OFT gives up unfair bank charges fight but FSA will intervene in hardship cases

Despite the Office of Fair Trading giving bankers an early Christmas present by deciding to drop its investigation into unfair bank charges, the fight does not have to be over for those in hardship. Anyone struggling financially can still have their claims heard by the independent complaints arbitrator, the Financial Ombudsman Service (FSA). Some banks, however, have already begun writing to people whose claims are on hold to tell them if they don’t get in touch in writing within a matter of weeks, their claims will be considered closed—and all without any reference to the FSA’s pronouncements on the subject.

What the banks aren’t telling people in their letters is that the FSA is writing to those 15,000 people with claims on hold as well. Complaints were stayed, meaning frozen, between July 2007 and the end of November this year when the Supreme Court (composed of rich and powerful judges, of course) ruled. Banks were given permission to sit on charges claims during that time, with the OFT claiming this measure was somehow good for everyone involved. Of course in reality only the banks did well out of it and went on, having been charged with assessing hardship cases, to routinely ignore or stonewall applications, saying “you’re not poor” to ripped-off customers and ignoring all evidence to the contrary.

Complaints to the FSA relating to the legality of charges will most likely fail but claims from those in hardship made by the 15,000 already in the system and any new attempts may be heard. Even if your case is considered though, it does not mean you are guaranteed success in getting your fees back but the FSA says it will order banks to repay fees in some circumstances. You may also get your claim heard if you unintentionally slip over your limit and the charge is disproportionate to the ‘offence’ (for example, you go £5 over but are charged £35). The FSA says these cases are not “black and white” and those who continually slip over their limit but aren’t in hardship are unlikely to be successful.

You can usually only complain to the Ombudsman eight weeks after complaining to your bank or building society or if you’ve received a firm rejection. This writer received an umprompted “we won, get lost” letter from First Direct (part of the HSBC group) only last week and will be writing to let them know I do intend to press ahead with my complaint, that it is not to consider the matter closed, and that I will be approaching the FSA to take things further.

Of the two banks I am fighting, First Direct refused to respond to my application to be assessed for hardship, breaching the rules and obligations imposed upon it during the claims freeze by the FSA. HBOS did go through the motions only to repeatedly inform me I have no money worries at all (evidently untrue).

Many of those 15,000 on hold claimants won’t proceed any further of course. They’ll be tired and despondent and broken, and it’s understandable if they’ve had enough. It’s true that our chances are slim because for one thing the FSA is another mostly toothless wonder. My personal take is this, though: the day you retreat and stop fighting injustice, not solely perpetrated against yourself but against others as well, is the day you stop living a meaningful life. Others will disagree, I have no doubt. It is nevertheless what I choose to believe. Never surrender to those who are in the wrong. I’m glad to know I’m not alone in holding this position because a number of consumer action groups are going to keep fighting as well.

The banks cannot silence us unless we let them. Just don’t lose sight of what’s good in your life—it’s far too easy to find yourself overwhelmed—and come what may, smile.

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