Money That's What I Want

As readers will recall I had a 'disputed transaction' with my bank over a number of theatre tickets from an internet company called Seatwave paid for with my card, transactions which I did not make.

When I reported the disputed transaction I subsequently received a letter which initiated the very much anticipated “nothing to do with us” response. The letter stated:

I would like to point out that this transaction has been initiated through ‘Verified by Visa’ or VBV. With transactions like these where VBV has been used as a verification tool, all details processed are fully authenticated against your personal information held with [my bank] before authorisation will be granted

As a result [my bank] do not have any immediate chargeback rights which would enable us to retrieve your funds. We are therefore only able to advise that you continue your dispute with the merchants directly if further resolve is needed.

If I could help you further I would, but unfortunately my hands are completely tied, as in accordance with the operating rules and regulations we have no chargeback claim against the merchant’s banker’s for this circumstance.

Nice try. Clearly there is reluctance to even investigate and instead to try to pass the buck hoping to fob us off. The law somewhat differs. My response sent yesterday was as follows:

Dear Ms xxxxx

Ref: XXXXXXXXXXX

Thank you for your letter, dated 30th October, regarding the dispute on our debit card with Seat Wave Tickets debited 28th October 2013.

It is with considerable regret that we cannot accept your explanation that you are unable to reimburse our account due to your hands being tied because it was “Verified by Visa”.

My wife and I did not authorise this transaction. Not only were we unaware of the company Seat Wave Tickets until it appeared on our statement (we had to Google it), but crucially my wife is disabled, thus wheelchair-bound, therefore any trip to the theatre requires liaising with them directly due to disability requirements. This is a situation reflected in our joint account records which show no such transactions with theatre ticket internet sites for many years.

As I’m sure you are aware FCA Rule BCOBS 5.1.11R states:

"(1) Where a banking customer denies having authorised a payment, it is for the firm to prove that the payment was authorised.

(2) Where a payment from a banking customer's account was not authorised by the banking customer, a firm must, within a reasonable period, refund the amount of the unauthorised payment to the banking customer and, where applicable, restore the banking customer's account to the state it would have been in had the unauthorised payment not taken place."

Succinctly put it means that it is for [my bank] to prove we did authorise this transaction, which cannot be proved precisely because we did not. Therefore we consider this an unresolved unauthorised transaction.

Please take this letter as a formal request to investigate further and reimburse our account accordingly. If you are unable to do so then we request that you escalate this unauthorised transaction via normal internal escalation procedures.

We look forward to your prompt reply.

Yours sincerely

The letter was sent by Special Delivery and arrived just before midday today, at around 2pm our account was credited with the full amount.

I have to say it has been resolved a little quicker than I expected. I anticipated I would have to request a 'Letter of deadlock' before taking it to the ombudsman.

It doesn't stop banks trying it on though.

Disputed Transaction

Annoyingly, I've just discovered that one of my cards has been cloned and used to buy a number of theatre tickets from an internet company called Seatwave, which I confess I've never heard of until I Googled it.

Given the card used I know it must have been cloned having paid for some petrol at the Tibshelf service station on the M1 on my return from Harrogate - what is it with service stations? It's not the first time.

So now I have to face the irritations of waiting for a new card and for the money to be refunded from my bank. I’ve noticed that since the introduction of chip and pin there has been a greater insistence of the card provider disputing the ‘disputed transaction’ to place the onus on the card holder to prove that they weren’t negligent or fraudulent, despite that the onus is on your provider to prove that you have been:

But, despite clear rules that state banks can only refuse to refund a customer if he or she has acted "fraudulently" or had been "grossly negligent", there is growing evidence that the banks are taking a tougher line and refusing a refund – in some cases for the sole reason the thief used the card with a merchant the account holder had also done business with.

Even in the face of overwhelming evidence that the account holder was miles away at the time, and it could not have been them, some banks have been insisting their customer is liable.

Interestingly the Cairn Hotel in Harrogate tried to insist on keeping my card (a different one) behind the bar when I requested to open a bar tab - absolutely no chance. The barman in question looked a little puzzled when I informed him that to do so would be negligence on my behalf and a breach of the terms and conditions to allow my card out of my sight.

Anyway, like last time, I have informed my bank that should they continue to drag their heels, and especially if it has to go up to the Ombudsman, I will be invoicing them for my phone calls and my time in dealing with it. I charge a reasonable hourly rate.

