonstrate the issues of confusion and the inconsistent treatment of consumers that Adam Phillips mentions? So let's take just one simple point to look at, and tie it down. Once again, it has to do with dates.
Perhaps, like me, you might just take a few minutes to check out some dates on each of those 4 Concordats. Not the date of the document itself, nor the dates on which each of the Concordats may have been signed, but look for the dates upon which they became operative.
All bar one are operative from the 1st of November 2009 - again a date which precedes the ruling from the Supreme Court. Dates, like those, may indeed prove important, as I suggested quite a bit earlier.
That is where we are, the scene is set, the item to be examined is there for you to read. It, and its predecessors, and how each affected the outcome over Bank charges, how they fostered confusion and the inconsistent treatment of consumers, are central to Test 3, and why whether Bank charges are fair or unfair remains an unanswered question.
In my next post I will carry out the examination that I believe is needed, and subject to your patience as I do so, I will then say why in my opinion, it and all such "Concordats" led inexorably to real consumer detriment, serious regulatory failings - and nowhere more so than on this subject of Bank charges.
PS: I should perhaps mention that the FSA, the OFT, the Treasury Select Committee, the Financial Services - Consumer Panel have all been made aware of the existence of this blog, and the nature of the subject it addresses.
PPS: My 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?.
No, I still haven't heard. I don't suspect you have either.
.
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