Thread: Contractual interest?

just a quick question

I am about to send a prelim letter to barclaycard.

My charges are for late payments with one exceeded credit limit.

the problem is for me that its difficult to seperate out the cost of interest due to charges since it is incorporated in the overall charges and its mostly within the agreed credit limit.

My feeling is i cant work out exaclty what i have paid easily and since my claim is relatively small i am going to ignore the interest paid.

I intend to claim the contractual rate for the whole lot instead up front but its selecting which rate?

Bcard dont post their unathorised rate unless ive missed it, so i found their cash advance rate, does anyone know the U/od rate or is it fine to charge the cash advance?

Cash advance seems a reasonable comparison to money taken unlawfully from my account.

Glenn

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No it would be the standard rate that appears on your statement. If there was an unauthorised rate they would have to advise you of it so I don't think there is one and I've certainly never seen one mentioned in any of the paperwork from Barclaycard.

Roy

i thnk youre missing the point, i know the standard rate as it appears on the statement. This is compensation for them borrowing my money not an attempt to calculate what interest i paid for refund, im ignoring that bit as it will be small.

If i went over my credit limit i presume they would charge me a rate which was similar to the cash advance rate as well as charging me for the act. Since my account was largely within the credit limit and i cannot see an overlimit rate i wanted to know what it was?

If they dont have one i shall go with the cash advance rate.

Cheers

Glenn

Glenn,

you cannot claim more than they have charged you. There is not an unauthorised overlimit rate - only the standard rate which goes on your total balance.

Roy

I think you are mistaken, the argument for claiming interest at the contractual rate is compensaton for the bak having used your money for the period in queston on the basis that the bank took the moeny unlawfully from your account and sice there are contractual rates of interest these can be applied.

If its good enogh for the banks to charge you the rates then there is no logical or legal reason why you cannot charge them the same rate.

As i understand it Sec 69 interest (the 8%) is inplace to allow a claimant to recoup lost interest where there is nop other mechanism for determining the rate and is only applied when the claimant gets to court.

In this case the contractual rate would be applied and the Sec69 rate would not be applicable.

i am pretty certain that the rate applied to unathroised borrowing is higher than authorised borrowing for many banks/cc companies but its not explicilty spelt out on their websites.

As it goes i have decided to aply their current o/d rate whith i think is around 16% as a reasonable appraoch alikley to be less argumentative if/when it gets to court.

JMHO

Glenn

Glenn,

I don't see how this works out - you can only claim the money in interest that they have actually charged you - as you are claiming interest at the higher rate that means that if it went to court and you claimed the 8% (I know you said you could omit this if claiming for a higher rate but this sounds like unproven territory to me) you would effectively be charging them twice for taking your money. The 8% is the compensation for taking your money illegally - you don't claim compensation in the initial request with the list of charges and interest charged. If you do so it could be interpreted as being deceitful. Added to that if you arbitrarily add any extra on top of what they charged you I can't see it standing up in court.

Also Barclaycard do not have an unauthorised borrowing interest rate. If they did it would have to be mentioned on either the statements or the letters - they cannot hide it.

Roy

the thought process is that basically you claim back what the chagres and the interest they charged you.

In addition to that you can either claim sec 69 interest or you can make a claim for the contractual rate.

its not a question of ommitting the 8% you cannot claim both, but both of them are attempts for you to gain compensation for the bank having used your money since they took it.

because its argued that they took it unlawfully then you are penailsing them in the same way you woul if you imposed sec 69 interest.

Asthere is a thread on thiss issue, its rather long and was started in the general section i think by BF.

It sets it all out far more eloquently than i can, go ahve a look see if it makes sense.

As it goes it does suggest that the cash rate is the correct rate where no excess rate is qouted.

I think i will actually charge their standard borrowing rate which is around 16% i think and will be a lot less contentious i think.

