It may help those reading these posts if I suggest a way of thinking about what each post is intended to achieve. The best way I can do so is to ask if you have ever played the board game "Cluedo"? At the start you are trying to find an answer to something, and move by move you accumulate more and more information, which allow you to narrow down that answer.
That, in fairly simplistic terms is what each item in this blog is about, each item is a piece of knowledge, evidence, and although each is important, just as in "Cluedo" it will not be until the last posts that the only obvious answer becomes apparent.
It may also explain why I have adopted this method of presenting evidence in fairly painstaking detail. Eventually, those of you who log into this blog will see the latest post with what I believe is the answer - and if that is the only page you ever see, perhaps it may be the very first time you will ever have visited - you may well ask how did I get to that answer? Do I have any evidence to justify the answer? Well, yes - just sit down, have a coffee or tea, and read it all - and see if you agree.
I make those comments, because this post and the others that will follow immediately after are important, but their importance is unlikely to be immediately apparent, but I assure you, just as in "Cluedo" we need them to form the eventual answer - in this case an answer to:
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.
In the last post I used this extract from one of those Concordats
" Banking
The OFT and the FSA will work together to ensure that a consistent and coordinated approach is taken under the Consumer Credit Act, the Financial Services and Markets Act, the Payment Services Regulations and the FSA’s Handbook in relation to potential regulatory breaches and to agree which party is best placed to lead in each case"
I am going to offer into evidence an item which involves the UTCCR, which involves banks, where terms were deemed to be unfair, where the banks accepted that they were unfair - and while that may have its own relevance in the issue over bank charges - I want to use it at this juncture to illustrate how what might be agreed in theory between the FSA and the OFT may not play out in practice.
Why? Because that is what I believe happened over bank charges. The following item is in no way incontrovertible evidence in that issue, but it does demonstrate what I said earlier, that what might seem obvious, may not be. I will expand on that theme in the posts that follow.
However, for now just read that above extract again - and let's say you are playing "Cluedo", you have just entered a room, and you are given this information: " ... The OFT, in its role as primary enforcer of the Regulations, issued guidance in February 2001 (reissued in September 2008) (OFT 311) on its interpretation of the Regulations ..."
Now, given that comment, just on that evidence, your only clue, who would you conclude would be the party who took the lead? The OFT or the FSA?
If that was your only information - it has to be the OFT, hasn't it?
Let's find another extract, and see if that helps, this one " ...As a qualifying body under the Unfair Terms in Consumer Contracts Regulations 1999 (the Regulations) we can challenge firms that are using terms which we consider unfair."
Does that help? Well, not if you know, that both the OFT and the FSA are qualifying bodies under the UTCCR - it doesn't help at all - in fact, it leads to confusion, and doubt. It leaves a question unanswered. Is that perhaps what happened over bank charges - confusion, doubt, and a question unanswered?
But re-read the extract - it mentions the Consumer Credit Act - and the Financial Services and Markets Act - and the Payment Services Regulations - does that alter the situation?
Let's see, here is the document I am using. I will let you read it in full for yourself.
I said above that it has its importance, but that its direct relevance to the issue of bank charges will be something I address later. All I want to establish for now is that something that may appear obvious in theory, may alter in practice.
Whilst I prepare the next set of posts which add further evidence, let me leave you with some questions.
When as is often said, that it fell to the OFT alone to challenge the issue of bank charges - that assertion is based on the application of the Consumer Credit Act.
But think through the above example - what was involved? Powers under the Consumer Credit Act? Powers under the Financial Services and Markets Act? Powers under the Payment Services Regulations? Powers under the UTCCR? Or a mish-mash of some but not all of those, where either the FSA or the OFT could have taken the lead? If you were playing "Cluedo" would you have enough information, or might you need more clues before you offered an answer?
Cast your mind back, and when you think of what may appear to be the exclusive powers of the OFT under the CCA to address the issue of bank charges - think also of the Waiver. Who issued that Waiver, and under what item of legislation? Was that another case, where different items of legislation were in play, where different regulators operating under differing powers appeared, where one acted on its own, and the other, apart from the waiver, virtually disappeared?
Should the powers granted to the FSA under the FSMA have played a part beyond the issue of the waiver. Indeed, was the issue of that waiver, a clue to something very important, that we all over-looked?
The story of bank charges, as you look back, has involved the FSA, and their powers under that Act. But were they fully deployed?
When the OFT became the lead in the issue, were important, perhaps vital, issues overlooked?
Was it inevitable that would be the case, because when it comes to Concordats and agreements, no matter how well intentioned - as the old saying has it "too many cooks spoil the broth!"
The next posts will offer further evidence of that conclusion and will look more closely at that other item of legislation, the Financial Services and Markets Act.
It contained the very substantial regulatory powers that singularly allowed court cases, and cases at the FOS, to be put on hold.
What else might it do when applied to the issue of bank charges being fair or otherwise?
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