China In Your Hand?

As Richard North notes the forthcoming announcement of the construction of a giant new nuclear plant at Hinkley represents a staggering escalation in costs. However leaving aside the continuing folly of the UK’s energy policy it’s intriguing that much comment has been made about the fact that it is Chinese, not UK, investment that is involved, as indicated by this Telegraph piece (pictured above):

But others were less sanguine about China possibly coming to dominate Britain’s nuclear industry. “It’s troubling how far the Government is bending over backwards to allow this,” said Paul Dorfman, research associate at the energy institute of University College London.

Que much teeth-nashing - sorrowful that a country which was once at the forefront of nuclear power is now having to rely on Chinese investment to "kick start" our nuclear industry. But as is typical of our increasingly isolationist and "Little Englander" media, it ignores the wider picture. And it misses the insidious, and in this case the subtle, nature of our membership of the EU.

The UK and China have been forging a closer relationship for some time now; and crucially it has been doing so in the process of an increasingly close relationship between China and the UK government to support internationalization of the Chinese currency – Renminbi (RMB).

China is seeking to replace the US dollar, with the RMB, as the major world reserve currency. To help fulfil the criteria it is doing so with increasing co-operation of the Hong Kong and London financial markets, as noted by the South China Morning Post:

With Hong Kong’s support, London has become the leading offshore RMB centre in terms of payments with Hong Kong and China.  According to the Society for Worldwide Interbank Financial Telecommunications (SWIFT), London now accounts for 28 per cent of offshore RMB settled transactions.

Thus China has an enormous vested interest in the health of the UK financial sector. One can imagine therefore that it won't be best pleased to see the increasing efforts of the EU to impose ever draconian rules deliberately designed to damage one of the UK’s most important parts of its economy:

George Osborne has launched an unprecedented legal challenge against European plans for a financial transactions tax.

The move, which will be seen as a further sign of fraying relations between the UK and the rest of the continent, is designed to force the European Commission to reconsider the levy on Europe-related financial activity.

And:

Chancellor George Osborne stood isolated after European Union finance ministers vowed to press on with proposals to curb bankers' bonuses.

He told a meeting of EU finance ministers that he could not back the plans, which he fears could damage London's financial centre.

By cosying up to the Chinese - which is not to everyone's liking - Osborne has a big player on our side when defending the City from EU laws. A big player that is effectively helping to prop up the Euro. A bigger game is being played here.

If one is to be generous we could argue that George Osborne has played a bit of a blinder, however a more realistic criticism would question whether the heavy reliance on the Chinese been so necessary if we weren't members of the EU?

Daylight Robbery

The Cyprus Bank Heist...

Iceland And The EEA

It's been quite heartening and uplifting in the last few days that a handful of bloggers, and committed commenters, have rattled Open Europe's cage to the extent that they now acknowledge, albeit very very grudgingly, far from having no influence Norway does in fact have a say within the EEA Agreement. Given the tone of Mats Persson's Telegraph article, one suspects that Open Europe is not used to having its 'eurosceptic' credentials questioned, particularly with simple things like facts. This is especially important given that our esteemed Prime Minister reads blog comments.

Autonomous Mind has another example of Norway saying no to the EU regarding EU plans for harmonisation of environmental policy relating to oil and gas energy:

The Norwegian government has taken the view that the proposed regulation by the European Commission falls outside the geographic and substantive scope of the EEA agreement.

As AM notes:

Oh dear, David Cameron and Open Europe caught out lying again. You would think the media would be all over this, unless of course they have vested interests or are getting pressure from their owner barons to exercise bias by omission and ignore this important story…

Open Europe also seem oblivious that the EEA is not just Norway, but also Iceland and Liechtenstein. And it is to Iceland we turn our attention as it is involved with one of biggest rejections of the EU there has ever been by an EEA member. The dispute relates to the collapse of the Icesave online savings account in 2008 which infamously prompted the UK to invoke terrorist legislation against it. Crucially, when Icesave collapsed, EU countries, notably the UK and the Netherlands, attempted to force Iceland to fulfill its EU obligations. The arguments centered around two legal arguments:

1. ...that the Icelandic government is obliged to guarantee at least the first €20,000 in Icesave accounts;
   
   
2. ...that Iceland's actions surrounding the collapse of Landsbanki are discriminatory against non-Icelandic creditors.

