Bong v HSBC *Contractual Interest & 13yr claim**WON!!!**

[Guest bong]

ANYONE WHO WANTS TO READ A SUMMARY OF THIS THREAD I HAVE POSTED ONE HERE http://www.consumeractiongroup.co.uk/forum/hsbc-bank/76820-calling-all-hsbc-claimants.html#post671596

 

Preliminary letter to HSBC (Leeds) sent 29th August 2006. Claiming :

 

penalty charges applied April 1999 to March 2000 (before 6 year period) £187.50

penalty charges applied between May 2001 and August 2006 £1,724

bank interest on penalties £324.50

TOTAL £2,048.50

 

(Have just realised that the spreadsheet didn't add in the £187.50 earlier charges so I'm going to add that into my next letter)

 

No reply.

 

Letter before action sent 13th September, claiming:

 

same penalty charges

additional bank interest on penalties since prelim letter £10.75

total £2,059.25

 

(again I didn't spot the discrepancy re the earlier charges but will add on now.)

 

Today I received the following charming letter:

 

Dear [bong]

 

Thank you for your letter dated 29th August requesting a refund of all your bank charges going back six years.

We note in your request some of the charges have been estimated [this was the spreadsheet total for charges earlier than the six years, but he hasn't spotted either that the spreadsheet had omitted them from the total], in order that we can consider your request for six years charges please provide a full itemised breakdown of these charges to include date, description of the charge and the amount applied. Please also include any proposed new charges that you will have received a pre notification advice for.

We are unable to assist you with analysis of your accounts.[well who asked you to anyway?] This is not something that the Bank is obliged to do under legislation, including the Data Protection Act. [keep your hair on!] We are, of course, willing to supply copy statements where these are available. Please advise us if you would like to receive copy statements.

Thank you again for taking the time to write.

Y/S

HSBC

 

Well I wasn't expecting such a friendly letter which has also served to prompt me to add in my earlier charges. thanks hsbc. will post my reply on this thread.

[TaylorMade]

That is a remarkably NICE letter.

 

This looks interesting - I know how much I was charged OVER 6 years ago, but I wasn't going to ask for it straight off. If they are asking you for your list of charges and you include the earlier stuff, then it will be interesting to see how they respond

 

Is 'Bong' a reference to 'for whom the bell tolls', or is it more interesting than that?

[Guest bong]

Yes I decided to go for all the charges simply because I had the bank statements already and thought I would argue the case about them concealing the true nature of their charges so that I wasn't in a position to claim before.

 

Actually my brother gave me the nickname Bong when I was a tiddler, and he still calls me it despite my being very old now, shame I can't claim to have thought up an original and amusing username for the site!

[Guest bong]

Right, I've typed my reply, which looks like this:

Dear Mr

 

Ref etc.

 

Thank you for your letter of 21 September 2006.

 

Please note that I am now increasing my claim to include £187.50 of charges debited to my account between 22 April 1999 and 24 March 2000. These are itemised as follows:

£

22/04/1999 Excess overdraft fee 25.00

24/05/1999 Total charges to 30/04/1999 25.00

25/06/1999 Total charges to 03/06/1999 27.50

23/07/1999 Total charges to 01/07/1999 27.50

25/10/1999 Total charges to 03/10/1999 27.50

24/12/1999 Total charges to 02/12/1999 27.50

24/03/2000 Total charges to 02/03/2000 27.50

 

Total £187.50

 

I will rely on the provisions of S.32(1)(b) Limitation Act 1980 to argue that the six year period of limitation commenced with my discovery, through the OFT’s report of April 2006, of the bank’s deliberate concealment of the facts relevant to my right of action.

 

My revised claim is therefore for £2,321.75, made up as follows:

£

Penalty charges 22/04/1999 to 24/3/2000 187.50

Penalty charges 25/05/2001 to 25/09/2006 1,799.00

Overdraft interest on penalty charges to 03/09/2006 335.25

 

£2,321.75

 

I enclose a third copy of the schedule of the amount I am claiming for your information.

 

I require unconditional repayment in full of this money, by cheque.

 

I will grant you an additional seven days from today to comply with my request. If this is not in my hands by Wednesday 4 October 2006, I will be commencing a claim in court for the full amount stated, plus any further charges and interest applied to my account after today’s date, county court interest and costs, without further notice. I hope that this will not be necessary and look forward to resolving this with you.

 

Y/S [bong]

 

 

Anyone got any comments or suggestions on this as I'm intending to get it in the post later this afternoon?

[Guest bong]

Right, well I've had no reply to my letter so I'm moving on to the next stage - MCOL!

 

However, I'm a bit disturbed by reading this in the "Can I claim beyond 6 years" thread in the important information you really should know section:

 

"If you would like to try and claim your charges as far back as you have ever paid them, you should try to do so.

However, do note that you will only be able to rely directly on the Unfair Terms in Consumer Contracts Regs.1999 if your bank contract was entered into post 1995"

 

I opened my bank account long ago, probably around 1989; does anyone know whether the above statement means that I should not be using this piece of legislation in my particulars of claim if I wish to claim back charges since 1992? Or even if I decide only to claim the last 6 years of charges?

