Banks deny customers' rights over payment cancellations

BBC Business reports that two of the UK's biggest banks have admitted denying some customers their right to cancel recurring payments.

But since 2009, banks have been legally required to cancel CPAs when a customer asks. Customers seeking to cancel continuous payment authorities (CPAs) have been told by banks such as Lloyds TSB, Bank of Scotland and Santander that only the payee can agree such action.

The new rights were enshrined in the Payment Services Regulations, which came into force in November 2009, but have been subject to ongoing discussions between the banks and the Financial Services Authority (FSA).

Mike Dailly, a consumer lawyer at the Govan Law Centre, who also sits on the FSA's Consumer Panel, told Radio 4's Money Box programme that the obligations for banks were clear. "You have the right to cancel one of these continuous payment authorities and you can go to your bank, they can't put up any hurdles," he said.

"They should have a simple procedure for you to do that. You don't have to have the permission of the payee."

Mr Dailly said he has experienced a problem when trying to help a client who banks with Bank of Scotland, also now part of the Lloyds Banking Group:

"I can think of a case of a pay-day loan company where the consumer was paying that through one of the government schemes yet the pay-day loan company is still taking money from the person's account”.

"Now that person went to the Bank of Scotland and asked for them to cancel the CPA and they said 'You can't do it. You need to get the permission of the pay-day loan company.' Now, that's wrong in law."

International report recognises GLC prevention of homeless work in Glasgow

Govan Law Centre’s award winning prevention of Homelessness Partnership section 11 project is highlighted in a new international report published this week reporting on tenancy sustainment programmes.

The report by Chris Povey of the Winston Churchill Memorial Trust Of Australia, entitled ‘Investigating tenancy sustainment programs and approaches in relation to clients at risk of homelessness’, describes Chris’ Homeless Persons Legal Clinic based in Victoria. The report also considers and focuses on work being undertaken in Glasgow as well as in Edinburgh, the North of England, New York, Washington and Toronto.

In Glasgow the report highlights our approach to homelessness prevention which delivers prevention in a unique way.

The report considers how our project developed ground-breaking and innovative approaches to preventing homelessness in Glasgow, in particular, the dedicated ongoing coordinated approach is described in the report “as the lynchpin” to the success of our homelessness prevention work.

Alistair Sharp, senior project manager at GLC said: “For Govan Law Centre’s prevention of homelessness partnership s11 project to be considered in such a high profile international report is testimony to the hard work of GLC and all of the partners involved, and is fantastic recognition of our partnership working and model of early intervention to prevent homelessness and homelessness prevention in Glasgow”

The Prevention of Homelessness Partnership Project was set up in 2005 by Govan Law Centre, Govan Money Matters Advice Centre and the South West Community Health and Care Partnership (SW CHCP) to pilot s11 of the Homelessness etc., (Scotland) Act 2003.

The s11 Project was set up to achieve, and tasked with, halting repossession and evictions and preventing homelessness through the provision of high quality legal representation, money and benefits advice and access to specialised support services and specialised dedicated coordination of support services. It has prevented over 2000 people and their families from being made homeless. The project was awarded the Scottish Social Services Council Accolade for Partnership Working in Adult Care in 2010.

The full report is available here; and Govan Law Centre’s Prevention of Homelessness Partnership can be found at page 49 et seq.,.

Decree for repossession refused in Glasgow civil trial and expenses awarded against lender

Decree for the ejection of an East End Glasgow woman from her property and the repossession of her home was refused at Glasgow Sheriff Court yesterday following an evidential hearing (known as a 'proof' in Scots civil law).

Most of the defender's mortgage was being now paid by the Department of Works and Pensions albiet there was a small shortfall and the lender, Platform Funding Ltd (an intermediary lender of the Co-operative Bank plc) argued that it did not believe the mortgagor could sustain her mortgage.

Platform Funding Ltd argued in court that the defender had not personally made any payments to her mortgage since 2010 and that as the action had been in court for two years they were entitled to decree for possession.

After hearing the evidence in the case and adjourning to consider the matter, and legal submissions, Sheriff Gilchrist refused the lender's request for decree notwithstanding it would take six and half years for the defender to repay her mortgage arrears.

The court followed the landmark English Court of Appeal decision in Cheltenham and Gloucester Buliding Society v. Norgan [1996] 1 All ER 449, which was persuasive authority in Scotland to the proposition that the starting point for determining a 'reasonable period' to clear arrears was the remaining term of the mortgage, which in this case was 9.5 years.

The court awarded ordinary cause level Sheriff Court expenses against Platform Funding Ltd for the cost of the proof, and suspended the lender's enforcement powers and continued the cause for six months to monitor payments to arrears. 

The defender was represented by Govan Law Centre's Mike Dailly, and the pursuer was represented by Ms Malone of Morisons LLP Solicitors.