The first challenge comes under EU Directive 94/19/EC, which was incorporated into Icelandic law in 1999, the second is that Iceland is in breach of its obligations under Article 4 of the EEA Agreement which says:

Within the scope of application of this Agreement, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited.

The second is in accordance of Article 7 of the Treaty of Rome. Iceland's reluctance to reimburse foreign countries for money lost in its banks prompted, at the time, the following conversation between Alistair Darling and the Icelandic Finance Minister Árni Mathiesen (now hidden behind the Times firewall):

(AD) Do I understand that you guarantee the deposits of Icelandic depositors?

(AM)Yes, we guarantee the deposits in the banks and branches here in Iceland.

(AD) But not the branches outside Iceland?

(AM) No, not outside of what was already in the letter that we sent.

(AD) But is that not in breach of the EEA Treaty?

(AM) No, we don’t think so and think this is actually in line with what other countries have been doing over recent days.

Curiously, Alistair Darling in his book, Back from the Brink doesn't mention this conversation nor indeed any reference whatsoever to the EEA. Yet Iceland wasn't for backing down - a resolution of the Joint Parliamentary Committee of the EEA (opens as a Word Document) adopted unanimously on 28 October 2009 emphasised:

...the Directive’s lack of clarity over the legal obligations of governments if national guarantee funds, which are funded by contributions from relevant credit institutions, do not suffice for payments following a banking crisis, and more importantly if an entire banking system of a country collapses;

And:

...underlines that the shortcomings of the Directive became apparent in October 2008 when the banking crisis in Iceland spilled over to the economies of other EEA States;

In other words Iceland, via the EEA, is contesting both charges, charges that are still ongoing amid complex legal arguments after four years and two referendums later. A judgement that rather than be passed by an EU court will be ruled on by the EFTA court instead, and is due on 28th of this month. Iceland's case for the defence can be found here.

And that is the point, Iceland is a small country with a population of circa 313,000; a country with fewer people than the London Borough of Croydon which has 363,000, yet here it is with resilience, influence and the ability to say no. One can only look on in envy.

Iceland's main problem is unfortunately its size. That it may have to capitulate is less to do with flaws in the EEA/EFTA agreement but instead that it is being bullied, shamefully by, as the Icesave episode demonstrates, the UK. Being a member of the EU will not resolve that, ask Ireland, Czech Republic or Luxemburg

However, that Iceland can stand up for itself, while the UK will have no choice, but to adopt the attributes of a nodding dog within the EEA, is quite frankly absurd.

More to follow...

One Small Problem...

At the bottom of this article by the Daily Mail, about so-called 'Zombie Britain' are these words of wisdom from our beloved Prime Minister on helping to boost our flagging economy:

Competition could be boosted by breaking up nationalised banks and giving customers a single transferable account number, David Cameron suggested yesterday.

The Prime Minister signalled that he favoured the idea of making it easier to switch between banks.

He added that ministers would consider the need to increase choice on the High Street as they sought to return RBS and Lloyds to the private sector.

It echoes a comment made by another Tory MP Andrea Leadsom, a Treasury Select Committee member back in September this year:

...Andrea Leadsom has called for regulators to force banks to allow customers to keep their account number if they switch to a new bank...[she] told the Mail on Sunday that portability would make it easier to switch accounts and would enhance competition. She said it "might take a regulatory push to make it happen".

Her stand follows a poll released by Which? last week, in which 59 per cent said that they would be more likely to move banks if they could take their account number with them.

One small problem.

Here's an EU Commission staff working document from 2005 (Annex to the proposal for a Directive of the European Parliament and of the Council on Payment Services in the Internal Market - Impact assessment {COM(2005) 603 final). It says:

It was decided that legal requirements for the “ portability of bank account numbers ” should not be taken up.

The reason being...? (my emphasis)

The benefit of the introduction of a mandatory rule ensuring the portability of bank account numbers is to facilitate mobility of customers. Currently the cost for changing from one bank to another is very high. Bank account portability is expected to facilitate competition. However, studies carried out in some Member States (UK, NL) regarding this question of portability have shown that the recently introduced EU-wide IBAN-BIC[94] numbering system is not compatible with the portability of account numbers without incurring in disproportionate costs and provoking problems for efficient straight through processing.

