Modification by consent of certain DISP rules
Which firms does this apply to?
We are making this waiver by consent available only to providers of current accounts with overdraft facilities ('the firms').
Background
The waiver is part of a package of measures designed to support a test case through the courts. The test case aims to establish legal certainty on the lawfulness and fairness of charges levied by current account providers for unauthorised overdrafts.
The Office of Fair Trading and several major UK current account providers announced the test case on 27 July 2007. Alongside this, these providers are looking to stay county court cases on unauthorised overdraft charges and will also ask the Financial Ombudsman Service (the FOS) to stay its determination of related complaints while the test case is carried out. The firms have agreed to conduct the test case in an efficient, prompt and orderly manner.
The purpose of the waiver is to allow current account providers to stop resolving complaints about unauthorised overdrafts charges while the test case continues through the courts. Until the test case is completed, participating firms will put unresolved and new complaints on hold. Complainants who already have an offer from a firm (but not yet accepted or rejected it) will be given the option to accept the offer or to wait for the result of the test case. If they choose to wait, the offer will lapse. It will then be dealt with under the principles established in the test case.
We are supporting this approach as we hope it will give customers consistent and fair outcomes.
What does this mean for firms?
The main practical effect of this waiver is to allow the firms to stop resolving complaints about unauthorised overdraft charges. We have reserved the right to revoke the waiver after two months if the county court and the FOS stays sought by the firms do not happen, or if we believe continuing with the waiver is inappropriate. We will renew it after 12 months if we are satisfied the criteria for granting the waiver are still being met and we think continuing it is not inappropriate (see Section 7 of the modification direction).
What does this mean for consumers?
The waiver contains several detailed conditions intended to ensure complainants are not materially damaged by the delay in dealing with their complaints. We set out these conditions in the modification direction. To take advantage of the waiver, the firms must comply with these conditions.
At suitable stages we, and the firms, will update consumers on the progress of the test case. Consumers can find out more on the Moneymadeclear product news page. The firms we grant a waiver to will also write to any customers who already have a relevant complaint or who complain about this issue during the waiver, to give them more details.
How do firms take this forward?
If your firm wishes to take advantage of this waiver please write to:
The Waivers Team
The Financial Services Authority
25 The North Colonnade
Canary Wharf
London E14 5HS
Or email centralwaiversteam@fsa.gov.uk.
For us to grant the waiver, you must state you will comply with all the conditions attached to it and give us the full legal names of all the entities within your group that the waiver should apply to. We will write to tell you whether we will grant your firm a waiver and we will publish each waiver we grant on our website.
Details of waivers we have given as of 11 September 2007
DISP Waivers [PDF]