JMHO

Glenn

Yes, claim for the charges and the interest they charged you on the fees that is correct - but you cannot claim for a higher rate of interest which they didn't charge you. Then if it comes to court you add on the 8% interest on combined fees & interest on fees.

Roy

Why not?

You dont seem to be following the logic or argument your simply saying you cant because you cant.

You suffered a loss as a result of them taking your money, you lost the opportuniy to invest or spend the money. The contractual rates is what they charge you and so on the basis that its good for them then it can be applied to your claim.

As I said go read the thread where bankfodder and others are putting the point across.

If you dont agree then fine, but make an argument which at the moment you are not as far as I can tell.

Sorry if this comes across as being arrogant its not meant that way but there isnt any point in me keep restating the ideas unless you make a statment which refutes it and then i have to argue against it or agree your right.

Glenn

Glenn,

I think I made it quite clear - on the initial claim you ask for the fees back + the compounded interest on the fees which they charged you (at the appropriate standard rate - which is found on the statement) as this is what they charged you. Only once you have put a claim in at court do you have the right to ask for the 8% to cover your damages. Prior to that it is your fault for not having complained about it as well as the fact that the judge might take a very dim view of an arbitrary rate of interest claimed on the basis of what you think they owe you. Be exact about what they definitely owe you not what you think they should pay you in damages on top. The 8% has already been accepted as acceptable damages in lieu of them taking the money as per the legal precedence referenced elsewhere.

http://www.consumeractiongroup.co.uk...-interest.html

try this link Roy, see if its clearer because we seem to be going round in circles and one of us is missing the point i think.

FWIW

I am claiming back

The charges
I could claim back the interest i paid
I am going to claim the contrat rate on top of the charges prior to going to court (If i wished I could claim the S69 interest INSTEAD of the conttractual rate.)

At least according to the thread ive linked to above i can.

Finally I do like your view on it all being my fault i never complained, im not sure it came across how you meant it, but on the basis that argument could be applied to the charges too it did make me smile.

HTH

Glenn

I am claiming back

The charges
I could claim back the interest i paid
I am going to claim the contrat rate on top of the charges prior to going to court (If i wished I could claim the S69 interest INSTEAD of the conttractual rate.)


Glenn - could I just check something with you please regarding claiming interest - Do you mean you are claiming your charges + contract rate interest rather than the actual interest you paid? If this is the case does this then mean you can't claim the 8% on top if this goes to court? Presumably if you claim the actual interest paid on charges you can then claim 8% on top if it ends up in court?

(Please tell me I'm finally getting the hang of this after what seems like years of reading!! )

Hi All

Claiming compound contractual interest is based upon implied principle of "mutuality" and "reciprocity" in the contract. i.e if they can charge you interest for unauthorised borrowing you can also charge them interest. The theory goes that as the penalties levied on your account are unlawful barclaycard have borrowed money from you. You can therefore charge them interest from the date the charged was applied to your account. If you go down this route you CANNOT also claim the 8% under county court section 69. The level of interest you apply can be the level of interest they would apply to you for unauthorised borrowing

Quote from my thread
"I also intend to claim for contratual interest at 17.7 % apr which equates to a daily rate of 0.04 % compounded for each charge since the date the charge was levied. I am claiming this on the implied principle of "mutuality" and "reciprocity" in the contract. The rate of 17.7 % is the rate levied when i first obtained the card, the rate im being charged now has recently increased to 24.9 %. However using a variable interest rate calculation is far to complex for my simple mind to cope with so am sticking with 17.7 %. In the event things end up in court i'll make sure to point out to the judge that i've been very lenient in the rate im claiming for - just may earn me sum browny points.

So following this reasoning the interest componds to £397.23 giving a total of £977.23.
I intend to include in my particulars of claim (when/if its reaches that stage) that I claim in the alternative the cc s.69 rate of 8 % (£139.65 giving a total of £719.65) "

There has been a successful claim following this route against Nationwide i think. There are a couple of threads which explain it in more detail has glen has pointed out above.

