OFT Has Betrayed Consumers

The OFT has betrayed consumers. That is the verdict of several of my colleagues and clients after the Office of Fair Trading (OFT) decided to launch a test case against the main high street banks over excessive bank charges.

Towards the end of 2006 consumers in the UK learned that their banks could possibly be charging them illegally for things like exceeding overdraft limits or bouncing cheques. As these were construed as costs to the bank, and not fees, the assumption was that these things were costing the bank about the same amount of money as the banks were then charging their customers.

So was it costing the bank £30 to send a letter to a customer telling them they had exceeded their overdraft limit by one penny? Did it really cost £25 to send an automated note to a customer saying that a cheque had bounced? No. Clearly it did not.

Tens of thousands of people began asking their banks for their money back, and the people won. The banks, to everyone’s surprise, did not contest this in the courts. The banks did not bring a test case because they knew they would lose.

Everything was going the consumers’ way. By Spring 2007 thousands of people were taking the banks to court every week, and winning.

Then, on July 27th, in a move that has upset many an applecart, the Office of Fair Trading decided to end this. The OFT has betrayed consumers by taking on the banks over their excessive charging without giving due consideration to cases already in progress. The OFT gave no warning about what it was about to do, but just weighed in and started proceedings, initiating a test case. This will now put on hold all pending claims. Opinion differs as to the length of time these will be put on hold, but some people say that consumers will have to wait over three years to get their money back. The OFT has betrayed consumers, the very people they are meant to be protecting.

In some cases the claims run into thousands. Does the OFT think it is serving the public well by depriving individuals of thousands of pounds of money which should not have been taken from them in the first place? The OFT has betrayed consumers by its action; it has betrayed the very people it is charged with helping.

Caveats are now issued by the OFT (who may now understand their terrible blunder), to the effect that due consideration should be given to cases of genuine hardship. The reality is that, in cases of genuine hardship, the burden is on the claimant to prove that hardship. Specifically this is done with a form N244 (obtainable from the H.M. Courts Service website here).

The problem is that this costs £35 just to send it to the court. Does it not occur to the OFT that people who tend to have racked up so many bank charges in the first place may be in situations where they are least able to pay such fees? This whole thing is about reclaiming illegal fees, not paying more fees. The OFT has betrayed consumers not once, but twice.

In reflecting how the OFT has betrayed consumers it is interesting to note that this case only relates to reclaiming bank charges. Charges can still be reclaimed from credit card companies. See the Credit Card Balance Transfers site for details of saving even more on credit cards.

File under: OFT Has Betrayed Consumers. Watch this space for developments.

How To Claim Back Bank Charges

When considering how to claim back bank charges, readers of this blog in the UK will probably be aware that people may claim back their bank charges over the last 6 years (5 years in Scotland) by a simple recovery procedure.

This is because the law will construe bank charges as being disproportionate to the costs incurred by the banks to make those charges. Does it really cost £35 to send an automated letter printed by a robot and post it to a customer who has gone £1 into the red? Well, no it doesn't. It probably costs no more than 25 pence, and most of that will be postage. How to claim back bank charges starts with unprogramming yourself in the belief that the banks, like other authority centres, are always right. In terms of charges, the banks are always wrong.

I cannot offer you any specialist knowledge here. But I can show you an excellent guide in the Money Saving Expert's website here
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Recently the OFT weighed in and ruined the party a bit by taking the major banks to court. This puts existing reclaim processes on hold (probably for a couple of years - the banks will be sure to drag it out). But you can still claim back credit card charges.

If you want to save money on credit card charges in general you can go to the Credit Card Balance Transfers site. Use their free service and you won't have to pay any interest charges for years!

File under: How To Claim Back Bank Charges. Watch this space for developments.

UK Loan Quote

UK Loan Quote

When looking for a UK loan quote I tend to trust Accepted. I've used them before, and it's as simple as anything to fill in their application form and that puts your application in front of lots of different lenders so that you can guarantee several of them will come up with the loan that's most suitable for you.

I did this a few weeks ago when I wanted a new kitchen. I got several quotes from the master broker (as they style themselves - but their reach is truly huge) and all I did was select the cheapest. Actually it was the second cheapest UK loan quote but they did offer me a five month payment holiday as well, so I took that one. I also got a new kitchen!

I also used them a couple of years ago when I was looking for another UK loan quote to consolidate an existing loan and also finance some refurbishment of the house (and put in a new patio). They were able to get me a good APR and I was paying around the same as I was paying on my previous loan (except now I had the new patio). They didn't have the payment holiday then, though, as far as I can remember.

They were fairly immediate in their response as well. I can recommend them. Their quick application form is here.

File under: UK loan quote. Watch this space for more on the same subject.

Save and Prosper Pension Quotes

Many readers of this consumer blog would from time to time consider starting a pension scheme. Pensions are recommended as a good way of preparing for the later years when we may only have the state pension to rely on. This is a salutary tale about Save and Prosper pension quotes which I feel I have to put in the public domain, as it is rare to find such incompetence outside the public sector.

I took out a pension with Save and Prosper about ten years ago when I took out my mortgage. When I turned 50 I decided I would cash in 25% of the capital, as recent legislation has allowed me to do. In order to do this I had to get a quote for the value of my pension. So I applied for a Save and Prosper pension quote.

The first Save and Prosper pension quote I received was for a married man. I am not married and have never been married. I phoned them up and asked them to send me a quote for a single person.

About ten days later I got another quote. It was for a married person again. They had sent me the same incorrect documentation.

Three telephone calls later in the following weeks did not result in anything. But I phoned them again last week and today I received another pension quote from Save and Prosper ... based on a married man.

Perhaps they are incapable of understanding that people can remain single. Perhaps this is a roundabout way of encouraging me to make an honest man of myself. Every time I ask to speak to the person whose name appears on the covering letters sent with my mismatched quote I am told that I cannot be put through to her because she works in the Customer Services department (?!)

Two other points that have made me suspect Save and Prosper's overall incompetence: they have consistently got my postcode wrong and they think my house is called "Banking Cred Cntrl".

So, if you're thinking about getting a pension to provide for your later years, DO NOT take out a Save and Prosper pension. The chances are you will never live to see it.

File under: Save and Prosper Pension Quotes. Watch this space for further developments.