Bank Charges:(

[600+]

Hi folks,

I received a letter today from a Financial Services Company where I have a 0% interest loan.

They were due to take £29.80 on the 4th of January but I was on holiday and completely missed it.

So they are now charging me £20.00 to cover administration costs and another £22.50 for the returned direct debit.

No need to say that they are ripping me off so I was wondering if anyone knows of a site that helps with claiming back unfair charges. Think I so a web addy on the forum before but can't find it:(

Cheers

[CoolGirl]

you missed the payment so your fault, but the charges do sound excessive. try

www.moneysavingexpert.com

if it's not them, they'll certainly point you in the right direction.

EDIT - just checked and it's up there on their front page. good luck.

[kwak zzr]

banks are ok if you are on the right side of them, you miss a payment for what ever reason and then they cash in. :(

[600+]

I have received a letter from you today stating that you were unsuccessful in receiving the monthly amount of £29.80 and hence you have charged me £20.00 to cover administration costs relating to this transaction and another £22.50 for being unable to receive the Direct Debit Payment.

0n 5 April 2006 the Office of Fair Trading (OFT) announced that default charges which are set at more than £12 will be presumed to be unfair and unenforceable in terms of the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Charges above this sum will be subject to legal action by the OFT (press release 68/06 – online here: http://www.oft.gov.uk/News/Press+releases/2006/68-06.htm).

The OFT stated that a charge is not fair simply because it is below this sum, and I believe that a reasonable charge would be 50 pence for the reasons set out below. Please refund my charges as a matter of urgency.

I would respectfully submit that if your organisation does not agree to immediately refund all unfair charges applied to my account, it will not meet the ‘fit and proper person’ test to hold a consumer credit licence under the Consumer Credit Act 1974. In that eventuality, I will submit a 1974 Act complaint to the OFT.

Separately, I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. In particular, charges were applied after I entered into a transaction(s) without sufficient funds in my account. However, payment was declined by you, and therefore, actual loss is the cost of automatically sending me a computer generated letter. I would respectfully submit that is valued at no more than 50 pence.

UK banks have recently given evidence to the House of Commons Treasury Committee on how bank charges are calculated: "The costs are going to pay for all the people we have who pursue debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by taking these total costs and making some assumptions about the volume that is going to come through to arrive at the individual charges" (2nd report, 25 January 2005, paragraph 50 – online here: http://www.parliament.the-stationery-office.co.uk/pa/cm200405/cmselect/cmtreasy/274/27405.htm).

Accordingly, the charges applied to my account are not a reasonable pre-estimate of the bank’s loss in relation to my account. No-one has had to look at my account or telephone me. No one has had to collect anything. Your charges would appear to represent a device to recover global losses (for example, loan defaulters, bad debt write off, including commercial lending in, and outwith, the UK).

Please refund all charges applied to my account within the next 7 days. I reserve the right to commence court proceedings without any further notice, and to seek an additional award for distress and inconvenience, together with legal expenses.

Yours faithfully

[gettin2dizzy]

the bank charges have to reflect the costs to the bank -legally. When i've had these before :oops: i sent them a letter saying i wanted an itemised bill to tell me where these costs come from and they always write back refunding the charge with a letter saying that its the one and only time they'll do it. Natwest charged me £38 this january! it was only because of all the bank holidays that the money didn't clear in time :P

[600+]

Natwest charged me on top of the 42.50 above and I just told them to refund it or I switch bank

I think they then realised that with a few saving acoounts from all the family members they would be losing quite a sum of money;)

[northwind]

I'm thinking you're not dealing with a highstreet bank here, going by the amount and the 0%. HP? Some sort of consolidation? You need to be careful with HP or similiar, because while you can easily dispute the charge you're still in breach of contract and that can lead to you losing your 0% or a demand for instant repayment (followed by all sorts of complicated stuff)

The letter above's very effective- looks to be a newer version of an older template that I've seen. Anyone getting a charge should try it on general principles. But you do have to remember that there's more to it than the charge. Sometimes it's better to suck up the loss in order to avoid other penalties. You don't read about it so much in the press but in some cases financial institutions are responding to the way the tables have been turned on them as far as administration and punitive charges, by going to default conditions faster- and that's no good for someone who's just trying to save £30. This happens more in some cases than in others, a regular unsecured loan's not worth doing that with since the loss outweighs any gain, but there's plenty of conditions where the default conditions will rip you an extra hole.

