My request
I am writing to ask you to refund the charges which you have levied from the above account since inception. I now understand that the regime of fees which you have applied to my account in relation to card misuse, cheque/
direct debit
/standing order refusal, referral fees and so forth are unlawful at Common Law, Statute and recent consumer regulations. If you say that they are not, please demonstrate this by letting me have a full breakdown of the costs to which you have been put by as a result of my breaches of contract, in order to reassure me that your penalties really do reflect your costs.
I am of the view that your charges represent a penalty and are therefore unrecoverable at Common Law. In the Scottish case of
Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498; the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law:
Wilson v Love [1896];
Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79;
Ford Motor Co v Armstrong [1915];
Bridge v Campbell Discount Co. Ltd [1962];
Murray v Leisureplay [2004].
Your charges do not reflect any actual loss; instead they appear to represent a lucrative profit-making scheme. In particular, charges were applied after I entered into transactions without sufficient funds in my account. The actual loss is the cost of automatically sending me a computer generated letter which I would respectfully submit is valued at no more than 50 pence.
UK banks have recently given evidence to the House of Commons Treasury Committee on how bank charges are calculated: "
The costs are going to pay for all the people we have who pursue debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by taking these total costs and making some assumptions about the volume that is going to come through to arrive at the individual charges" (2nd report, 25 January 2005, paragraph 50).
Accordingly, the charges applied to my account are not a reasonable pre-estimate of your loss in relation to my account. No-one has had to look at my account or telephone me. No one has had to collect anything. Your charges would appear to represent a device to recover global losses (for example, loan defaulters, bad debt write off, including commercial lending in, and outwith, the UK).
On a separate note, your charges appear to represent an unfair term of contract which is contrary to the
Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account fall within the scope of Regulation 5 of the
Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under reference to paragraph 1(e) of schedule 2 of the said regulations:
‘
Indicative and non-exhaustive list of terms which may be regarded as unfair - 1. Terms which have the
object of effect of - (e) requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation’.
In an investigation by the BBC Money programme shown at 10pm on Tuesday 12 December, the BBC set up a commission and asked them to take account of all the expenses they thought banks might face in dealing with customers' defaults and come up with the highest costs they believed banks could reasonably justify.
The commission began work in October 2006 and met in London a month later to reach a final conclusion. The commission was established by the programme after all the major banks had declined its invitation to say roughly what it cost them to deal with customers' defaults. The Money Programme study into bank costs was undertaken by a three-person commission comprising two top business academics, Professor Philip Molyneux of the University of Wales, Bangor, and Professor John Struthers of the University of Paisley, together with an experienced banking practitioner, Ian Jarritt, formerly a senior executive with NatWest.
They reached the conclusion that the highest possible cost for returned direct debits or unauthorised overdrafts would be £2.50 and for bounced cheques this could be £4.50. These figures are of course far below your charges for these incidents.
0n 26 July 2005, the OFT stated that 'a charge is likely to be disproportionately high if it is more than a court would be likely to award if the lender sued the cardholder for breach of contract'. Because your charges include a large profit margin, in addition to actual loss, they are unrecoverable as an unfair term in contract. I believe that your charges require me to pay a disproportionately high sum in compensation for incurring transactions which were ultimately declined by an automated computer system. In addition, it is unfair to require me to subsidise your global debt recovery costs and debt write-off.
I also believe that these charges constitue unreasonable indemnities under section 4 of the Unfair Contract Terms Act 1977 (as amended) as this section states that a person dealing as consumer cannot by reference to any contract term be made to indemnify another person (whether a party to the contract or not) in respect of liability that may be incurred by the other for negligence or breach of contract, except in so far as the contract term satisfies the requirement of reasonableness.
Your responsibilities
I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law.
I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary. I consider that your repeated representations that your charges are fair and reasonable are deceptive and that they have deceived me into agreeing to pay them. Your concealment of the true nature of your charges has prevented me from asserting my Right until now.
What I require
I calculate that, as at today’s date, you have taken a total of
£3,954 in charges. In addition, I also claim Contractual Interest (compounded) under the principle of mutuality and reciprocity in our contract.
As you have taken unlawful charges from my account, this constitutes unauthorised borrowing – thus, the rate of Contractual Interest used is the bank’s unauthorised borrowing rate. The standard rate of unauthorised borrowing set by Natwest is
29.84%, therefore this rate is added to the above amounts and the breakdown is shown on the enclosed schedule. I calculate the Contractual Interest element (to the date of this letter) at
£2,223.09.
The grand total of the above is
£6,177.09 and I enclose 2 schedules showing the charges & contractual interest which I am claiming.
I request that you refund this amount in full, payable by cheque directly to me. I will accept a sum equal to the current
overdraft on my account to be paid into the account in order to clear the overdraft and the remaining amount paid by cheque directly to myself.
Targets to resolve this matter
I hope that you will enter into a sincere dialogue with me about this matter and write on the assumption that you will prefer to do this rather than merely respond with standard letters and leaflets.
You have 10 working days, from receipt of this letter (i.e.
by XXXXXXX), to reply unconditionally accepting my request in principle and letting me know a date by which I will receive payment.
If you do not respond, or do not respond positively, within this time period, I shall send you a
letter before action allowing a further 10 working days in which to reflect. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments. After that will be no further communication from myself and I shall issue a
county court claim at the expiry of the second deadline.
I would also like to draw your attention to a statement made to the BBC Money Porgramme mentioned above by Walter Merricks, the Chief Financial
Ombudsman. Mr merricks said that he will no longer entertain banks' offers of partial settlements of customers' claims. Mr Merricks said banks should now pay customers' claims in full or explain why their charges are legal. Failure to follow these guidelines will result in a complaint being made against you to the the Financial Ombudsman.
I look forward to hearing from you by return.
Yours faithfully,
The Cornflake.
Thecornflake vs Natwest finally **WON**
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Originally Posted by thecornflake