The Commission believes that after the considerable investments in the development of the IBAN-BIC numbering systems, time is needed for this system to prove its effectiveness. It would not be appropriate at this stage to impose a modification of the system. Nevertheless, the IBAN-BIC system appears to be a very complicated system and may need to be simplified in the long run. Therefore the Commission advises the banking industry to launch studies in order to create, in the long run, a more simplified numbering system for payments in the Internal Market.

Introducing portable account numbers would mean current International Bank Account Number (IBAN) and BIC standards – which have been adopted by the European Committee for Banking Standards as the standards for the Single Euro Payments Area (SEPA) formats - would have to be abolished and replaced.

In other words it ain't going to happen anytime soon.

Going Going...?

Back to the Euro crisis, events appear to be moving to a conclusion. It's getting hard to work out what exactly the state of play is and what is going on; we're now reduced to guesswork essentially, as Xen rightly concluded in a previous comment on here, and the scary thing is it appears that those in charge don't seem to know either.

What is clear though is that the news chatter is intensifying greatly which indicates panic is setting in significantly. I suggested before that sandbagging maybe happening with gusto but one wonders if they know what they are supposed to be sandbagging against, especially with these rather unusually stark comments from Sir Mervyn King:

Banks should brace themselves to withstand the "extraordinarily serious and threatening" economic situation, the Bank of England governor has said.

Which prompted this analysis:

If anyone was in any doubt about the severity of the eurozone crisis and what it might mean for the UK, they shouldn't be any more.

The governor of the Bank of England delivered his starkest warning yet. It's quite something for a central banker to describe the financial climate as "extraordinarily serious and threatening".

Sir Mervyn King made no attempt to play down speculation about the possible break-up of the eurozone. He thinks banks can weather storms ahead if they set aside more capital. But he acknowledged that the problems were widespread and beyond the control of any UK authority.

To sum up the financial regulators' message - fasten your seatbelts for what could be a very bumpy ride.

It's getting obvious that no-one has the first idea what they're doing and are in denial about the urgent and fundamental problems of the Eurozone....that then leaves only one conclusion and one inevitable outcome. Gulp!

The Bleeding Obvious

I'm fully aware that I'm in danger of keep repeating myself, but the lack of any concrete proposals to resolve the Euro crisis one way or another means every day appears to be ground-hog day. Again this weekend there were reports of a €2 trillion rescue bid, a report that seemed strangely familiar from one in mid -September. Again there's disagreement between the Germans and the French on a resolution - and the Germans are back-peddling on anticipation of an agreement during next weekend's crisis meeting:

Spokesman Steffen Seibert said a "package" of measures would be agreed upon at the EU summit in Brussels this coming Sunday.

"But nevertheless, the chancellor reminds [everyone] that the dreams that are emerging again, that on Monday everything will be resolved and everything will be over will again not be fulfilled," Seibert said.

Yet the markets are acting (again) like they anticipate an agreement, despite experience to the contrary as the BBC's Robert Peston observes:

Something slightly odd is going on.

Markets are behaving as though European governments will definitely agree a rescue package for the eurozone next weekend and that the rescue package will sort all Europe's financial and economic woes.

But, by contrast, when I talk to ministers, regulators, bankers and investors they all say - which is a statement of the obvious - two things: that such a rescue cannot be taken for granted; and (perhaps more importantly) that whatever is agreed will not solve the eurozone's fundamental problem.

What's noticeable is that the tone of language used to describe the crisis is getting darker, Peston talks of possible Armageddon:

To state the bloomingly, bleedingly obvious, a domino effect of collapsing banks, triggered by their inability to borrow because of creditors' fears that the banks could not withstand sovereign defaults, would be the kind of Armageddon that would obviously be better averted.

Even the hugely Euro- sympathetic Independent talks of possible meltdown and the return of a Great Depression:

The rush to unwind would create massive doubts over the health of individual institutions, leading to a drying-up of credit. Lending would collapse, bankruptcies would soar and co-ordination among European policymakers would be nigh-on impossible to achieve. We would face financial anarchy on a scale big enough to throw Europe – and much of the rest of the world – into another Great Depression.