[Ed]

Northy here is right. I know of one bank which has given 30 days notice of closure to a customer who maintained very low balances and complained about charges, no doubt on the basis that customers who complain wipe out low profit margins.

I used to defend these sort of charges as part of my job, when I worked for a building society which eventually became a bank. In my experience few customers asked the right questions and even some of the drafts I've seen - such as the above - still miss some of the points. No I'm not going to say what they are. Also you need to pass a credibility test. Are you really going to sue, are you prepared to pay the issue fee and go through a litigation process? It's all very well spouting the common law, but with respect it's obvious that this is an internet letter. For example, who can tell me what '(1904) 12 SLT 498 ' means????? Or, what about '[1915] AC 79'? And what is the relevance of Scottish law to an English case? (Law students need not reply :lol: )

[northwind]

There's basically 2 sorts of complaint like Ed says... The ones you listen to, and the ones you don't. I used to deal with refund cases daily and the decision of whether or not they were getting their money back at an early stage was usually made in about 10 seconds. Like, people who said they were going to the ombudsman for nonregulated products, for instance, got told no- they obviously had no idea what they were talking about. The templates are good but I'd use them only as a basis for the letter. Also, usually keeping things simple is good. If you make 1 point and it's a good one, that's better than making 5 and having one be rubbish, since that undermines your whole position and costs you credibility. This applies pretty much universally, not just to this situation...

I always considered our charging process outrageously unfair- single mum comes into branch in shellsuit and complains, she won't be getting her money back since her business is basically worthless and she's not likely to sue- but she needs the money more than the middle-ages businessman who we'd usually pay out for, as they're valuable and also troublesome. So I was a very soft touch sometimes.

[skint]

you missed the payment so your fault, but the charges do sound excessive. try

www.moneysavingexpert.com

if it's not them, they'll certainly point you in the right direction.

EDIT - just checked and it's up there on their front page. good luck.

This sounds familiar to me. There is a geezer sometimes on the Jeremy Vine show on Radio 2 midday. They featured a guy who basically demanded repayment of excessive charges and got £k's returned. This was followed up by other similar stories. The I saw a BBC.co.uk news article about.

Banks may only charge the basic recovery cost. You can go through a number of years statements and highlight all the excessive charges and demand repayment. The show seemed to say that banks will repay without much fight. I think the web site provides all the details of what to do plus template letters etc etc. so go for it. :)

I emailed the story to my home pc at the time and this is the link it gave...

http://news.bbc.co.uk/go/em/fr/-/1/hi/business/6170209.stm

[rpwoodman]

Saw this on the BBC news web site recently:

http://news.bbc.co.uk/1/hi/business/6170209.stm

rgds

[northwind]

A certain high street bank- who I don't work for btw :) - has decided to reject every single one of those letters, since they've made the (probably quite accurate) assumption that most people won't follow it up. If they do, then the bank will fold and pay out immediately to avoid legal costs.

[jenni]

see I'd love to do that...the only problem it that the bank who stung me are the same ones i work for :(

I just get it back in drinks at the christmas parties instead

[Red ones]

And of course the Bank can refuse future tade, and/or close any existing account. If they offer you 0% is it really worth the fuss?

[northwind]

see I'd love to do that...the only problem it that the bank who stung me are the same ones i work for :(


When I joined the Bank (pre merger) it was a disciplinary offence to get bank charges :shock: And they'd only pay you into a staff bank account held by them. All totally illegal o'course but they did it anyway, since people will tend not to argue.

[Stig]

Interesting.

Check my signature.

[600+]

Northy, Ed I value your opinion and comments so let me give you the full picture.

