Written by John Kruse, one of the leading experts on Bailiff Law, this consumer friendly guide is essential reading for anyone who comes into contact with a bailiff.
The book is easy to understand and clearly explains the rights
a bailiff has, and also what they cannot do when collecting debts and repossessing goods etc.
I've been preparing for court - looks like I'm going, and I've been thinking about the old "it's a charge for a service we provide, not a penalty" defence.
"We haven't been able to pay the item(s) shown below because your overdraft limit doesn't cover the amount.
To cover our costs, we make a charge of £39 (maximum 3 charges per day) for any item we can't pay."
or
"We have paid the item(s) shown below even though this means your account is now overdrawn by more than your overdraft limit.
To cover our costs, we make a charge of £30 (maximum 3 charges per day) for any item we pay when your account is overdrawn in excess of any agreed limit."
Surely this will neatly negate any attempt to claim that they are a proftable service?
We're trying to prove that they are making a profit, not the other way round.
Opinions given herein are made informally by myself as a lay-person in good faith based on personal experience. For legal advice you must always consult a registered and insured lawyer.
"Some people say The Stig chews on spark plugs and drifts while walking. Some say he is terrified of ducks, and that there is an airport in Russia named after him. All we know is that he is really barracad from The Consumer Action Group" - Jeremy Clarkson (allegedly)
Aren't we trying to prove it's a penalty charge, and that £39 is not the amount of their costs.
This means they can't say it's a service they provide, rather it's a charge they make. Now it ain't easy to prove that the charge isn't equal to their costs, but we've got all the right stuff.
BoS:- D P A sent 09/06 Prelim. request 29/06 £1755 plus interest
1st claim Filed 5/10/06 SETTLED 19/10 £747.80 plus £534.31 interest
Surely it's up to them in their defence to prove that the charges are reasonable? That's the whole reason they don't ever want to go to Court in the first place! They cannot prove that the charges are a true reflection of their costs, because they quite simply aren't a reflection of their costs, they are infact a reflection of their greed for HUGE profits!!!
If the charge is for a service then the cost for the service has to be a reasonable cost, £39 aint reasonable, and i don't think a judge will think so either.
Ah, no, that's not quite true. If it is a service, and you have chosen to request/accept that service, reasonable doesn't come into it, there is an agreed price, and you can't retrospectively say: "It's too much, I don't want to pay it". And a judge would not rule on that.
That is precisely why some banks try to claim the "service" defence. That is why an ATM charge is not reclaimable, even though £1.50 is not, IMO, a true reflection of their costs. You have a choice whether to use that service or not.
GIveitback is of course completely right that they can't say that the charge is to "cover their costs" and then say it's a chargeable service.
Is that what they actually claimed in their defence? Do you have a thread about it somewhere?
Apologies to people who I was in the process of helping, I may be gone some time.
Exactly and I don't think that it's our responsibility to provide information as to how much it actually does cost them.....that's impossible surely?.....it's a matter for them to collate this and disprove that the charges are unfair and unreasonable.
I accept that if you've agreed a price for a service, but if you havn't then the cost of service should be reasonable, for instance i've agreed to pay £13 a month for my aditions account, no problem, i can take it or leave it, but i have no say in the other charges that are applied.
But -if another bank didn't apply same charges, and this is a different argument-, you could change banks.
I'm sorry, Paul, but you are mistaken. The courts are extremely reluctant ot intervene when it comes to contracts, and the penalty charges law is the exception, and even then is extremely quantified.
In the case of First Commercial Bank and Others v. the Owners of "Mandarin Container", "Kingdom Container" and "Liberty Container" (2004), the court examined the principles underlying the exercise of the court’s penalty jurisdiction and noted the modern tendency to respect the contract agreed between the parties, unless the liquidated damages provision could be characterised as unconscionable, oppressive or extravagant.
Apologies to people who I was in the process of helping, I may be gone some time.
Bookworm i am confusd now, so the bank could put their charges up to £50 then argue in court that the charge is for a service they win we lose, surely the cost of service has got to be reasonable.
The supply of goods and services act 1982 states this.
Their is an implied term that the party contracting with the supplier will pay a reasonable charge.
The bank is an high street buisness normal mark ups are 100%, to have mark ups exescively more than this would be unreasonable.
This is what i am relying on if i go to court, or am i mistaken, i don't want to look foolish in court.
No, what you are relying on in court is that it is in fact a penalty, as the amount charged is not a true reflection of the cost your breaching your contract with them has caused them.
In the case of Alfred McAlpine Capital Projects Limited v Tilebox Limited , the important point was that the Liquidated Damages rate need not be right to be reasonable, but would be unreasonable if disproportionate to the likely level of loss. So a charge of say £5, whilst still not a genuine pre-estimate, would probably be deemed acceptable by a court.