 

One other question, if I'm going to argue the s.32 (1)(b) LA, at what stage do I bring it up? Particulars of claim, reply to defence?

 

Quick advice would be gratefully received as I don't want to delay in getting my claim in. Thanks

[Guest bong]

I am now considering whether to go down the compounded (contractual) interest route.

 

Does anyone know if I have to start all over with the prelim and LBA letters or if I should just send one further letter informing them that I am revising my claim with say another 14 days notice before I start the court claim?

[Guest bong]

~bump

[Guest bong]

Anyone???

[Guest bong]

Ok got the answer in someone elses thread. Can just send them one further letter with the amendments giving them 7 days notice before I raise a court claim.

 

Problems..problems..

 

1. my account was opened before 1995 so I can't use the UTCCR in my POC and I'm getting confused with what I've read about referring to the OFT guidelines, and now the CCA, in what will be a non-standard POC

2. I have to decide whether to go for just the six years now, and the rest in a later claim, or get it all over and done with in one go

3. I have to get my head around the contractual interest rates spreadsheet (HSBC is 15.9% EAR) AND decide whether to use the compound effect or not.

 

I'm rapidly beginning to feel that this is getting too hard...

[Kazzy77]

dont give up and dont go back to prelim and lba.

 

I would put it all in...the whole lot with whatever interest u prefer. if it ever went to court and you were representing yourself, the judge would give you a bit of room for mistakes and would just adjust the payment for you, im sure.

 

otherwise, hsbc will just want to settle out of court regardless and give u the money to go away. this is the most likely scenario. maybe this is terrible advice and mods may want to "lose" my account here but this is what i would do.

 

[Guest bong]

Thanks for the encouragement Kazzy. I just think HSBC will jump at the chance to find a valid reason for getting my claim thrown out so I want to get it right. Think I'll do this one at my local court so that I get a better opportunity to put in all the details. This one's too much money to lose!

[Guest bong]

I have decided to claim back all my charges since 1993 and to claim compound contractual interest. I am writing (once more) to HSBC to make them aware of this and give them 7 days to settle.

 

here is my letter:

 

I am writing further to my letter of 25th September 2006, which remains unanswered at this date.

 

In the time that has elapsed, I have reconsidered my position in relation to the extent of my claim for unlawful charges, and I would ask you to note that I am adjusting my claim both to cover the extended period of 26th July 1993 to the present date, and to include compound interest at HSBC plc’s standard overdraft rate of 15.9% EAR. I am applying this rate of interest to the monies that HSBC plc has unlawfully deducted from my account over the years, on the principles of implied mutuality and reciprocity, and unjust enrichment.

 

The revised total of the charges, and interest debited as a result of the charges, stands at £2,796.44 at today’s date, on which I have calculated interest due (to date) of £2,654.37, bringing my total claim to £5,450.81. I have enclosed an updated schedule of the figures for your information.

 

I wish to draw your attention to the fact that I have previously asked you to demonstrate that the bank’s charges are lawful, by providing evidence of the costs to which the bank has been put as a result of my account breaches. I have also previously requested details of any manual intervention on my account. Neither has been forthcoming.

 

Consequently I am of the view that HSBC plc is unable to demonstrate that its charges are lawful or that there has been manual intervention in relation to the breaches that have occurred and the charges that have resulted.

 

I believe I have received, at most, five automated letters from HSBC concerning breaches of the account terms throughout twenty-odd years of banking history with HSBC. In my estimation these would cost no more than £1 per letter to print and dispatch. I have used the call centre facility twice, once to stop a cheque of £9 that had been incorrectly debited to my account for £900, and the other time to report that I had been debited twice for an automated cash machine withdrawal. I receive paper statements and cheque books which undisputedly involve a cost.

 

However, all of the above services are provided to all HSBC customers and those who do not pay penalty charges are in effect receiving these services free of charge; consequently I do not accept that my charges have paid for these services.

 

I do not expect to borrow from the bank free of charge - I fully expect to pay interest. However if, as an example, you incurred costs (over and above the overdraft interest) of £125 when I exceeded my overdraft limit in August, I would like to know what those costs were, for I did not even receive a letter or a telephone call about it.

 

It is my considered view that HSBC plc, as a multinational corporation of very high standing and repute in the business and banking world, with the benefits of accounting expertise, in-house lawyers and/or access to top legal experts, owes a duty of care to its customers, in relation to ensuring that it is trading lawfully; and has therefore always had the resources to know that its charges were and are unreasonable, punitive in nature and therefore unlawful.

 

The level of the charges can be seen to be unrelated to the costs of the services provided; to exceed actual individual instances of loss to the bank, and to unjustly enrich the bank.

 

Based on the above, I believe that if HSBC plc is unwilling to settle my claim in full out of court, I will have no alternative but to attempt to persuade a court that by electing not to reveal its costs and the profit element of the charges, HSBC plc has always concealed the fact that its charges are unjustifiable and unlawful.

 

Further, I will aver that I mistook the charges to be lawful when I paid them, because prior to becoming aware of the OFT’s report this year I had trusted HSBC plc to operate lawfully.

