Smile Current Account Charges

[TomMcLaren]

I have a smile account that I have never really used, that was £480 overdrawn vs a limit of £500. An annual direct debit for £53 was charged to my account in Novemember, which was rejected by Smile. I was charged £20, leading to my account being over my limit for 5 days until I corrected it. However, I was subsequently charged a further £40 (£5 a day for being overdrawn and a £15 "service charge", presumably for the red ink). When these charges were applied this pushed me over my overdraft limit again. I was away at the time and only checked my account today. In the meantime I have been charged £90 in overdraft charges and accrued a further £160 yet to be applied.

Outside of how unreasonable the scale of the charges, (******s) I believe that they are not allowed to charge me for the overdraft when it was their charges that caused me to be overdrawn. Does anyone know if this is the case?

Hi Tom the charges they have applied are penalty charges and therefore in my opinion are illegal. if I was you I send them a letter requesting a refunded of the money within 14 day or your have no alternative but to start legal action.

If you want a sample letter to send them, please email me and are send you one I have written. Alternatively, there is one on the forum you can download.

[TomMcLaren]

Thanks Stephen, I was hoping someone would say that! Would you suggets legal action over arbitration though?

Hi, Tom as I just said in my email court should always be the last action. However sadly from my own experience, it is the only action that the banks understand.

[TomMcLaren]

Thanks for the advice, I'll post up any results that I get!

[TomMcLaren]

Just thought you might like to know that I received the following reponse today:

Hello Mr McLaren

As an internet bank we give our customers the responsibility of checking on their account as they have 24 hour access to their access via the internet. Full details are contained in the terms and conditions of your account. I'm sorry I'm unable to refund any of the charges for you as this was not a bank error.

Thanks

Sarah

To which I have replied:

Let me clarify the position. The £20 charge for an unpaid item applied 25th November led to my account being £9.80 above my overdraft limit. Despite my deposit of sufficient funds to correct this overdraft, the further £40 charges that you applied for the overdraft that your charge created caused me to incur a further £250 in overdraft fees.

I do not dispute the £20 initial charge. However, your application of further charges based on this initial £20 charge is contrary to the Unfair Terms in Consumer Contracts Regulations 1999. As I'm sure you are aware, the schedule to these regulations identifies a disproportionate penalty charge as being unfair and therefore invalid. I request that you refund all charges that have been unfairly applied to my account and ensure that no further charges are made. Furthermore, please state in your reply that it is your final response to my complaint in order that, if required, I may proceed with legal action.

That was an abridged version of the original letter I wanted to send, but that breached the 1000 character limit on their online secure messaging system (useless!!), as follows:

Dear Sir or Madam,

Thank you for your reply to my enquiry. As you have full access to my account details, I am sure you have investigated my request thoroughly. However, I feel that you may not have understood the sequence of events that occurred and led to charges being applied to my account. Specifically, it was your charge for the unpaid item in October (applied 25th of November) that led to my account being £9.80 above my overdraft limit. Despite the deposit of funds sufficient to bring my account back beneath my limit, the further charges that you applied for this "unautorised overdraft" (£15 service charge and £25 for 5 days"Daily Charge") again pushed my account over my overdraft limit. As I did not correct this until last weekend, I have subsequently been charged £90 in fees, with a further £160 accrued and to be applied on the 20th of this month. I assume that there will be a further charge applied in March.

I am fully aware that the fees I have been charged are specified in the terms and conditions of my account. As such, I do not dispute the £20 charge for the refused item. However, your application of this £20 fee to my account has led to the further accrual of £290 in overdraft fees to date. This £290 in charges to date is contrary to the Unfair Terms in Consumer Contracts Regulations 1999, in that the charges are unfair. As I am sure that you must be aware, the schedule to these regulations identifies a disproportionate penalty charge as being unfair and therefore invalid. Additionally, Penalty charges are not recoverable at Common Law. Precedents include Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd [1915] AC 79, along with Murray v. Leisure play [2005] EWCA Civ 963, whereby it was held that a contractual party can only recover damages for an actual loss or liquidated losses.

Given the unfair nature of these charges, and the lack of legal basis for their application, please refund all charges that have been unfairly applied to my account and ensure that no further charges are made. If you are not willing to comply with this request, please state in your reply that it is your final response to my complaint, in order that I may proceed with legal action.

Yours Faithfully,

Tom McLaren

Thanks for the inspriation Stephen!

no problem but I would ask for the orignal £20 back as well

[TomMcLaren]

Just thought I'd let you know I a response from Smile - they offered to cancel the charges that hadn't been applied as a customer relations exercise - do they not get it?!!! I've stuck to my guns, said "thanks but no thanks and by the way I've cleared all the debt that I have calculated I owe you so please close my account". Got a standard "this is to let you know our complaint policy" reply, so fingers crossed they might actually do something this time!!

BTW - I've decided that once I resolve this I'm going to claim back all prior charges. If it goes to court I'll make it a full charges case...

Tom

[BankFodder]

You shoudn't close your aco****. Let them do it if they want.

[TomMcLaren]

I agree, but I was going to do it anyway - haven't ever seriously used it and its turned out to cost me much more than the usage I got out of it...

[acrichards]

How did you get on with claiming back the charges? Just wondering because I have just got to the same stage and wanted to know if you were successful????