Bank Charge News

Open letter to the media

Dear Sirs,

I am dismayed by the Agreement announced recently of the deal struck between the major banks and our Regulators, which effectively brings to a halt the repayment of billions of pounds due to bank customers. Not only has the complaints procedure been halted, but the Agreement reached without any prior consultation with Consumer Groups, Regulated Claims Companies or the Law Society has also agreed to stay all claims before the Courts.

Although this agreed stay will require an Order from the Master of the Rolls, I understand that a private letter has been sent to our most Senior Judge pointing out the agreement for a stay, and asking for his consent.

The banks have out-manoeuvred, in this case, our Regulators, who are not normally perceived as naÃve, but that is the only way, in all kindness, that I can view their complicity in this case.

I do hope the Master of the Rolls rejects the Application outright or invites submissions from representatives for the Claimants. The banks have admitted repaying in aggregate this year alone something in excess of £1b voluntarily, and have not fought a single case. This Agreement, at a stroke, allows the repayment of unlawful charges to be stemmed, and gives the banks an unexpected windfall, in that no further provisions now need to be made for, perhaps, a year or two.

Worse still, because the banks do not need to make any further voluntary offers, Claimants are effectively forced to accept existing offers which would normally be rejected, and which are substantially below the full amount of the refund claimed, or face the prospect of an indefinite wait, on the outcome of Court proceedings. The Ministry of Justice admits that this could take substantially longer than the initial year of the moratorium.

I have sent emails to the Ministry of Justice and the Law Society voicing in detail my concerns (although no responses yet received), which I believe are mirrored by consumer groups as well as Claimants Solicitors acting for huge numbers of disadvantaged people, many of whom are in financial difficulties, precisely because of the unlawful payments wrongly debited to their accounts.

The OFT recently published a critical report into the banks handling of these complaints which your newspaper headlined on Saturday the 29th July as “Lies, Scams and Threats – Banks are Condemned”.

I enjoined the Master of the Rolls to have no truck with this cosy deal and allow the legal process of claims within the County Court to proceed in the normal way. The banks must consider that their position is untenable, otherwise why would they have paid out so much money, to the detriment of their own shareholders, if they had a leg to stand on.

The OFT with the full knowledge of FSA and the Ombudsman Service, have been duped into an Agreement to the detriment of the public interest, and although that is a done deal, I believe the public should be alerted to the realities that flow from such Agreement, and I do hope the Master of the Rolls either refuses to order a stay outright, or, at the very least, if he is minded to consider same, allow for the appropriate representatives of the Claimants to make submissions. Some of the conditions that may well be appropriate, if a stay is to be granted, might well include the following:-

1. Limitation should continue to run throughout the period of the stay, and the separate period covered by the Waiver.

2. The Court should refund all Court fees laid because Claimants in aggregate have expended millions in Court fees which will merely be stuck in the Court system for the indefinite period of the stay. The conditions should direct banks to return such funds to the Solicitors representing Claimants and Claims Companies who may have laid out such fees. One of the more unsavoury tactics adopted by the banks, even when they have been paying out, is to ignore protocol and the signed mandate from the client and even when in Solicitors’ hands, have made payments direct to a client or into the clients account; this has often included Court fees laid out as well. Unsophisticated clients do not understand that these monies are not all theirs and that part of them relate to Court fees and other parts relate to fees due to the Law Practices and Claims Companies. Indeed, in view of the egregious conduct of the banks as exemplified by the OFT report referred to above, the Court may wish to order a payment to every Claimant of, say, £500.00, irrespective of the outcome of the test case and not refundable in any circumstances. If the stay is removed or the Court orders the banks to refund charges in full, such payments can be taken into account.

3. The Court stay should be lifted immediately the OFT report (promised before the year end) is issued, and provided that it deems charges unfair (an almost certain likelihood).

4. Mr Anthony Sultan, an executive with the Claims Standards Council believes banks should be stopped from levying any further charges in view of the cash flow saving afforded to them, during the currency of the stay and Waiver.

The banks should be given no quarter, by an effective immunity from the Court process, as their conduct to date invites no sympathy whatsoever.

Yours sincerely

R M Gardner

Miller Gardner Solicitors

Manchester

M16 9HF