Hope this helps to clarify things a bit better, rather than muddy the waters even more

skb

Originally Posted by skbuncks

Quote from my thread


I intend to include in my particulars of claim (when/if its reaches that stage) that I claim in the alternative the cc s.69 rate of 8 % (£139.65 giving a total of £719.65) "

Hope this helps to clarify things a bit better, rather than muddy the waters even more

skb

Brilliant! ... my waters are less muddy after your clear explanation! So just a recap - ur going for compound contractual interest with a clause u will accept the 8% as an alternative if not?

I'm off to click on your scales ....

Yep, The basic plan is to go for contractual at a reasonable rate of interest. That way if it ends up in court (and you must at all times be fully prepared for it to do so) then you can demonstrate to the judge just how reasonable you have been. The judge will decided whether to award contractual interest or the 8 %, or maybe even somewhere in between the two. Of course the thing to remember is bcard do not currently want to go to court so are likely to settle before the hearing and a few more quid means nothing to them, but as the boys scouts say - Be prepared

Ok i have already sent my request for charges back, I am claiming the RBOS un auth rate of 29.84%.I cant see why we cant charge them their rates they would and do do it to us

Quote
So far we have been suggesting to everyone that they claimed the 8% because there is no express provision in the contract for a contractual rate of interest. However it seems to me to be quite arguable that there is an implied term in the bank contract based on the principle of "mutuality" or "reciprocity" -- in other words what is sauce for the goose is also sauce for the gander.

If this is correct then I think it is entirely reasonable to argue that where penalties have been unlawfully taken that this is the equivalent of borrowing by the bank and therefore the sum borrowed should attract a contractual rate of interest e.g. 16% - or if one wanted to say that the levying of penalties was unauthorised -- which of course it is -- then one could say that the contractual rate of interest was the unauthorised borrowing rate.


This is the link http://www.consumeractiongroup.co.uk...000-fight.html

Well you certainly are a lively one arnt you!!! Just quickly read through your thread ~£1300 in charges and £19000 in contractual interest going back 13 an a half years. Boy o Boy its one im gunna watch with great interest. Had came across the statue of limitations quote before

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

but though i'd get a standard claim under my belt before giving it a pop. Its gunna be a difficult journey but is well worth the effort. Quick question tho, how do you get statements from that far back??

Originally Posted by chezt

Glenn - could I just check something with you please regarding claiming interest - Do you mean you are claiming your charges + contract rate interest rather than the actual interest you paid? Correct If this is the case does this then mean you can't claim the 8% on top if this goes to court? Correct Presumably if you claim the actual interest paid on charges you can then claim 8% on top if it ends up in court? Correct

(Please tell me I'm finally getting the hang of this after what seems like years of reading!! )

You can claim

Charges you paid
interest you paid as a result of those charges

Plus

contractual interest
or
Sec 69 interest.

The primary advantage of adding contractual interest apart from the impact it has on the size of your claim is that you add it from the pre lim letters and hence if they want you to settle earlier you can still get interest on your claim.

HTH

Glenn

Originally Posted by livelylad

If this is correct then I think it is entirely reasonable to argue that where penalties have been unlawfully taken that this is the equivalent of borrowing by the bank and therefore the sum borrowed should attract a contractual rate of interest e.g. 16% - or if one wanted to say that the levying of penalties was unauthorised -- which of course it is -- then one could say that the contractual rate of interest was the unauthorised borrowing rate.

I would go further and argue that in fact there is no logical choice but to claim the unauthorised rate (for banks) or the cash advance rate (for cc companies).

Arguably the link between the cash advance rate and unlawful borrowing by the defendant is quite weak but I'm not sure there is anything better in CC terms and conditions.

If anyone has a better logic for CC companies id be interested to hear it.

JMHO

Glenn

Well i am quite stubborn so i kind of demanded my statements from the last 10 years, most banks do hold them they just dont tell you this.