Thread: cooneyc v RBOS

Hi Chris,

Not 100% sure of the address - it is suggested that you send all correspondence to your local branch. Internal processes will ensure that it gets to the right department.

The cheque is fine like that, and yes, it is best to ask for a full disclosure for the length of your account, six years, or whichever is the longer.

Good luck - keep us posted.

Hi everyone,

Luckily i've managed to dig out all of my past bank statements I didnt know i'd kept which is good news. I've looked through them and found about 10 charges. A few of these are £30 bounced D/D fines which i'm aware I can ask to be refunded. The others are £10 charges for going over my overdraft limit and show up on my account as service charges are these claimable as well?

Quick edit to add. I've worked out the total of the bank charges which comes to £230. Using the provided spreadsheet it also calculated an additional £32.40 in interest. Do I include this interest in the preliminary approach letter? I wasn't too sure what to do after reading the step by step instructions.

Thanks Again
Chris

No, the 8% can only be added when the claim goes to court.
Regarding the service charge, it depends exactly what its for. To my knowledge, the banks can legally make a charge for providing a 'service', but not for 'penalties' or 'fines' as in charging for going over your OD or for paying direct debits or cashing cheques when there are insufficient funds.

Hope this helps.

All the ones you mentioin are claimable. See Daves opinions on OD interest. The amount they charge for the overdraft makes them very rich bankers, without the penalty charges.

Hi Richard. The point is you are not paying for their service, they are penalising you for being a naughty customer.
The law states that the charge can only be proportionate to the costs incurred by the bank. So how is a £39 cost for the bank paying a dd (without asking you) when they know you have no funds, making you od by about £3 and then whacking a charge on justified when if you go into a shop to buy something by debit card at £15 when you only have £12 in your account the transaction is declined and there is NO charge? Surely the same scenario? And £39 for a computer generated letter? Some service!!!!!

Is it a credit card account you are claiming from?

see above

this is the oft press report. Tried posting link but wouldn't work.

Originally Posted by vix2000

Current credit card default charges unfair

OFT sets threshold for intervention

68/06 5 April 2006

Credit card default charges (see note 1) have generally been set at a significantly higher level than is legally fair, said the OFT today. The OFT estimates that across the industry this has led to unlawful penalty charges currently in excess of 300 million a year.

Download Calculating fair default charges in credit card contracts (203 kb).
Download guide for consumers (64 kb).

The OFT now expects all credit card issuers to recalculate their default charges in line with the principles set out in a statement published today and to take urgent action where needed to reduce the level of credit card default fees. The industry has until 31 May to respond to the statement. These principles also apply to default charges in other consumer contracts such as those for bank overdrafts, store cards and mortgages.

Where credit card default charges are set at more than 12, the OFT will presume that they are unfair, and is likely to challenge the charge unless there are limited, exceptional business factors in play. A default charge is not fair simply because it is below 12. Setting a threshold for intervention is a pragmatic pro-consumer action that is designed to give the industry the opportunity to change its practice without litigation. It is supported by detailed guidance to the industry as to how to reduce the likelihood of public enforcement (see note 2).

A default charge should only be used to recover certain limited administrative costs. These may include postage and stationery costs and staff costs and also a proportionate share of the costs of maintaining premises and IT systems necessary to deal with defaults (see note 3). Exceptional business factors which may affect the level of a fair charge may include policies to prevent casual defaults as operated by issuers such as Egg (see note 4).

Only a court can finally decide whether a charge is unfair or not. The OFT has today set out a statement of its view of the law. This has not generally been accepted by most of the eight credit card issuers.

John Fingleton, OFT Chief Executive, said:

'Our statement of principles provides practical guidance to banks which increases their incentives to compete vigorously while protecting consumers from being charged unfair amounts. Our threshold approach is a spur to changes in market practice. We expect credit card issuers to adjust their default fee levels quickly. We have not ruled out future legal action if the market does not respond positively.'

NOTES

1. These are charges in standard credit card contracts for a failure to pay a minimum payment on the due date, exceeding a credit limit or a failure to honour a payment made.

2. This reflects the OFT's duty to target its resources on serious consumer detriment as a priority over cases involving less harm to consumers. Card issuers are required to confirm their response to the OFT statement by 31 May 2006.

3. A fair default charge should not exceed a reasonable estimate of certain limited administrative costs which the credit card issuer reasonably expects to incur as a result of default.

4. The OFT is not proposing that default fees should be equivalent to the threshold, and a court will certainly not consider that a default fee is fair just because it is below the threshold. Where there are exceptional business factors, so that the presumption that a default charge over 12 is unfair is not applicable, this does not necessarily mean that the current level of the default charge is consistent with the OFT's interpretation of the requirements of unfair contract terms legislation. But for example, where a card issuer has a policy of requiring customers to pay minimum monthly repayments by direct debits, such as that operated by Egg, and offers credit cards only to customers that satisfy a relatively high scoring requirement it may be able to set a fair default fee at a level above the threshold.

5. The OFT has published a short guide for consumers and consumer advice agencies setting out the principles on which default charges should be calculated. This can be downloaded above.

Originally Posted by cooneyc

"The OFT is presently in contact with us and with seven other major credit card companies to discuss the level of charges on credit cards. It is important that I emphasise these discussions are limited to charges on credit cards only."

This still sounds like a standard response to me but I thought i'd check with everyone here first.

This is a totally automated, standard response. Like when the bank writes to you in response to a letter and says it will "deal with your complaint and get back to you within 8 weeks".

It means nothing more than the paper it is written on - which unless it is gold leaf, is nothing.

Just get on and post your lba and stop being so pleasant. You are starting to sound like "Tory Boy" - "nice but dim". (that's a joke by the way).

No, not at all, just that the OFT recommendations in the letter refer to credit card charges (see oft report below) and the oft are only suggesting that the banks follow them at present. Don't worry, and as Don Quixote says, get sending your letters. We'll all be here if you have any problems.

yes, the templates are fine to use. Good Luck.

They can close your account or call your overdraft in .That is why we recommend you open a parachute account.People are starting court action to stop the closure of their accounts so if you do a search of the site you can read more about it.