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I have a week or so to defend myself against NatWest who are claiming £28,600 under a guarantee I made for a former Internet Company (RIP 2001).
The £28,600 is;
£11,800 charge for bouncing some 30 cheques up to three times each (£1,900 charge + £9,900 interest),
£9,400 for being overdrawn, as above mainly caused by the charges themselves (£1,700 + £7,700 interest),
£4,200 the difference between normal overdraft interest (base + 5%) and excess overdraft interest applied to the actual oustanding balance (although the account was within its limits and Company liabilities were covered by guarantee),
£3,200 the actual outstanding balance including normal overdraft interest, which I offered to settle in 2004 (the amount at that time stood at £2,700),
Interesting features are;
As above, £1,900 + £9,900 interest was the charge for about 30 cheques being bounced,
One example is where NatWest sent two letters on the same day. The charge on one letter was £27.50 x 3 = £82.50 for three unpaid cheques. The charge on the other letter was £27.50 x 2 = £55 for two unpaid cheques. Two of the cheques were bounced on both letters and were therefore each charged £55 on the same day. The same two cheques bounced again on separate occasions. On both letters it clearly states that the fee is to cover "administerative work".
At best sending two letters with the same two cheques strongly suggests that very little administrative skill and time can be being applied. Thus £27.50 per bounced cheque cannot possibly be proportionate for "administrative work" as is it stated on the letter. Put another way £137.50 (the charge on this day) must surely buy sufficient administrative time and skill, to ensure that multiple letters are not sent out showing the same cheques bouncing more than once on the same day.
Another example is where a cheque was bounced 6 times over a period of 62 days (cost with interest = £1,100) note that this was during a period when all liabilities were covered by a guarantee.
The account was treated as over its limit when the bank continuously transferred amounts from the loan account to the previously positive current account, even though there was no net change in liability and while the liability was covered by personal guarantee.
Natwest overcharged interest by about 10% - that is 33.3% p.a. against its published rate of 29.5% p.a. on excess borrowings). If this overcharge is across The Royal Bank of Scotland Group then the overcharge could be in the £100’s millions,
I believe my internet company, which returned a small profit of £17,000 in its last year of trading, would still be profitable had it not been for Natwest's disproportionate charges.
During the process NatWest sent me details of another customer in debt arrears. Name, address and account numbers (Data Protection Act?).
The first claim against me, made through Shoosmiths 18 months ago was for £12,000. They made errors, missed court deadlines, gave false reasons for missing deadlines, and ended up delaying the process, then added £16,000 interest in their amended claim. The delays were caused by their original error (apparently due to insufficient space on the bulk centre form).
The Judge at the Allocation and Direction hearing in April rejected this reason for the amendment and has thrown out NatWest's claim for costs.
At the same hearing I asked NatWest to provide a breakdown of the costs included in each type of penalty charge. The Judge followed the hearing with an order to NatWest "to include in their amended particulars a breakdown of the charges for administering [my] unpaid cheque and....
NatWest has not provided this with the particulars of claim or anything else requested. I'm told by Shoosmith they are simply preparing a list of each charge for a bounced cheque, not the breakdown of admin costs included in each charge, which I have repeatedly asked for and clarified.........
I saw the excellent discussion in peep's thread titled "PLEASE PLEASE PLEASE HELP ME.......before its too late!!". I assume my defence draws reference to the OFT V Abbey + 7 others and that I will have to counterclaim the bank charges.
Any help on my defence would be really really appreciated....
Thanks,
When the Liberals and Conservatives were in opposition, they both agreed that banks should pay back high bank charges to customers. Nothing seems to have happened since they came into power as a coalition. PPI Insurance has been sorted. Now they should turn their attention to bank charges and help customers get exorbitant charges refunded.
Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.
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Haven't had a time to fully digest what you posted, but on first glance it looks like they have behaved despicably.
I'm also very interested to see that the judge has ordered a disclosure of their actual administration costs, and it will be very interesting to see what happens here. It will be interesting to see if they do comply, or if they start to make offers ?
DO DO please keep us all updated on what happens here, as the outcome of this could provide some interesting info for all business claimants.
Welcome to CAG. I have only had time to absorb the basics of NatWest's claim against you. As I understand it you have accrued a debt of £25,400 as you were a personal guarantor of a company's borrowing needs. This has obviously spiralled into the debt of £25,400. It appears most of this debt is made up of charges, overcharging and overdraft interest. I must say the interest they have applied is phenomenal, can I ask when these charges were incurred? Am I right in saying that you believe the only legitimate part of this debt is approximately £2,700 (as it was in 2004)?
