Consumer Action Group statement on UK Government’s planned abolition of Consumer Focus, Consumer Direct & OFT

Scots Consumer Champion Consumer Focus Scotland ‘stabbed in the back by Taxpayers Alliance’. CONTINUING my coverage on the possibly imminent demise of Consumer Focus & Consumer Focus Scotland at the hands of the Taxpayers Alliance with their campaign “Scrap Consumer Focus”, along with the scrapping of Consumer Direct & the Office of Fair Trading, the Consumer Action Group, a UK organisation which campaigns for customer rights, particularly for the recovery of unfair charges imposed by UK banks on their customers has issued a statement on their website regarding the impact on consumers of the loss of most of the consumer protection currently in existence in the UK.

Given the prospect of a distinct lack of consumer protection being forced upon us by right wing political interest groups, I would urge consumers who value their consumer rights & protections to read up on the Consumer Action Group and join in the group’s efforts to truly represent & campaign for UK consumers.

Consumer Action Group’s statement on the demise of Consumer Focus, Consumer Direct & the OFT : It seems that Consumer Focus, Consumer Direct and the OFT are likely to be abolished in an announcement to be made later next week. This is an astonishing piece of bad news for consumer rights. It will bring further difficulty to the lives of millions of ordinary citizens throughout the country. It will gladden the hearts of financial institutions and retailers of goods and services everywhere as they take the opportunity to reduce spending on customer service. It will also increase opportunities and incentives to scam innocent customers.

Is this what David Cameron means by his "Big Society"? The removal of all protections from his trusting electorate so that corporate jackals are free to prey on vulnerable victims. Who will be left to protect them? Well apparently the government proposes that consumers will have to rely on Trading Standards and on Citizen's Advice. Will there be additional funding and will the funding be enough? Probably not.

Are Trading Standards and Citizen's Advice up to the job? Are they suitable? Citizen's Advice is a very decent organisation but they certainly don't have a reputation for assisting consumers to challenge companies which try to deprive them of their rights. This is unlikely to change because it would mean that the entire mindset of Citizen's Advice would need to be altered.

What about Trading Standards? Well for far too long, this organisation has not been directly accessible by the public. They do not have that culture. They are a specialist organisation which is geared up to carrying out investigations of routine malpractice by commercial organisations. However, they don't deal with the sort of one off problems nor the vast range or the number of problems experienced everyday by British consumers.

Of course, even Consumer Direct has not been known for baring its teeth and "getting the job done" - so maybe no great loss there. The OFT - well frankly they are almost an embarrassment to consumer rights - especially since their inept handling of the Bank Charges test case. In fact the main impact of the expected announcement is to confirm to us all what we have always known - You're on your own, Mate.

So who is left?

Well it looks like it is going to be down to the websites and of course that means the likes of The Consumer Action Group and Money Saving Expert. We'll do our best but clearly there isn't going to be much support from the people who should give it - the government. We are the Big Society - but Cameron clearly doesn't seem to realise that the big commercial organisations have a different game plan and it's You, the Consumer that they intending having for their lunch.

Banks copy lawyers tactics, excluding Consumers from financial services because they were caught ripping off Clients ...

Lets have a go at Banks today, for a change ... since they are one of the financial partners and sponsors of the legal profession not only in Scotland but throughout the UK ... and whenever Banks have a go at us - they always use lawyers of course !

In an alarming move, UK Banks have decided to copy the tactics of lawyers who face legal action from clients over stealing funds ... by closing clients accounts in a similar way to those who sue lawyers find themselves eventually unable to obtain any legal representation at all.

This move, by UK Banks, comes on the back of the growing number of customers who are using the courts to force Banks to repay exhorbitant penalties which the Banks have imposed over the years due to overdrafts or having what the Bank would deem as too little in their accounts to meet payments.

Since the Office of Fair Trading said that consumer law should only allow banks to recover actual costs, rather than also impose penalties on top of this ... consumers have begun either taking Banks to court, or threatening legal action to recover anything over ￡30 which the Banks have imposed on their borrowing.

Banks are responding by claiming that customers aren`t keeping their part of the bargain of using the Bank`s services by embarking on such a court of action ... but judge for yourselves by reading the following article from BBC News reporting on this matter.