This is a Finance Deal which I got through Hein Gericke when I bought £300 of gear. They offered 10 months 0% finance so I took it. I have always been punctual with my payments and the only reason why I don't clear the balance at this stage (about £150) is because I prefer the money in my savings account than with the Finance Company.

So if they decide to ask me to pay off the whole amount and they should close my account then fine by me.

I will take it as far as possible - and that means that I will go to small claims court and will read any laws relevant to the case because I DO NOT accept that their charges are fair and actually cover their expenses for not getting my Direct Debit on the day. Plus when I received the letter today I rang them immediately to make sure they had the money and paied them by card over the phone.

BUT £42.50 to cover admin costs?? FFS how much do they pay per hour their staff??

[600+]

Interesting.

Check my signature.

I knew I saw a site somewhere:)

Cheers mate I'll be on there posting soon

[northwind]

Is it Black Horse that do the finance? Or Capital Bank? Sounds like it'll be one of the two... Yeah, fire at will in that case :) Are you paid up to date now? It'd be a good idea to do that first if not, generally, then go for it.

[600+]

It's Clydesdale Financial Services and I'm paid up to date yeap

[northwind]

Clydesdale! Marvellous. So I was right when I said not a proper high street bank :)

[timwilky]

OK, Ed. I talked with the daughter tonight re your two cases. As her LLM has a large section on unfair contracts we had a little discussion .

As I understand it, the Clydebank Engneering case was on a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.

This being your second cited case.

Ok the two case I understand. however what I fail to understand is the relationship between Scottish and English law, and where precedence may lie. But I am the engineer, it is the lass who is the bar student and she can't explain it beyond a similar principle of jurisprudence may be accepted in an affiliated court. Interesting that I find the above precedence cited all over the pink world. ( ok you young pups. My school atlas used pink to shows those countries that were part of the British Empire, something to be proud of, not make excuses for.)

Sorry, the above makes sense to a pished me. but may not to others

So, it is unfair to impose a penalty for breach of contract. and it is therefore only fair to impose a charge that reflects the costs that where accrued as a result of said breach.

[Ed]

Wilky, you get a gold star!!! Entirely correct. And Scots law on breach of contract is the same as in England. So it's very persuasive, so much so that it's accepted as good law here.

A client has referred another scam to me today. She lives in a leasehold property, and had the audacity to query the service charge. The managing agent simply referred her to a debt collection agency which sent her an automated letter and is trying to screw her for their costs of £125 + VAT - that's £146.88. And they reported her to the mortgagee, a well known high street lender, which then wrote to her to say pay up or we'll pay it for you and we'll charge you £75 admin fee too.

Beggars belief :shock:

[600+]

Reply arrived today in the post!!!

Out of good will they are refunding half of the charges!! Question here is IF you are sooo on the right why do you refund me????

Letter is below for your perusal all
http://upload5.postimage.org/342429/File0010.jpg (http://upload5.postimage.org/342429/photo_hosting.html)

[Ed]

Not bad for the cost of a stamp :wink:

[600+]

Not bad at all I should say:)

Should I go for the rest through another snotty letter for the cost of a stamp?:)

Or should I just accept it?

Hassle vs Getting ripped off....

[Warthog]

In all the websites, they mention that the bank always offers halfway. If you still want it all, apparently they give it all just before any court action. Not sure that it is worth it for £20. I must say, I had £60 charges in January and because of your thread I also wrote to the bank. I have not heard back yet.

[600+]

And this is quite confusing!!!

If you are soooo right then why go half way - end of the day you are losing money from your business and in my case they don't even gain any interest as it's 0% plan!

Very much tempted though to clear the balance and tell them to sod off

or should I write to them again?......hm :?

[Warthog]

Just dug this up again cos I had more responses. To my first letter I got a "write to the customer complaints department, we ain't giving you anything". I then got another £28 worth of charges taken away for the same original offence! I wrote another letter to the customer services department and just got a reply saying for a full A4 page reasons why they don't agree with me and why its all transparent and legal, and then on the next page, as a gesture of goodwill they are giving me all £88 back! Total victory; I mean £88 cos I went over my overdraft limit once cos a standing order took 3 days to hit my account? Ridiculous amount.

:rave: