FSA GRANTS NEW WAIVER TO FIRMS ON COMPLAINTS HANDLING UPDATE 23.07.09
The FSA has confirmed its continuation of the waiver arrangements for a further six month period, until January 2010, to facilitate the test case process. Santander will continue to work closely with the OFT and the Court to bring a conclusion to the test case process as soon as possible.
In view of this, customer complaints relating to unarranged overdraft fees will currently remain on hold. The Banks will continue to ask County and Sheriff Courts to keep claims relating to unarranged overdraft fees on hold until the test case process is concluded. It is not yet clear when this will be but the Banks are keen that all outstanding issues should be resolved as quickly as possible.
Please continue to refer to our website for further information. We will continue to post updates to keep customers informed of progress on the test case.
BANKS AND BUILDING SOCIETY HOUSE OF LORDS HEARING IN OFT TEST CASE – 23 June 2009
Seven banks and one building society (the "Banks") are engaged in a High Court test case with the Office of Fair Trading ("OFT") to decide the legality of unarranged overdraft charges. During 2008, the Court dealt with certain preliminary issues of legal principle in relation to the current account terms and conditions used by the Banks. On 26 February 2009, the Court of Appeal issued its judgment on this first stage of the test case process and ruled that the Banks’ terms can be assessed for fairness under the Unfair Terms in Consumer Contract Regulations 1999 ("UTCCRs"). The Banks are appealing the Court of Appeal’s judgment.
The appeal hearing is due to start in the House of Lords on Tuesday 23 June 2009 and is expected to continue on 24 and 25 June 2009. During the hearing, the House of Lords will not be considering whether or not the terms are unfair. Subject to the outcome of the appeal, that will be decided by the Court in due course. The House of Lords will give its judgment some time after the Court hearing although it is not possible to confirm when this will be.
The Banks are appealing on this issue as they continue to believe that the fairness test in the UTCCRs does not apply to these types of charges and that unarranged overdraft charges are fair. There is limited guidance from case law on whether and how the UTCCRs apply in these circumstances and as the test case process is of considerable public interest, it is important for the issues to be fully tested.
We will update you about what is decided as soon as possible but further Court hearings may be required before the test case process is concluded.
The OFT investigation into the fairness of unarranged overdraft charges is running in parallel with the test case. Subject to the outcome of the House of Lords hearing the OFT has confirmed it expects to complete its investigation by the end of the year. To streamline and potentially shorten the investigation, which commenced in March 2007, the OFT is now concentrating on a representative sample of current account terms and conditions from three UK banks.
As previously agreed with the FSA and the Financial Ombudsman Service, customer complaints relating to unarranged overdraft charges will remain on hold. The Banks and the building society will continue to ask County and Sheriff Courts to keep cases relating to unarranged overdraft charges on hold until the test case process is concluded.
Please continue to refer to our website for further information. We will continue to post updates to keep customers informed of progress on the test case.
Where can I find out more?
You can find more information through the following links:
Update to OFT test case - April 2009
Update to OFT test case - February 26 2009
Update to OFT test case - January 22 2009
Update to OFT test case - October 28 2008
Update to OFT test case - July 21 2008
Update to OFT test case - May 28 2008
Judgment on first stage of OFT test case - April 24 2008
Update to OFT test case - January 16 2008
The British Bankers' Association