We all know that Banks have loaded the charges against customers over the years - that`s one of the reasons that so many Banks are turning in billions of pounds of profits - because they are preying on the poor - and continue to load the charges on such customers who find themselves in many positions to be in an unrecoverable spiral of debt to Banks & other financial institutions.

Maybe it`s time for you to get out your bank statements and see exactly what penalties the Banks have imposed over your accounts for so many years - and if it`s anything over than ￡30 ... then it`s time to take action.

Make sure you also tell your neighbour and spread this story as much as possible - since the Banks and thier friends have been hitting the general public for so long .. it`s time to give them back some of their own medicine - by using the OFT`s own position against them.

Of course, the OFT will also have to do something about the Banks behaviour, which has seen them begin to copy the actions of the legal profession when a client either complains against a lawyer, or tries to sue a lawyer who has ruined them. Banks Banks, the legal profession and other financial institutions all share information on clients & consumers - and just as surely as consumers are excluded from obtaining legal services when they catch out a crooked lawyer, consumers who make life difficult for Banks by forcing them to to repay exhorbitant penalties will also face the prospect, as is reported in this BBC article, by being excluded from obtaining financial services in the UK or further afield.

Banks cannot be allowed to deny financial services to the masses - simply because they have been caught out ripping off clients to fatten their annual accounts and Directors salaries ... Peter Cherbi recommends you should all make representations to the OFT to get them to consider this issue and make policy to protect consumers from being excluded from the Banking & financial sector.

You can visit the OFT`s website at : http://www.oft.gov.uk/default.htm and you can also email the OFT at enquiries@oft.gsi.gov.uk

Please also contact your consumer organisations - such as the Scottish Consumer Council, who are at : http://www.scotconsumer.org.uk or the consumer association for England & Wales - at: http://www.which.net/

http://news.bbc.co.uk/2/hi/programmes/moneybox/5067454.stm

Banks fight back on court action
By Paul LewisBBC Radio 4's Money Box

More banks are fighting back against the growing number of consumers who are using the courts to force them to repay penalties.

The charges are made when customers go overdrawn or have too little in their accounts to meet payments but the Office of Fair Trading has said consumer law only allows the banks to recover their actual costs not impose a penalty as well.

Lawyers and consumer groups claim penalty charges of ￡30 or more break this law and some customers have got back thousands of pounds by threatening court action

Banks and building societies pay up rather than go to court but some - including Abbey and Nationwide - are now closing the accounts of customers who sue them.

Another, Alliance & Leicester, confirmed to BBC Radio 4's Money Box that it had already closed the accounts of dozens of customers who had taken similar steps.

"The cost of fighting the court case, of having the litigation... is not worthwhile" - Ginny Broad, A&L

Ginny Broad, its head of corporate communications, told the programme: "We are talking about people who are very happy to accept the benefits of the Alliance & Leicester current account but aren't happy to keep their side of the bargain, which is to run their account responsibly."

And she defended the practice of paying up then closing the account rather than going to court.

"The cost of fighting the court case, of having the litigation and so forth individually is not worthwhile... our charges reflect the overall level of costs... We believe [they] are both reasonable and lawful," she said.

But the campaign to recover charges is growing.

'Rule of law'

One bank customer, Robert, told the programme he had recovered more than ￡3,000.

"I went through about the last five years and added up all these bank charges... and was horrified to discover that it came to about ￡2,500," he said.

"Then I calculated the interest, and I wrote to the bank and said 'You owe me ￡3,000 give it back'. The bank said 'we will give you ￡2,000'. So I said 'No, I want it all'. They bottled out and settled in full - [a total of] ￡3,200."

"There are an enormous number of people who have massive difficulties... regularly having their accounts plundered" -
Marc Gander, Consumer Action Group - you can visit Consumer Action Group at http://www.consumeractiongroup.co.uk/

Marc Gander of the website Consumer Action Group said they are not exploiting a legal loophole just demanding their rights: "There is a very clear rule of law that says that the banks are only allowed to make certain charges."

"Once the charges start coming in and particularly if one is on a tight budget it is very difficult to stop the spiral.

"There are an enormous number of people who have massive difficulties, who are on benefits, and who are regularly having their accounts plundered by the banks with impunity.

"I really want to see honest treatment of people [and] a return to the rule of law."

BBC Radio 4's Money Box was broadcast on Saturday, 10 June 2006, and will be repeated on Sunday, 11 June at 2102 BST.

