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If you’ve thought about making an unfair bank charges or mis sold PPI claim but not gotten round to it… pull your finger out. And if that hasn’t persuaded you, have a read of this letter from a Mortgage Strategy reader that shows lenders really don’t give a damn about their customers, take a look…
The Financial Services Authority (FSA) will be given new powers by the newly appointed secretary of state after the Financial Services Act received Royal Assent on 8th April. The Act won’t be exactly as proposed, with class action PPI claims and a few other elements being dropped to make sure it was passed into legislation before Parliament disolved for the general election.
The class action proposals would have enabled multiple consumers to join together and bring a case against banks, insurers and other financial institutions. The new Act will give the FSA some useful powers when dealing with PPI claim cases and under section 14, it will be able to draw up rules for a consumer redress scheme. This scheme will look to compensate consumers that have been affected by a ‘widespread or regular failure’ by relevant financial services firms. If a firm fails to comply with the regulator’s requirements and consumers have suffered (or might suffer) loss or damage as a result, then the FSA can implement punishments. Whether the regulator will stand up for the consumer and use it’s new powers, remains to be seen.
It was only a matter of time before we started to see payment protection insurance being used as a political football and Gordon Brown kicked off today with a pledge to clampdown on banking rip-offs and mis selling. Of course Brown is referencing the completely unfair bank charges and mis sold PPI policies that have been uncovered in the banking industry over the last 4 years.
Labour has said it wants fairer charges but the Lib Dems have gone one step further and are campaigning for victims of past fees to be refunded despite the Court decision in November. Whether the Tories will chip in is to be revealed tomorrow, when they announce their manifesto.
Believe it or not, there’s a financial time bomb ticking away in UK, and if it goes off: hundreds of thousands of individuals stand to lose everything because of the culmination of a number of factors. We’re talking about attempts to stay afloat and keep the wolf from the door but these attempts could well bring the wolf in, sit him down and offer him afternoon tea. Have a read of this to find out more…
Earlier this week, Martin Lewis’ website MoneySavingExpert.com launched it’s new “bank charges reclaiming guide” with the headline that up to £480million of unfair bank charges could still be reclaimed. They’ve calculated that more than 500,000 people could still claim, despite last year’s Supreme Court ruling to the contrary.
The GMTV money expert said: “Rumours of the death of bank charges reclaiming have been greatly exaggerated, certainly the number of people who can do it has decreased – it’s now mainly those people suffering financial hardship.” If anyone watched the live announcement by the Supreme Court at the end of last year, they’d have seen how angry Lewis was, so it’s no surprise that he’s starting the fightback so soon.
As if the raft of unfair bank charges and mis-sold PPI wasn’t enough to contend with, the banks then went and put us into a recession which has led to record unemployment levels. Meanwhile, billions of our money was used to bail them out and now they all have their million pound bonuses back.
Corruption is the only word I can think of at this point. And don’t think that they’ve been made to turn over a new leaf by a slap on the wrist from a toothless QUANGO or Government investigation panel. The new way that we’re getting shafted is through personal loan interest rates which are at the highest level since 2001. When it comes to extracting cash from our pockets; you’ve got to give the banks some credit, even if they overcharge you for doing the same.
Last year, the Financial Services Authority (FSA) whacked a massive fine on mortgage lending company GMAC-RFC for starting repossession proceedings too early. Now, GMAC-RFC conducts no new business in the UK and as well as the £2.8 million slap on the wrist, the US based lender had to repay £7.7 million to the customers concerned.
The thing is, what GMAC-RFC did is just as bad as all the extortionate bank and credit card charges that other lenders charged leaving people overdraen and in serious debt. Yet those lenders go unpunished and have their actions sanctioned by a Supreme Court. As usual in this odd financial system we have, it’s one rule for one set of customers and another rule for another. Get it sorted, someone.
The latest report by the Financial Ombudsman Service (FOS) has revealed that unfair bank charges are affecting low-income households so much that they are unable to pay their rent or mortgages. According to the report, the number of families struggling because of excessive bank charges risen from 2,000 to 8,000 in just one year.
As part of their report the FOS commented that the situation had been made worse by the Supreme Court decision to allow bank charges to remain unregulated and in turn denying millions of customers the chance to reclaim bank charges. The FOS expects 2010 to be a year of continued and increased banking distrust and is preparing for a 27% increase in the number of disputes between consumers and financial firms about bank charges, mis sold PPI and mis sold endowments.
Someone once said “To make millions in football you have to start with billions” or something like that, the point being that running a football club is an expensive hobby to have. And it’s not just top flight premiership clubs that can be guilty of strying into the red either, as one junior football team in Derbyshire recently found out.
A BBC Watchdog investigation revealed that Riverside under 15’s football club from Long Eaton, Derbyshire, was issued £800 worth of bank charges by HSBC for going just £2.57 overdrawn. The amount reached £260 before Manager Kevin Cooke was able to speak to anyone from the bank and was then told it was too high a debt for that department to deal with. By the time Mr Cooke was able to discuss the seemingly unfair bank charges with a representative from HSBC, the deficit had risen to a whopping £813.29.
After pressure from the TV show and the club, HSBC finally wrote off the debt and a representative of the bank said: “It is clear that we got it very wrong, we are in the process of contacting the club to apologise for what has happened as well as sending them some sports vouchers as a goodwill gesture.”
As you may know: the Office Of Fair Trading (OFT) lost their case against the banks regarding the fairness of bank charges and we explained the ramifications of the decision shortly after the result. But many pundits and campaigners (including ourselves) took hope from the final words of Lord Phillips, President of the Supreme Court when he said that the OFT is free to bring the case back to court under different legislation.
With this statement ringing in all of our ears, you can imagine everyone is keen to know what the next move of the OFT will be. And because you stopped by the blog today, we can give you a heads up on their announcement.
It’s going to be next tuesday, 22nd December and the watchdog will reveal whether they are going to continue the fight against unfair bank charges. We can’t give you a time because the OFT are aware that what they have to say is likely to affect the stock market. But previous comments from the OFT suggest that the announcement will be at 6pm, after the markets close.
Lets hope they keep up the fight, especially after Martin Lewis revealed that (after expert legal advice) he believes there is a new ‘blockbuster argument’ that hasn’t been used previously.