Bank Charges:(

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

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.

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.

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+rel...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.../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

the bank charges have to reflect the costs to the bank -legally. When i've had these before 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

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.

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 )

[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.

Originally Posted by 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.

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/h...ss/6170209.stm