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October 2007: Latest developments with OFT
test case
As we previously suspected, the banks are using the OFT test
case as the latest excuse to delay dealing with claims. All of
the banks now say that they will not deal with any individual
claim until the test case is concluded. If it has to go through
all the appeal courts then that could take a considerable period
of time and at Red Card we think the banks are hoping most
people will just give up. We won’t!
From our research it also appears that none
of the courts are still processing individual claims. They are
just staying every case.
A couple of points worth noting:
If you think any of this may apply to you,
call us now for some free advice.
August
2007: New estimate says �400 million returned by banks
This sounds more like it! Following announcements by
various banks about how much they have repaid to their
deserving customers – Barclays �87 million, HBOS �79
million, Lloyds TSB �39 million and HSBC a staggering
�116 million – we think the total could easily be well
in excess of �400 million but it’s a start.
Remember that it is estimated that almost �5 billion of penalty
charges were made last year alone and you can go back 6 years so
the total amount to recover is around �30 billion – and at Red
Card we think it could be a lot higher.
That means that so far, less than 1.5% of the illegal penalty
charges have been refunded – we’ve still got a long way to go!!
August 2007: Banks report massive increases in profits
Both Barclays and HBOS have reported huge increases in their
profits. Barclays' profits for the first 6 months trading rose
by 12% to �4.1 billion whilst HBOS have seen an increase of 13%
to almost �3 billion. In our opinion, this
shows the true colours of the banks’ delaying and stalling
tactics on penalty charge claims: it is all about keeping their
profits as high as possible.
August 2007: Credit Suisse estimate that over �200 million
has been repaid in penalty charges war
This is obviously very encouraging but we think the figure may
be considerably higher than this given the number of successful
claims that have been brought.
 July 2007: Bank charges claim for additional damages turned
down
An attempt to claim against a bank for damages on top of the
return of penalty charges failed in court. The Claimant, Tom
Brennan, was attempting to get all of his penalty charges
returned and then claim additional damages for “consequential
losses” he said were caused by the charges being imposed.
Unfortunately the court was not persuaded by his arguments and
threw out his case. We understand he is now considering whether
to appeal.
We think that it would be fair to get the additional damages if
other losses were caused. However, in the meantime, Red Card
will continue to press for reimbursement of all penalty charges
and interest on behalf of all its clients.
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July 2007: OFT announces test case for bank charges
The OFT has announced it will bring a test case about the
fairness of penalty charges against 7 banks and 1 building
society (Abbey National, Barclays, Clydesdale Bank, HBOS, HSBC,
Lloyds TSB, RBS and Nationwide). These represent about 90% of
personal accounts in the UK.
The OFT had already been involved in an investigation into the
correct level for bank charges which it hopes to report on by
the end of 2007.
So is this a good development for claimants? At first glance you
may think so: it will surely bring certainty and allow claimants
to know where they stand.
However, at Red Card, we think this is one of the worst things
that could have happened. Although all parties concerned have
signed an agreement to get the case to court as soon as possible
– and we have seen that agreement – what have the banks done in
every case so far? Stalled and delayed. So why should this be
any different? The last time the OFT took on the banks in
litigation, it took 4 years to reach a conclusion. If the banks
can delay this case, then yet again their profits will remain
high. And even if they lose at the high court, they always have
the Court of Appeal and House of Lords to move on to – causing
yet further delays.
Whilst the test case is ongoing, the Financial Ombudsman’s
Service and the courts are likely to stay any other cases until
the outcome of the test case is known. Again we would say
playing right into the hands of the banks.
We hope we are wrong but we anticipate that most people’s claims
could grind to a halt. However at Red Card we intend to push
hard to convince the courts that it is not in the interests of
justice to simply put a hold on all cases – we will keep you
posted!! |
July 2007: Lloyds TSB lose bank charges case at St Albans
County Court
This is the first reported case which we are aware of where the
claimant has won. Again, as far as we know, the bank failed to
attend court for the hearing. Before this the banks were
settling 99% of cases before they got to court so that a
precedent could not be set. It also shows that the Birmingham
case in May is not binding on other courts.
June 2007: Banks back down as Leeds judge tries to run test
case
A judge in Leeds attempted to force the banks to come to court
and argue their cases on penalty charges so that a precedent
could be set. He listed 250 cases on one day but the day before
the hearing, the banks suddenly decided to try and settle all
the cases. As a result only 75 remained outstanding and in most
of those cases the banks requested more time so that settlement
could be negotiated.
Again we feel this shows the complete lack of confidence which
the banks have in their arguments. If they feel the penalty
charges are justifiable, why don’t they go into court and let a
judge decide.
May 2007: Banks accused of failing to turn up at court and
accused by judges of “behaving unreasonably”
There certainly seems to be a pattern developing of judges being
more and more annoyed about banks simply failing to turn up at
court and using delaying and stalling tactics. A judge in
Worcester told one claimant that the bank had failed to appear
before him on 50 occasions! Judges as far apart as Lincoln,
Leeds, Bristol and London have made similar comments, and a
judge in London also accused banks of behaving unreasonably by
using delaying tactics when claims were brought.
We have seen this on virtually every claim and Red Card are
determined to ensure that if there are ways to stamp this out,
we will use them. |
