On the 27th July 2007, the Financial Services Authority issued a Press Notice, headed - " FSA grants waiver to firms on complaints handling" (1)
In it, Clive Briault, Managing Director, Retail Markets, said:
"We have granted the waiver to help facilitate this test case. We believe it is not in the interests of all consumers for complaints to continue to be dealt with in the current inconsistent way. Once there is certainty on these charges, complaints can be dealt with fairly and consistently."
If the waiver was granted to facilitate the test case, and to obtain certainty on charges, some questions arise:
- was it 100% clear that the test case would indeed obtain the required certainty on charges? No room for any doubts?
- was it 100% clear that the test case would leave no doubts whatsoever, that there would be absolute certainty? No, not one, doubt?
- was it in any way guaranteed that the test case would completely remove the inconsistent way in which complaints were dealt with? No room for any doubts?
Let's remind ourselves what the Supreme Court Press Notice (2) said, and break it down into its individual parts:
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.
Lord Walker made clear that the scope of the appeal was limited
the court did not have the task of deciding whether or not the system of charging current account customers was fair,
but whether the OFT could challenge the charges as being excessive in relation to the services supplied in exchange (Paragraph 3).
When you compare the reasons given for the issue of that waiver by the FSA, the need to end inconsistency, the need to obtain certainty, when you compare those reasons with what the Supreme Court was actually asked to address - a narrow issue
You are the jury ... does the final Supreme Court judgement in that test case
- convince you - beyond any reasonable doubt - that all inconsistencies have indeed been removed, and that we now have the promised certainty?
- do you now have a complete legal answer as to whether bank charges are fair or unfair - no room for any doubts, not one?
You are the jury. Form your verdict.
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Lord Turner, the Chairman of the FSA appears to have formed his verdict, he appears to have reached his conclusions? Let's see if they agree with yours.
The Supreme Court issued that Press Notice, and their final judgement on the 25th of November 2009.
On that very same day, the Treasury Select Committee held a meeting. Before it as witnesses were Lord Turner, Chairman of the FSA, and Hector Sants, CEO of the FSA.
During the questioning (3), Lord Turner made this comment to the Committee:
" ... the FSA had put in place a waiver for firms so that they did not have to deal with complaints about unauthorised overdraft charges in the time specified under our dispute resolution rules. We had been doing that because we felt that there was no purpose in a flow of complaints before there was legal certainty one way or another as to what the situation was, but that waiver has effectively ceased today; it was clearly linked to this decision and the moment that there was legal clarity that falls away."
Pardon? Lord Turner appears to believe there was legal clarity. Well, there was indeed legal clarity - that is the truth - but was it the legal clarity, the certainty over charges for which the waiver was issued by the FSA. Did that legal clarity - on that narrow issue - remove all inconsistencies, did it remove all uncertainties, was there now no need whatsoever for any waiver - because we all now had legal clarity?
Did everyone now know the answer to whether bank charges were fair or unfair. Well, might I suggest it was everyone except the Supreme Court perhaps ... and yes, me and you.
Perhaps, this further comment from Lord Turner to the TSC on that day will explain what Lord Turner was thinking:
"... I think that it is clearly the case that the argument about whether these charges in the past can be deemed to be unfair, which is probably the basis of most of the complaints that have been brought forward, has been definitively resolved by the Supreme Court ..."
You are the jury
Do you agree with Lord Turner?
Do you agree - beyond any reasonable doubt - that the argument about whether these charges in the past can be deemed unfair [ ... ] has been definitely resolved by the Supreme Court?
Do you agree when the Supreme Court's words were:
The Supreme Court had to decide not whether the banks’ charges for unauthorised overdrafts were fair
the court did not have the task of deciding whether or not the system of charging current account customers was fair,
If you do agree with Lord Turner, despite that evidence of what the Supreme Court actually said, perhaps there is little point in reading further.
Personally, I don't agree, personally I cannot see how anyone could agree with Lord Turner's comments to the TSC - which is why this blog exists, and why since its inception I have ensured that Lord Turner, the FSA, the FOS, the OFT, the TSC and others are all aware of its existence.
If you disagree with Lord Turner's thinking, and feel that there is still a completely unanswered question over the fairness or otherwise over bank charges, then please keep reading.
I will offer both evidence and proof of why - bank charges were and are unfair - contrary to Lord Turner's view.
A bit later on it will include - as only one item of that proof - the reason why I highlighted the word "all" earlier. You didn't notice that? It's way back at the beginning in Clive Briault's comments, when he referred to "all" consumers. That simple three letter word "all" - as in "all" consumers has a major part to play.
But for now, let's briefly re-visit the Co-ordination Committee - why are bank charges not on their agenda?
Well, perhaps the views expressed by Lord Turner explain at least one reason why the Co-ordination Committee do not have the subject of bank charges on their agenda. They may have concluded - perhaps as Lord Turner may have concluded - that the issue is dead. Do you know of any other reason?
You are the jury
Is the issue dead as far as you are concerned? Or would you like proof that - bank charges were and are unfair?
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PS: The links to the numeric notations in this and further posts in this blog will appear in an addendum at the conclusion of the blog.
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