So we need a solution. And it's a solution that must accept collective responsibility. The north may want to blame the south but that is the wrong strategy. In the event of a euro meltdown, the northern creditors would suffer as much as anyone else. Berlin and Paris will now have to take political risks to come up with a solution. But it's better to take political risks – including a sharing of the burden between creditors and debtors – than to face monumental economic failure.

The concerns of a lack of solution is echoed by a fine piece in the Telegraph, in which Liam Halligan rightly concludes that there are only, in essence, two options:

There really are only two coherent endgames, the first being that the euroland moves rapidly towards a fiscal union, the eurocrats’ dream. The prospects of that being successful are zero. Anyone who thinks otherwise knows nothing about European history and even less about contemporary politics.

The only other durable scenario is...

...that the euro, in as orderly fashion as possible, is broken up. That, in my view, is the “something” now required, before this grotesque monetary experiment causes not just economic stagnation, or even a global financial meltdown, but fully-blown human conflict.

Both of these options for different reasons are unpalatable; the first is particularly to the Germans and the second is to the EU. So what is happening is a game of trying to 'magic' a third solution which doesn't exist. Cue another round of weak proposals, superficial announcements, market turmoil and the lack of any coherent strategy. But time is running out fast.

We're sleep walking into a chaotic collapse of a major currency - the results of which will cause social and politician outcomes that don't even bear thinking about.

The solutions are obvious, and the results of failure to implement solutions are obvious. I make no apologies for continually trying to point them out. I do not want another "fully-blown human conflict" on the European continent.

The EU Bank Tax Is No Robin Hood

I had to check more than once that I was reading the right newspaper:

...anyone who thinks that the EU financial transactions tax is a good idea for this country is stark raving bonkers.

As the Eurozone moans and groans under a Himalayan-size debt mountain, Brussels has come up with a wheeze to avert disaster – a tax on all financial transactions across the EU.

Where would the tax hit hardest? In Europe’s leading ­financial centre – the capital of our country

The EU in its present form is on its last legs. Greece is just the start. History will record that the euro was like everyone on the same street sharing a bank account. One day very soon the poor old Germans will get sick of bailing out their free-spending neighbours.

...the idea that we can have real economic growth in this country without a buoyant ­financial sector is simply bananas.

Without economic growth, this country is stuffed. Cuts to our public services will never get us out of this mess. There has to be real economic growth or the million young people currently on the dole will spend their entire working lives on benefits.

I understand and share the general antipathy towards the banking industry. But driving ­business to Hong Kong or New York is cutting off our nose, ears and lips to spite our face.

An EU financial transactions tax would cripple this country’s economy. It would kill growth stone dead. It is an idea cooked up by the unelected, increasingly desperate fat cats of Brussels. It would do untold damage to our country for generations.

We must ask ourselves – do we really hate bankers so much that we want that to happen?

Default Option: If In Doubt, We Can't Do It

Yet again a news item dominates the day's news and yet again there's always a problem that is treated as if it's He-Who-Must-Not-Be-Named - We mustn't mention it.

Today's news; retail banks should be ring-fenced, however some of the detail contained in the proposals breach EU law.

Reading stuff like this I often want to hold my head in my hands but I fear that doing so is probably in breach of EU law also.

I truly despair - if I'm allowed to as an EU citizen.

Bank Charges

I note that the excitable Martin Lewis was interviewed last night on BBC News at Ten regarding the UK Supreme Court’s ruling on bank charges, here’s what he had to say:

I think we need to spit, I think we need to kick, I think we need to make sure that every MP in this land knows quite how angry that we are over this…

All well and good I’m sure. MPs will no doubt be aware of the anger but as EUReferendum points out there’s not a lot they can do about it even if they wanted to:

According to the judgement handed down, the issue depended "on the correct interpretation (in its European context) and application of Regulation 6(2) of the Unfair Terms in Consumer Contracts Regulations 1999 SI 1999/2083."

However, we then see that: "The 1999 Regulations were made under section 2(2) of the European Communities Act 1972 in order to transpose into national law Council Directive 93/13/EEC on unfair terms in consumer contracts."

The UK Supreme Court has in effect based its judgment on EU law, specifically Council Directive 93/13/EEC, and unfortunately no amount of pontificating at MPs is going to change that - they are powerless.

As Dr North also points out, no reference is made to this EU Directive in the media, so how many millions of people this morning will be directing their anger in the right direction? Judging by the BBC Have Your Say site, not many.

There lies the insidious genius of the EU.