If this is the case you should immediately apply to the Court to have this claim stayed (suspended) pending the final outcome of the Commercial Court litigation - Office of Fair Trading v Abbey National and others.
To clarify business accounts ARE most definitely a part of the test case as the issue of penalties at common law is being determined in the test case, penalties at common law form the basis of all business claims for the recovery of bank charges. However I must stress that this issue has already been dealt with in the test case (last month) in relation to the banks current terms and conditions i.e from November 2006 onwards. And the Office of Fair Trading will not be appealing this so the judgement is final. The judgement as regards penalties in relation to the banks historical terms and conditions (pre-November 2006) is expected in July. So you may be able to buy yourself some time until July at least. You can see it is crucial to identify when these charges were incurred.
It is interesting to say the least that the Judge has ordered Natwest to disclose a breakdown of its charges as regards the administering of your cheques. I am assuming what your saying is that the judge’s order means a disclosure of the banks actual costs to administer a bounced cheque. If Natwest do disclose this this will be of immense importance as up until now any request of this nature has not been complied with in any single case. If they do comply can you please inform us immediately. Also pop a copy into the Office of Fair Trading will you!
Overall it seems like the bank has not only applied its usual disproportionate and unfair charges and interest but has then gone even further breaching its own terms and conditions. This is wholly unacceptable and that part of your claim should easily be countered. In the first instance as I mentioned above because they are pursuing you for a debt that is largely made up of charges, overcharges and interest on these charges you should request the court stays this claim pending the final outcome of the test case.
If you have any further questions or need any further help please post them up and myself or someone else will do what they can to help you.
Welcome, and I wish you luck, there will be a few of us watching this will great interest. If Shoesmiths are only compiling the list of charges then the Judge will not be amused I am sure given the Order he gave them to produce a Breakdown. My hunch is on that point alone you will be made a settlement offer before it gets that far just so they don't have to declare it.
Another phrase which comes up quite regularly with similarly extortionate charges and 'happenings' with accounts is that of ' Unjust enrichment'. It might be worth delving into exactly what that means and then dropping it into your claim somewhere or even at the hearing...it has a rather sweet ring to it during conversation with the Judge.
I wish you luck with this, pity we don't get compensated for all this work effectively we lay men and women do to match the legal might of these banks and solicitors - the stress can be quite intense and not just on the individual, but husbands and wives too....Good Luck my friend...
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Hi photoman, citizenB, TheyrCriminals and andrew1,
Wow it's great to have knowledgible friends and strategists to talk to - big thanks.
I've toyed with a further stay but;
The last stay resulted in an increased claim from ~£12k to ~£28k (being interest @ 33% over ~3 years - not that I think a judge would ever accept this increase, especially given that Natwest caused the stay by missing their deadline to respond to my defence + errors made by NatWest - but there is always that risk on a bad day),
I had understood from Shoosmiths that if the OFT won, they would pull out – so I could be close to a resolution.
There’s a strong chance that if I take the fight to them now they will settle, otherwise I run the risk of delays until the appealed against the OFT case is settled – presumably the banks fancy their chances, then it could go all the way to the Lords and take many years,
I want the case out of my hair. It is currently due to go to court in about July/August - which is as good a time as any for me. Further delays would perpetuate our stress, continued uncertainty over family finance and reluctance to push as hard on the career as I would like to as I might have to distract myself for another few months another time.
I’m going to put my draft defence on a website tomorrow, complete with some of the evidence, Judge’s order etc. I’ll post the link in this thread, if anyone is kind enough to take a look and suggest improvements.
I too have a business account that has incurred charges over the years as well as "arrangement " fees from the bank
we are currently trying to sell our house to clear the loan and get a fresh start but had not made any moves regarding business charges for fear of rocking the boat with the bank
am i right in seeing that people are making contact with banks and asking fro charges to be refunded and getting them
do i start this process or wait for decisions re oft ruling etc etc ?
Hi, after 6 months prevarication from Natwest the judge is asking me for my defence by 19 Decmber '08.
Any comments and help would be really appreciated.. Here is my draft.......
