The Financial Services Authority (FSA) has granted waiver to banks so that they need not handle complaints from their customers about bank charges, such as those for exceeding overdraft limits.
The FSA also expects and desires the Financial Ombudsman Service and the county courts to stop handling such claims.
The reason for this is because the Office of Fair Trading (OFT) is issuing (or has issued) a super-claim against the majority of high-street banks in the High Court.
Even so, the FSA’s waiver causes serious problems:
The FSA's waiver removes all claimants' rights and routes to justice to the effect that everyone must now wait for the conclusion of the OFT's case.
Worse, many thousands of claimants have serious debts caused largely, and often solely, by these charges. Removing all of their options under the law and forcing them to wait for years will cause a great deal of unnecessary anxiety and distress.
It is likely that many of these people will go on to incur further debts as a result of this delay, causing even more stress and anxiety.
Furthermore, the FSA has ruled that claimants who have already received offers from their banks must now accept the offers in full and final settlement, or they must wait for the outcome of the High Court case.
For claimants, who have received offers significantly short of the full amount claimed, especially those with debt problems, this is a terrible and unfair position to be put in. They now must make the difficult choice of accepting far less than they claimed, or an anxious and unnecessarily long wait for a resolution.
Finally, the FSA states that the banks will not use the Statute of Limitations to avoid paying claims that were delayed as a result of the FSA's waiver, or as a result of these claims being stayed in the county courts.
However, the FSA has no power to disregard the six-year rule in the Statute, nor can it force banks to repay claimants. Therefore, if a claimant is forced to take its bank to court after the OFT's claim is finished, the judge will still be obliged to take the Statute into account.
As the OFT's claim could take as long as five years, this would wipe out virtually all the money that is being claimed today, and it is estimated that there are billions of pounds to be claimed.
The FSA has unwittingly played into the banks' hands, and so will the county courts if they refuse to handle these claims.
We understand that one claim to settle it all will provide consistency for future claims, which we acknowledge is desirable. However, in the shorter term claimants should still be allowed to take complaints to the Ombudsman, or to claim in the county courts.
(The main points are outlined above, but you can read even more background at Fool.co.uk. Search the site for ‘The Ultimate Guide To Reclaiming Bank And Card Charges’ and for the article: ‘It's Vital You Still Claim Your Bank Charges’)
We, the undersigned, call on the FSA to re-consider the impact of its decisions on bank charges claimants, and to rescind its waiver to UK banks at the first opportunity.
We also call on the county courts and the Financial Ombudsman Service to continue to handle these claims. We also ask the FSA to support this position.
The Make UK Banks Deal with Bank Charges petition to UK bank customers was written by The Motley Fool and is in the category Consumer Affairs at GoPetition.