Below is text of as my
letter before action due to be sent out tomorrow. Let me know if you see any howlers. There is some good stuff in the OFT report especially around double recovery, Clause 3.17 & 3.18 below.
LETTER BEFORE ACTION
April 20, 2006
Paul Summerfield,
Customer Relationship Manager,
Barclaycard
1234 Pavilion Drive
Northampton
NN4 7SG
Dear Paul Summerfield,
I acknowledge receipt of your letter dated 11th April and In which you offer the sum of £120.00 to settle my claim for £276.26 on the condition that I agree to a confidentiality agreement.
I regret that I do not find this proposal acceptable. I am giving you a further 14 days to settle this dispute to my satisfaction. If I have not received what I consider a fair settlement by then I shall start legal proceedings to recover the full amount without further notice.
Below I deal with some of the points raised in your first response to my letter.
You claim that your charges have been levied fairly and that your true cost is more close to £12.00, rather than the £24.00 charge that you have been applying to my account.
Please could you provide me with evidence to back up your position that your costs approach £12.00. I would accept for each of the 9 charges evidence of your actual costs which would include but are not limited to:
computer logs, time of transaction, evidence of any manual intervention, including name of person who intervened, time taken to reach decision, their salary, calculated at a cost per minute, any general office overhead and any other information that is used to show the true and actual cost incurred by your company for each of these 9 penalty charges.
If as I suspect the charge imposition is a fully automatic decision taken by a computer with no manual intervention then your actual costs are probably very close to zero.
In this situation your penalty charges do not reflect your actual costs as in liquidated damages but are indeed penalties that are designed to punish and intimidate your customers for transgressions, have a very high level of profit built in and are therefore unlawful at Common Law, and contrary to Statute and recent Consumer regulations.
I draw your attention to the following extracts taken from clauses contained within the OFT ruling.
Clause 1.11 - “ The setting of a £12.00 threshold is a provisional measure to move credit card companies towards compliance. We are not proposing that default fees should be equivalent to the £12.00 threshold and a court will not consider that a default fee is fair just because it is below the threshold.”
Clause 3.8 - “ We have difficulty in seeing any general damages that could flow from exceeding a credit limit of a credit card agreement.”
Clause: 3.9- “ In general a party to an agreement who fails to pay an amount due is not usually liable to pay ANY damages to the creditor except such
interest as may be payable.” ( this
interest having been already been paid to Barclaycard out of my account.)
Clause: 3.17 - “ In considering costs arising from default, a credit card company should be careful to avoid any benefits arising from a ‘Double Recovery’..
Clause: 3.18 - “These benefits may arise out of operating a risk based pricing policy, that is offering a higher APR to a particular class of consumer based on evaluation of their credit risk.”
My card agreement was at your highest APR ( 27.9% ) so it seems that you have already built in a higher profit margin on my account to cover any possible default charges. So you are possibly in effect charging twice for the same items.
I repeat my request that you refund me all of the Exceeded Limit and Late payment charges levied on my account from the period of 2nd December, 2004 to 5th April 2006.
I calculate that you have taken £216.00 from my account for these unfair illegal charges. You have also charged me
interest at an Apr of 27.9% on these amounts. This amounts to £60.26. Please repay the full amount of £276.26 by cheque mailed to my address on this letter.
In the event that I have to take you to court I will also claim interest as allowed under section 69 of the County Courts Act 1984 at the rate of 8% per year for the period mentioned and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £0.06
Faithfully yours,
Gareth Eckley
1st letter sent to barclaycard 
Re: 1st letter sent to barclaycard 
Re: 1st letter sent to barclaycard 
Re: 1st letter sent to barclaycard 