A charge for a service, on the other hand, does not have limits.
I'll gve you a "for instance": Following the forced lowering of their penalty charges to £12, B/card has hiked their interest rate by an average 5%, which in the long run is likely to net them even higher profits. Can I do anythign about that? No, apart from walking away from B/card. In reality, I can't, as I would have to repay what I owe them, etc... The point is I can't challenge the inflated APR, because it is a service, and in theory, I can finish the contract and take my custom elsewhere. Whereas I can, and will, keep on challenging the £12, as it is NOT a genuine pre-estimate of their costs. Do I cost them £12 when I go over the limit? When I am 1 day late paying? No. Can they charge any interest they want, because in theory, I do not have to accept and can go elsewhere? Yes.
But yes, in practical terms, IF the bank were to argue that the chage is for a service, AND be willing to argue it in court, AND a judge were to be blinded by the "cloaking the penalty" attempt, then any price that the bank had seen fit to apply at the time would be deemed part of a binding contract the judge would be reluctant to interfere with.
Apologies to people who I was in the process of helping, I may be gone some time.
I understand fully that the charges are a penalty, what i'm saying is if the banks defence was for a service then we should be able to rely on the goods and services act, if we can't, it's a waste of time printing it off for court,
Yes, if the banks were to say it's a service, you could rely on SOGA 1982 s.15(although I personally wouldn't want to rely on that alone!)
But in court, you would be arguing that it isn't a service in the first instance, not attempt to quantify what is or isn't a reasonable amount.
The claim form states that "In the event that they are proven not to be a penalty", then they are unreasonable, etc.... Which would be a much harder thing to quantify and prove to a judge's satisfaction. As previously stated, a judge will be extremely reluctant to interfere with a contract unless it is blatantly unreasonable (and I'm talking Provident rates unreasonable here!)
Apologies to people who I was in the process of helping, I may be gone some time.
I've been thinking about this issue a bit. Firstly, isn't there something about "core terms" of the contract in the Unfair Terms in Consumer Contracts legislation? The core terms are what a typical user would be expected to agree to - small monthly charge, fee for each cheque or other item honoured, interest rates etc. You could argue that other terms, such as those providing for a monthly "maintenance charge" when the account is over its limit, or for honouring items which take the account over the limit are not core terms. The average users agrees to the contract even though it includes such terms because they EXPECT to be operating their account in accordance with the core terms. The other terms then start to look suspiciously like penalties, and I think you could easily argue this in court.
BUT, secondly - and I believe more importantly - most claims at court include a MIXTURE of unpaid item charges, which are clearly penalties, and other items which the bank might claim are service charges. If there is even just ONE unpaid item included in your claim, the bank will not want to argue the case in court, where they might have to provide evidence of their charging scheme under standard disclosure. IMHO they will pay the ENTIRE claim - even if the bulk of it is what they are calling "service charges" for referrals or whatever, rather than risk seeing it go to a court where a precedent may be set.
RBS Current Accounts £3868 claimed, settled in full before court
BoS Visa Card £350.58 claimed, settled in full before court action
Capital One Visa £1356.79 claimed, court claim issued, agreed to settle for £1127.46
HFC Bank Marbles £408.85 claimed, promised to settle before court, still waiting for cheque
Barclaycard £552.66 claimed, offered £152, AQ filed
Lloyds TSB MoreThan card £312.70 claimed, AQ filed
MBNA Visa £2744.22 claimed, £1250.51 paid, AQ filed
No worries bookworm, this isn't a hijack, it's stuff I need to know. Might be in court on thursday.
The letters that BOS send me say what I included in the first post. "To cover our costs", not "this is a service we charge you xx quid for", but "to cover our costs we charge you xx quid".
So in court, i can say:
This isn't a service as their letter clearly states that they claim to make this charge 'to cover their costs'.
Their costs aren't this much money, ergo, it's a penalty, and the xxxxxxxxx b@ss@s, sorry, honourable organisation, must give it back. Now. Gimme.
GiB
BoS:- D P A sent 09/06 Prelim. request 29/06 £1755 plus interest
1st claim Filed 5/10/06 SETTLED 19/10 £747.80 plus £534.31 interest
So, called the bank, no money there. Checked the post, nothing there but a letter about a default they're trying to hit me with in retaliation.
hit the courts, they said, no defence recieved, so filled in a Form 11. Now they've got 15 days after the court date to file an appeal, or I send them a copy of the decree and can enforce the amount.
I don't remember this being part of the plan, but hey
BoS:- D P A sent 09/06 Prelim. request 29/06 £1755 plus interest
1st claim Filed 5/10/06 SETTLED 19/10 £747.80 plus £534.31 interest
BOS "It's a service" defence
Letters:
Reply With Quote
