My account has been taken overdrawn by bank charges levied by Lloyds TSB. I have refused to pay these charges after calling Lloyds and asking for them to be refunded.
I was about to send the preliminary approach letter when I recieved a letter from their collections department. This letter basically tells me what I already know and asks for imediate payment. It also details that there will be an "initial charge of £25 follwed by charges of £17.50" whilst my account is with the collections department. I again contacted them and asked for a refund only to be told that they will not refund and that they will continue trying to reclaim these charges possibly by using a debt collection agency.
Can I ask where I stand on this matter? Do I send them the preliminary approachletter asking for the current charges to be refunded or wait for my next statement to see if any other charges have been levied?
If you know what bank penalty charges they have levied, send them a Preliminary Approach for Repayment immediately. You can adjust your figures accordingly (anytime before issuing your county court claim) if you find that they have added some more charges. I don't know how you stand having told them verbally that you were not going to pay (it probably counts for nothing unless you can substantiate it), but you really need to lodge your dispute with them in writing so that all is clear and recorded - both to them and, should it come to it, a court. Don't be delayed by their actions, set your own timeframe for your claim and stick to it.
Once your dispute is lodged with them in writing, you can tell them that the balance is in dispute. This MAY discourage them from persisting with a default but I doubt it.
Bear in mind that not paying part or all of what they are asking for could result in a default. Based on what you have described, though unjust it will be a matter of considerable hassle to you to get it removed later (See thread titled 'Default Hell'). I know it sounds like a compromise to pay part or all of what they are demanding, but IF you can do this, it demonstrates that you have been reasonable even in the face of the nonsense of these unlawful charges, plus it will save you some trouble. IF you can stand the cost now, and IF you are willing to do so, the good will out and you will eventually get your money back.
I don't like this solution either, but if you can and will do it, it protects you from getting a default and gets you started on recovering what they have taken.
Incidentally, I understand Section 13.6 of the Banking Code says they will pass information on late payments to credit reference agencies...if the account is not in dispute. You may wish to check out the details. Clearly if your account is disputed, as signatories to the Banking Code they are duty bound not to pass late payment/default information to the credit reference agencies.
Many thanks for your speedy reply. I have ammended the preliminary approach letter to include these charges and I will forward it to them before I pay any of these charges. Hopefully the PA letter will show that I'm not going to let them have this money.
To attempt to stop these charges, you may wish to send the following letter [by our friend Spiceskull (Moderator)] to the bank:
I find myself in the position that your actions require my intervention for the [HOWEVER MANY] time in the space of a few days. I am seriously reconsidering my view that [BANK] has the capacity to act as my fiduciary in a responsible and lawful manner, as implied by the terms and conditions between both parties.
[WHENEVER] I received a statement from [BANK], stating their intent to unlawfully apply penalty charges to my account on [DATE]. These charges are to the sum of £XX.
As you are aware, I have asked you to demonstrate to me that these punitive charges are fair and just, that they are lawful, and that they are being lawfully applied. You have failed to demonstrate this to date, and therefore it is implied by your refusal or inability to supply such demonstration, that these penalties are, indeed, unlawful.
Therefore, I would draw your attention to the following point: you have stated that these charges will be applied on [DATE]. If these charges ARE applied, then you will be required to explain why you have, in my view, committed a pre-meditated breach of the law, and I will be reporting such breach to all of the relevant authorities.
However, as this has not yet happened, I require that you take action forthwith, and cancel this transaction prior to its execution. Furthermore, I require confirmation, in writing, that this transaction will, indeed, be cancelled.
I shall be checking my account on [DATE], and if I see that the penalty charges have been unlawfully applied to my account, I shall lodge a claim at the county court to recover these charges, plus my costs and interest calculated at 8% APR, without hesitation. Furthermore, I shall require that you confirm whether these unlawful charges have resulted in a default notice against my record with credit reference agencies, and if so, I will seek appropriate action to have this notice removed.
In view of my first paragraph, and considering your apparent incompetence to act as my fiduciary in a lawful manner, I will start to consider a course of action whereby I may seek redress for all the inconvenience you have caused me."
Thank you for your kind words Elsinore. I have read your informative and supportive posts with interest and to receive this compliment from you is very much appreciated.
Originally Posted by elsinore
...The only thing I would add is that you may have already been defaulted. Have you applied for a credit report from any/all of the CRAs?...
Excellent point, which reminds me that a credit report as well as showing defaults also shows other adverse points such as late payments and being over limit. Though I have no defaults, unlawful bank penalty charges have caused me to be late paying some credit card accounts (the timing is clear from statements). Several late credit card payments will make you an 'adverse' status credit risk, which significantly raises the cost of later credit.
This may not apply to you Brick Driver, but it will apply to many reading this. You may wish to consider these and any other consequences of bank penalty charges, and to cite them with your claim in order to seek recompense.
Note that going beyond standard recovery of bank/credit card charges is new ground, should be done very carefully, and needs to be capable of full substantiation. For example, see janeyb's thread.