Bank Charges and the Core Exemption: Office of Fair Trading v Abbey National Plc

Date01 November 2008
Published date01 November 2008
DOIhttp://doi.org/10.1111/j.1468-2230.2008.00724.x
CASES
Bank Charges and the Core Exemption: O⁄ce of Fair
Trading vAbbey National Plc
Elizabeth Macdonald
n
Consideration is given to the treatment of the core exemption in Regulation 6(2) of the Unfair
Terms in Consumer Contracts Regulations 1999 in O⁄ce of FairTrading vAbbey National Bank.
Certain aspects of the approach taken to the general limitation of the exemption to terms in plain
intelligible language are looked at,before the scope of Regulation 6(2)(b) itself is addressed.
INTRODUCTION
O⁄ce of FairTrading vAbbey Nation al PLC
1
is concerned with terms imposing cer-
tain bank charges and the UnfairTerms in Consumer Contracts Regulations 1999
(UTCCR). It illustrates two signi¢cant advances in consumer protection of the
last decade or so, one cultural and one legal. On the cultural front it shows the
power of the internet to galvanise consumeractivity, with many consumers being
prompted to try toreclaim bank charges by the information and form documents
supplied by consumer advocates on the internet. On the legal front, the founda-
tion of those claims is basicallythe UTCCRwhich provide for terms in contracts
betweenconsumers and sellers or suppliers to be foundu nfairand not binding on
the consumer. UTCCR provided for a major shift in the consumers legal land-
scape as the policing of terms was not restricted to a particular type of term
(unlike the Unfair Contract Terms Act 1977) and they not only provided for
claims by individual consumers but also allowed policing at the preventive level
by such bodies as the O⁄ce of Fair Trading (OFT), ensuring that consumers do
not continue to repeatedly encounter the same standard form unfair terms. Such
preventivelevel policingis often far more e¡ective than relying on action by indi-
vidual consumers. In this case, however, the action has been brought by the OFT
following not only its own investigation of such bank charges but also multiple
assertionsby consumers,and claims in the county courts, thatcertain bank charges
are unfair and ine¡ective under UTCCR.The basic issue raised in the case is very
signi¢cant. It goes to the heart of the e¡ectiveness of UTCCR.
The case
The case involved an action by the OFT against seven Banks and one Building
Society (theBanks).The main issue which had to beconsidered byAndrewSmith
n
Professor of Law,Swansea University.
r2008 The Author.Journal Compilation r2008 The Modern Law Review Limited.
Published by BlackwellPublishing, 9600 Garsington Road,Oxford OX4 2DQ,UK and 350 Main Street, Malden, MA 02148, USA
(2008) 71(6) 987^1014

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