Draft PARTICULARS OF DEFENCE made in the absence of outstanding information requested from the Claimant
1. The entire Claim of £28,551 is made of disputed bank charges and interest.
1.2. The disputed bank charges element of the Claim is £3,623 for cheque return and excess borrowing fees. Fees were erroneously applied to the account when it was well within its facility limits and the amounts charged were excessive in relation to the extra adminstrative cost.
1.3. The interest element of the Claim is £25,370, resulting from the Claimant applying a disputed APR of 33% to the disputed charges in paragraph 1.2.
1.4. The Claim excluding interest is £3,181.
2. But for the disputed bank charges and interest the Claimant would have owed the Company £442. This already accounts for standard bank charges of £930, without which the Claimant would owe £1,372.
3. In 2000 I entered into two personal guarantees with the Claimant totalling £33,000. My understanding of the agreements with the Claimant and the sole reason for me agreeing to these guarantees was in consideration for the Claimant providing Interactive Magazines ("the Company") with total banking facilities equivalent to the total guaranteed and for the duration of the guarantees.
4. I dispute the Claimant’s bank charge for excess borrowings as the Claimant erroneously treated the Company’s account as over its limit and refused to honour certain cheques when borrowings were less than the total guaranteed.
5. £25,370 of the Claim is for interest charged at the rate of 33% APR. I dispute the basis of charging interest as it is unclear and inconsistent with agreements and communications. The original Claim made in January 2007 was £12,604 based on an overdraft rate of Base plus 6.5%. In its latest Claim the Claimant has doubled its interest charge to £25,140 by increasing the rate to 33% APR and backdating it.
6. £1,942 of the Claim, or £11,878 after interest, was the Claimant’s charge for it not paying 26 cheques. The Claimant charged the Company £30 each time it refused to pay each cheque. The notice sent out with each charge makes clear the Claimant's basis; "As dealing with unpaid cheques means extra administrative work, I have charged a fee of £30 to your account to cover these costs." I dispute these charges and have refused to pay them as I do not believe that the account was over its limit and don't believe the charge accurately represent the cost of extra administrative work. The bank has refused to justify its charge even after I have repeatedly asked it to.
7. £1,681 of the Claim, or £9,334 after interest, was the Claimant’s charge for administering the account during the year it treated it as over its overdraft limit. Again I dispute these charges and have refused to pay them as I do not believe that the account was over its limit and don't believe the charge accurately represent the cost of extra administrative work. The bank has refused to justify its charge even after I have repeatedly asked it to.
8. District Judge Zimmels sitting at Lambeth county court, ordered that by consent "Permission to the Claimant to file and serve by 25th April 2008 amended particulars of Claim to include a Breakdown of the Claimant’s charges for administering Defendant’s unpaid cheques and the daily charge for unauthorised overdraft as well as details of the contract giving use to the contractual rate of interest claimed." This order has been repeated a number of times with a final extended deadline of 13 November 2008, as yet the Claimant’s answers to this Court Order are incomplete and erroneous.
8.1. The Claimant does not detail the contract giving rise to the contractual rate of interest claimed.
8.2. In its schedule of charges, received in September 2008, the Claimant merely lists charges rather than provides the requested breakdown of charges for administering unpaid cheques. Charges were £27.50 rising to £30 for each time a cheque was not paid. The breakdown of administrative costs is required to demonstrate whether or not the Claimant’s charges accurately reflect the "extra administrative cost" as is stated on the notice for each charge. I have repeatedly made this request clear to the Claimant.
8.3. Similarly the Claimant fails to provide the requested breakdown of daily charges for handling excess borrowing, charges were £100 per month.
8.4. Even the Claimant’s Schedule of charges is incomplete as it only contains the £1,151.55 charged to the Company after the Claimant finally forced it out of business on 1 March 2001. All the £2,493 unpaid and disputed fees charged to the Company when it was in business from 27 September 1999 until 28 February 2001 are missing.
9. Further to the above Court Orders I asked the Claimant repeatedly for a detailed statement of account for the whole claim of £28,551. I have not yet received it.
10. Despite trading difficulties caused by the Claimant not honouring cheques, the Company made a profit and paid into the account held by the Claimant a net total of £16,065 in 2001, in the Company’s last year of trading. Had it not been for the Claimant breaking its agreement to provide finances and for the disproportionate size of its cheque return and excess borrowing fees, the Company would have continued making an ever increasing profit prviding me with a similar increasing annual income.
