Posts Tagged ‘fair’

Bank Charges – What did the Law Lords Say?

November 26, 2009

Mouths appear to have dropped open everywhere at the decision of the law lords on bank charges. Certainly it is difficult to understand on what basis the decision was made.First let us be clear what they – appear, anyway – to have said. This is only that the Office of Fair Trading does not have legal power to investigate value for money.

What they have NOT said is whether the charges were, or were not, value for money. Nor whether the charges were fair or unfair.

Indeed, their decision is correctly being described as a technicality. In other words, no matter what the case itself is about, the manner of conducting either the case, or the matters contributing to the case, were incorrect on procedural grounds. At least their opinion is that it is incorrect in that way.

I am not a law lord; evident as it may already be to you, I want it to be clear!

But I have great difficulty in seeing how the Office of Fair Trading is not empowered to investigate value for money. This has been at the heart of trading rules and laws for as long as recorded history.

From the standards for weights and money itself, to the arcane details of contract, value for money has been at the heart of legislative process. How can fairness be expressed without reference to value for money?

I am not even sure this is in keeping with the new Lending Code!

My advice is to move your accounts away from the big banks. Many of the building societies have much more reasonable approaches. And the Co-op Bank may be another good repository for your current account. Certainly you are going to have to spend time and though reading the terms and conditions.

Perhaps we should look to a funny little comment by a correspondent on TV tonight. This was to the effect that the cost to the banks would be billions of pounds, and that was concerning the highest ranks of government.

Perhaps once again we are seeing the unreasoned triumph of the banks over the people. Welcome to the new feudalism.

A very saddened  Joseph Harris – Debt Control Man

Author: Control Your Debt Crisis on Your Own Terms

http:www.controlyourdebtcrisis.co.uk

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New Lending Code 10: mental health, court action

November 20, 2009

182. The subscriber should also only initiate court action to pursue the debt as a last resort and when it is appropriate and fair to do so. [Reproduced with the kind permission of the British Banking Association -see link below]

The only time I can see that court action is justified is where it can be clearly shown there is BOTH ability to pay AND wilful avoidance of resolving the matter on the part of the debtor.

Whatever the history of the creation of the debt – and there can be more than one side to this – the issue at the collection stage is about both the position of the debtor, and the reasonable actions to determine resolution.

Now bear in mind that resolution may be achieved in many ways. The debt may be completely written off, without any call on the debtor in the future. It may be frozen on any basis from not chasing it at all, to regular contact; here the intervals of contact should relate the fact that freezing is going to be a response to small likelihood of payment. Annual contact should be sufficient.

There may be token payments, of say £1 a month. But here the use of this should be sparing, as this can cause problems for poor and disabled debtors. It is likely that the debtor has more than one creditor. Not only may the total pounds be noticeable, but the costs of paying can add 50 percent or even more.

The Debt Management Plan is not available where monthly repayments total less than £100 a month. At lower figures there is no way of using an intermediary, including charities, to distribute the total repayment.

Where there are a number of creditors it would be a good move for creditors to organise a clearing house for these payments. And that would permit something even more in keeping with fairness.

A debtor is generally required to treat all their creditors equally. But if only a pound or two a month can be afforded it is hard to divide; unless there is a clearing house that gathers many such payments, doing the computer-easy calculating and accounting, and passing sums on in bulk to the appropriate creditors.

It isn’t brain surgery. And not even rocket science!

Joseph Harris, Debt Control Man
Author: Control Your Debt Crisis on Your Own Terms
http://www.controlyourdebtcrisis.co.uk

The new Lending Code is here http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=1758
The MALG 2007 submission to the review of the code is here http://www.moneyadvicetrust.org/download.asp
And the Treasury Select committee view is here http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtreasy/274/27406.htm#a18