I received an email today from the Office of Fair Trading in reply to the email I sent them, I've reproduced it below for the benefit of anyone in a similar position;
Date: 13 September 2007
Dear Ben Tasker
Thank you for your e-mail of 1st Sept 2007 to the Office of Fair Trading (OFT) regarding our current work into bank charges. The comments you make have been noted and will be added to our records.
The following is an explanation of the work we have been doing and why we have taken the test case at this stage. I hope that this and particularly the above attachment (Financial Services Authority - Factsheet) will answer some of your concerns.
The OFT’s work on personal current accounts
There has been widespread concern as to whether or not the current account market in the UK is competitive. There have also been specific concerns about the legality of charges relating to unauthorised overdraft. Earlier this year, the OFT launched a market study of personal current accounts. This is designed to provide the OFT with an understanding of how the market as a whole works, so that we can take a strategic view of perceived problems and any subsequent action OFT should take or recommendations it makes to business, consumers or the Government. The OFT’s view is that active informed consumers are the best drivers of efficient competitive markets and so the study is focusing in particular on transparency for consumers and ease of switching. The study is due to report in December.
In parallel with the market study, the OFT is examining the fairness of the level of unauthorised overdraft charges and returned item fees in line with its statutory duties under the Unfair Terms in Consumer Contracts Regulations (UTCCRs). In considering this matter we need to look at financial information from the banks and also to take a broader view of the market to ensure that any action we take will improve the way the market works and outcomes for consumers. The market study will play a critical role in informing the OFT’s view of the right outcomes for consumers.
The test case
One aspect of our work is considering whether the unfairness test contained in the UTCCRs applies to unauthorised overdraft charges. The OFT considers that the test applies, but the banks disagree.
We believe that an early ruling on this preliminary issue is in the public interest as it will provide some much-needed clarity in the market, and also provide the OFT with a stronger basis for conducting its UTCCRs investigation and negotiating any settlement. We have therefore agreed with the Banks to take a test case and we commenced proceedings in the High Court on 27 July. We are committed to ensuring this process is resolved in as efficient and expeditious a manner as possible. For further information about this test case please see our Questions and Answers.
http://www.oft.gov.uk/advice
Complaint Handling
The OFT, the Financial Services Authority ('FSA') and the Financial Ombudsman Service ('FOS') hold complementary responsibilities for banks and we have been working together to make sure that the process is as well coordinated as possible. The OFT's responsibility is to make markets work well for consumers collectively and it does not have the power to intervene in individual disputes between consumers and business. This responsibility lies with the FOS. The issue of how banks handle complaints is determined by the FSA.
In the light of the test case, the FSA agreed that banks could suspend their work on complaints about unauthorised overdraft charges while the test case is running. Because the legal issues have not yet been determined, the FSA has not intervened in the levying of the charges. However it has set strict conditions that banks must follow, designed to ensure that consumers will not be disadvantaged in their ability to recoup charges levied prior to or during the test case.
Firms with the 'waiver' must:
· Not take the period, during which the waiver is in place, into consideration in any decisions made about limitation periods or time limits for complaints;
· Not make materially adverse changes to the level of charges during the waiver;
· Do all they can to help account holders avoid incurring these charges in the first place; and
· Apply the relevant principle(s) established in the test case when dealing with complaints about charges.
For further information, please see the following links
http://www.oft.gov.uk/news
The OFT (Office of Fair Trading) cannot intervene on behalf of individual cases but operate on behalf of UK consumers to ensure markets work well for consumers.
Alternatively in your case you may wish to contact the Financial Ombudsman Service. The Financial Ombudsman Service provides an independent service for resolving disputes between consumers and financial firms.
Financial Ombudsman Service
South Quay Plaza
183 March Wall
London E14 9SR
Http://www.financial-ombudsman
Tel: 0845 080 1800
Unfortunately the OFT can make no further comments at this stage but I do hope that the matter is resolved to your satisfaction.
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