Articles fron the Consumer Association Website :
http://www.which.co.uk/news/money/06/may/banks-overdraft-06053101.html

Bank customers pay GBP 4.7 billion in penalties
31 May 2006
Which? hit the industry with an Anti-Social Banking OrderBanks and building societies hit their customers with GBP 4.7 billion worth of unauthorised overdraft charges in the last year.

The research, released by Which? today, reveals that current account providers are charging between GBP 20 and GBP 30 when a customer dips into the red, and GBP 25 to GBP 30 for standing orders or direct debits paid while that customer is over their overdraft limit.

In April, Which? slapped an Asbo - Anti-Social Banking Order - on current account providers and launched a banking charges website to help consumers challenge these charges and put pressure on the banks to reduce them.Barclays paid out

Since then, almost 30,000 have downloaded information and template letters from the site.

Matt Tones from Hertfordshire received GBP 800 from Barclays - twice the amount he paid in charges. He wrote to the bank using the standard letter on the website and Barclays said that while it didn't agree with him, it was offering him the money as a gesture of goodwill.

Doug Taylor, Which? money campaigner, said: 'Although Matt was very successful banks have remained, for the most part, resolutely silent on this issue in the hope that it will just go away. The sheer number of people downloading the template letters from our site shows that the banks can't ignore this issue for much longer.

'Many thousands of people are fed up with being made to pay unreasonable charges and are preparing to do something about it.'
The full report - 'Fight back against unfair bank charges' - appears in the June edition of Which? magazine.

http://www.which.net/campaigns/personalfinance/bankingcharges/index.html
'ASBO' for UKbanking sector

Which? has slapped an ASBO ? that's an Anti-Social Banking Order ? on current account providers for the way they treat customers using unauthorised overdrafts.

We're calling for the industry to take a new approach to the way consumers are charged when they slip into unauthorised overdraft.

We believe that consumers are suffering distress and alarm as a direct result of banks' actions, and we think they deserve an ASBO !

If you don't have an arranged overdraft facility and you dip into the red, or if you go over an agreed overdraft limit, you'll be using what banks call an 'unauthorised overdraft'.

If you don't have an arranged overdraft facility and you dip into the red, or if you go over an agreed overdraft limit, you'll be using what banks call an 'unauthorised overdraft'. While banks are providing a service to consumers who go into unauthorised overdraft, they're also raking in the cash ? to the tune of an astonishing ￡4.7billion in the last year (as reported in Which? magazine, June 2006).

That's because they slap massive charges and interest rates on accounts that are in the red ? even if the amount of the unauthorised overdraft is just a few pounds and is cleared quickly.

We think these charges are unfair and breach consumer credit regulations. They are disproportionate to the amount it actually costs the bank to deal with an account in the red. Indeed the decision of the Office of Fair Trading to set a ￡12 threshold on credit card default charges strengthens the pressure on banks to reform charges on current accounts. To set a fair charge, we have challenged the banks to open their books and explain how they calculate the amount.

A Which? survey has found that one in four people have used an unauthorised overdraft. Such a high volume of unauthorised overdraft users indicates that poor money management is not the cause ? slipping into unauthorised overdraft is more often than not a genuine mistake.

Dodgy practices

* Banks automatically charge (normally around ￡30) if you slip into unauthorised overdraft, even if the amount of the unauthorised overdraft is just a few pounds.

* Banks may charge a higher rate of interest on your unauthorised overdraft than they do on your regular, authorised overdraft. However, we have found that some banks charge the higher rate on the full amount you are overdrawn. For example, if you have an account with a ￡250 arranged overdraft and you accidentally go ￡1 over, you could be charged the higher unauthorised overdraft interest rate on the full overdraft of ￡251.

* If you slip into unauthorised overdraft you won’t just be charged for going into the red. You could also be charged a similar amount each time a transaction, direct debit or standing order goes through your account while you are in the red.

* Banks do not give you any grace period in which to pay off the amount of your unauthorised overdraft before they charge you.

Which? has written to the regulators calling for:

* The industry to stop applying exorbitant charges and interest rates to accounts in unauthorised overdrafts.

* The industry to stop charging unauthorised overdraft interest rates on the authorised part of the overdraft.

* The Banking Code to be tightened so that banks must give at least 14 days' notice of charges, allowing customers to put their accounts in the black.

As a consumer you may be able to recover charges made against you and at the same time send the banks and building societies a clear message about their activities.