But what I want to do at this juncture is to complete this comparison of the FSA -v- the OFT. - to offer the evidence that contrasts what the OFT were thinking they could do - the threshold charge - and compare that not with what the FSA "thought" they could do, but what they have actually done.
If you refer back to that last post you will see me offer the comment that in my opinion the OFT approach of establishing a "threshold charge" was too narrow. But that is just an opinion - I believe it to be justified, but you may not share that opinion.
Be that as it may, what I want to do now is list an extensive range of evidence which shows how the FSA have dealt with, and to this day still approach the question of charges, their approach to how customers should be treated, and their approach to those levying any charges.
No, I am not yet attempting to link the FSA and Bank charges. I could do so at this juncture, but this blog is intended to be "a body of evidence", just as would be presented in a trial. It follows a sequence, and this series of posts is of great importance.
I have to demonstrate through the evidence which follows that the FSA have a detailed, consistent, and already firmly established basis for addressing factors such as unfair charges, the treatment of consumers, and their response to financial companies who do not conform to the requirements imposed on them by the FSA.
Now, for some reading this, and who have a detailed knowledge of the whole subject of bank charges, I may be accused of drawing this evidence against the subject of mortgages, and that I cannot therefore apply this evidence to the question of bank charges.
I would ask those - please bear with me - this evidence is very important when I do reach the question of bank charges and link the issues involved very directly to the FSA, for these reasons:
1) - Most importantly because if we can establish very detailed evidence of how the FSA think - and more importantly act - in matters such as these - then when I offer the evidence of why that final link between the FSA and bank charges is established we have the firmest platform possible for 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?
2) - the evidence I will lead does not involve the OFT, and it further allows me to demonstrate through the evidence that follows that it was the "blizzard" of Concordats between the FSA and the OFT that has caused consumer detriment, and why we still do not have a answer to whether bank charges are fair or otherwise.
3) - because the focus of attention over the issue of bank charges has always been with the OFT, it has left the powers granted to the FSA under the Financial Services and Markets Act (FSMA) to be left with little if any scrutiny. This blog is dedicated to reversing that position.
I should at this stage offer a warning - the items of evidence that follow are extensive and detailed, and will follow item after item after item.
For those who wish an easy answer, a quick way forward - perhaps these will not be for you?
For those, and I am one, who wish a fully documented trail of hard evidence, and for it all to be on the record, open to anyone to read in whatever manner they choose, open to challenge, open to argument, then these items are vital.
Some items will be drawn from the FSA website, some from the Financial Services - Consumer Panel. Some date back a few years, some are drawn from documents only appearing in the last few days.
They will allow those who view the evidence to assess for themselves whether the approach used by and acted upon by the FSA is both much wider than that adopted by the OFT, and whether it is consistent.
In my next post, I will post the first item (in a long list of items). I will, as usual, use extracts to highlight what for me is important - but, also as usual, will also provide the links to the evidence itself so that it can be read in full.
To give you an idea of what some of the items may involve, these are two very small, very limited extracts from a 14 page "Final Notice" issued by the FSA, using their powers under the FSMA:
"The FSA gave GMAC-RFC Limited (“GMAC”/“the firm”) a Decision Notice on 26 October 2009 which notified the firm that pursuant to section 206 of the Financial Services and Markets Act 2000 (“the Act”), the FSA had decided to impose a financial penalty of £2.8 million on the firm. This penalty is imposed for breaches of Principle 3 (Management and control) and Principle 6 (Customers’ interests) of the Principles for Businesses (“the Principles”) and Rules 12.4.1 R and 13.3.1 R in the Mortgages and Home Finance: Conduct of Business sourcebook (“MCOB”) in the period between 31 October 2004 and 30 November 2008 (“the Relevant Period”).
GMAC will also carry out a customer redress programme with a view to providing redress to those customers who were charged specific excessive and unfair charges (i.e. charges that were not a reasonable estimate of the costs of the additional administration required as a result of the customer being in arrears) in respect of their mortgage account. The estimated cost of redress for the period 1 November 2004 to 31 August 2009 is up to £7.7 million, plus interest, for both regulated mortgage contracts and buy-to-let contracts."
My next post will provide the links to that item, offer some comments, and perhaps most importantly some much needed explanations of some of the terms used, eg., when you read the words "MCOB", that refers to the "Mortgage - Conduct of Business" Rules.
Be aware - just for now - that there are also "BCOB" - "Banking - Conduct of Business" Rules - they will form part of the link we need when we address bank charges.
Just please remember my warning - the next long series of posts are not for the faint hearted - but they are vital.
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