COUNTER CLAIM
11. I dispute the entire Claim of £28,551.
12. In addition I counterclaim for £15,000 for damages as part compensation for loss of trade from 2001 to 2004 caused by the Claimant breaking the terms of its agreement to provide on-going finance in consideration for my guarantees.
13. Interest pursuant to Section 69 of the county Courts Act 1984 at the rate of 8% per annum from 2001 to payment both before and after judgement.
When the Liberals and Conservatives were in opposition, they both agreed that banks should pay back high bank charges to customers. Nothing seems to have happened since they came into power as a coalition. PPI Insurance has been sorted. Now they should turn their attention to bank charges and help customers get exorbitant charges refunded.
Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.
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When the Liberals and Conservatives were in opposition, they both agreed that banks should pay back high bank charges to customers. Nothing seems to have happened since they came into power as a coalition. PPI Insurance has been sorted. Now they should turn their attention to bank charges and help customers get exorbitant charges refunded.
Advice & opinions given by citizenb are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.
PLEASE DO NOT ASK ME TO GIVE ADVICE BY PM - IF YOU PROVIDE A LINK TO YOUR THREAD THEN I WILL BE HAPPY TO OFFER ADVICE THERE
Defence seems pretty good to me at first glance, and without knowing the intricate details of the circumstances and history.
It is totally despicable that the bank have continued to charge such high rates of contractual interest upon the sums throughout the course of the stay, when such delays have been caused by their own actions.
Thanks for passing by.
No track as yet.
In the last direction hearing Natwest asked to stay the case.
I asked for at least the non-OFT part to go to court (as I've seen discussed here before).
I'd prefer it to go to the Small Claims Court, based on the Claim excluding interest being less than £5k - but I guess my counterclaim puts it into Fast Track. NatWest is asking for Multitrack based on the full £28k. NatWest have not yet provided a statement of account, so the Court's cannot see how I arrive at my calculation of Claim excluding interest.
NB: the Judge has disallowed NatWest's legal costs because they were the party that has been delaying the case - I guess my legal costs will also be disallowed.
Thanks CitizenB and 42man for moving this to legal.
Any chance of anyone giving me some practical advice, especially for the counterclaim.
The reality is that had the bank not returned my cheques and charged me such high fees but instead provided the finance in exchange for my guarantees, then I would have have increased annual profit from £16k in 2001. A similar company to mine sold out for ~£13M in 2006. Clearly there has to be some limit to the bank's liability, and I don't want to overcook it.
Also does going over £15k counterclaim force the claim into Multi Track, and result in me having to take a week off work/holiday when it would otherwise be in Fast Track - obviously not an issue if I stand a chance of recouping my missing £10Ks......
Hi all, I have a direction hearing v Natwest for a business account on Wednesday 28/1/09 2pm at Lambeth county court.
The Judge has previously ordered NatWest to provide a Breakdown of their admin charges twice, following direction hearings in April and September. The wording was a bit too loose before - and NatWest just listed each charge.
Can anyone help me get the forum to collectively help me/us on Wednesday to prize the actual admin cost of bouncing cheques and administering overdrawn accounts - for all our sakes - from what is afterall a bank +70% owned by the tax payer.
Sorry but I don't think that there are many people able to help. In any case you seem to be well on top of things yourself!
As to your immediate request, if the judge has ordered Natwest to provide a Breakdown of their charges then they have to do it. You should be loud and vocal on this point.
Can you keep us posted on the outcome of this as I (and I'm sure many others) are following this with interest.
I really do appreciate all those 'thank you' emails - I'm glad I've been able to help. Apologies if I haven't acknowledged all of them.
You can also ding my gong if you prefer.
If Natwest have been ordered to provide a breakdowbn and all they have done is to list the charges again, they are clearly in breach of the order. You should ask for their case to be struck out under CPR Part 3.4(2)(C)
(2) The court may strike outa statement of case if it appears to the court –(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b) that the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has been a failure to comply with a rule, practice direction or court order.
You cold argue that their obfuscation is also an abuse of the court's process since they obviously have no intention of seriously defending you claim.
Steven
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£25,400 penalty charges claimed by NatWest
under a guarantee I made for a former Internet Company (RIP 2001).
interest (base + 5%) and excess overdraft interest applied to the actual oustanding balance (although the account was within its limits and Company liabilities were covered by guarantee),
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Re: £25,400 penalty charges claimed by NatWest