 

Please note that I require unconditional repayment in full of £5,450.81, by cheque, within the next seven days in order to conclude this matter, failing which I will be proceeding with a court claim without further notice to you. In view of the costs involved for both parties I hope that HSBC plc will decide to settle my claim before that stage becomes necessary.

[TaylorMade]

Good letter - I like it I reserve the right to help myself to any part of it for a nominal fee of £0.00 (plus interest at 0%)

[Guest bong]

ooo now let me think....

[Guest bong]

letter went today. roll on next Monday....

[Guest bong]

well thank goodness I sent that letter on Monday. Today I had a letter from them dated 23 October, which crossed in the post with mine. It says

 

Thank you for your letter dated 25 September requesting a refund of your bank charges of £2,321.75 going back to 30 April 1999.

 

We note that your claim goes back more than 6 years. HSBC will not consider any claim over 6 years old given that it is time barred under the Limitation Act 1980.

 

HSBC's interest rates are well publicised in respect to both authorised and unauthorised overdrafts. You have asked us to refund overdraft interest on your account. It is, of course, a condition of your borrowing from us that you will pay interest at the agreed rates on that borrowing. As such we will not be refunding the interest that has been applied to your debt. (well we shall see shalln't we..)

 

In circumstances where you have authorised a payment that would, if met by us, lead to your account going overdrawn or over an agreed overdraft limit, we have to consider whether to make this payment. A fee is payable for this service provided by the bank, details of which are clearly set out in our published price list. The circumstances in which the fee will apply are clearly set out in our Personal Banking terms and conditions which you were provided with a copy of when you opened your account. If your claim for a refund proceeded to Court, we therefore believe we would successfully resist any legal challenge in relation to these fees.

 

HSBC is, however, mindful of the management time and irrecoverable legal costs that it may incur in relation to such a claim. For those commercial reasons alone, and without any admission of liability whatsoever, HSBC is prepared to make a payment to you in the sum of £1,585.00 representing the charges applied in full and final settlement of this matter.

 

If you accept this proposal please sign and return the enclosed copy of this letter to us within 10 working days and we will arrange for a refund to be made to you. Please allow 7 working days for your account to be credited from receipt by ourselves. If we do not receive your signed acceptance within this timescale, we will take it that you have declined our offer.

 

I trust that this matter has now been addressed to your satisfaction. If you are not satisfied with the bank's response you have the right to refer your complaint to the Financial Ombudsman Service. ...

 

Thank you again for taking the time to write

HSBC

 

 

At the moment they are offering £214 less than the actual penalty charges incurred within the six year period. And nothing in respect of overdraft interest on penalty charges or charges beyond the 6 years. Of course they wouldn't have known about the contractual interest when they wrote this because they wouldn't have had my latest letter. Think I can feel another letter coming on...

[Guest bong]

have been trying to put together a letter, wonder if anyone has any thoughts on this my first draft -

 

Thank you for your letter dated 23rd October 2006, which crossed in the post with mine of the same date.

To avoid any confusion since the making of your offer to refund charges of £1,585, I wish to confirm that I do not accept this offer in full and final settlement of my claim of £5,450.81. Furthermore, unless HSBC would be willing to agree to settle in full prior to 30th October, I shall be entering a claim at Court. As stated previously, I would prefer to have this matter resolved without recourse to the Courts but that does not mean that I am willing to compromise my claim.

You have stated in your letter that HSBC will not consider any claim over 6 years old given that it is time barred under the Limitations Act 1980. This assumes of course that a Court would dismiss my claim under S.32 (1) (b) LA 1980 that HSBC has knowingly concealed the unlawful nature of its charges from its customers. It would make for very interesting news I am sure to see HSBC pleading ignorance of the law and of the profit it was making from this revenue source! I am therefore giving you this opportunity to reconsider your decision not to refund charges extending back to 1993.

You have also stated that you will not be refunding any overdraft interest. May I point out again that I do not expect to borrow from the bank free of charge. However I do not expect to pay interest on unlawful charges, and I would ask once again that you reconsider your position before this results in a Court claim.

On the matter of the contractual rate of interest, in anticipation of your rejection on this issue, I would ask that you consider whether HSBC deems just its practices of self-enrichment by the deduction of unlawful penalty charges and overdraft interest from my account, and that it should not pay interest at the same rate that is applied to my own borrowing.

 

will check back later to see if anyone has any comments on this - thanks

[Guest bong]

anyone??

[zootscoot]

Looks good Bong.

 

One point regarding s.32(1)(b) this relates to concealment of facts leading to the cause of action rather than concealment that the charges were unlawful. So you would need to establish that they concealed the the true cost of the services they were providing in relation to your breaches. You would also need to establish that there was a duty to reveal this. It would probably be easier to raise s.32(1)© in that you paid the charges under a mistake of law. See Kleinwort Benson v LCC:

 

House of Lords - Kleinwort Benson LTD. v. Lincoln City Council

Kleinwort Benson LTD. v. Mayor etc. of the London Borough of Southwark and Others

Kleinwort Benson LTD. v. Birmingham City Council

Kleinwort Benson LTD. v. Mayor etc. of the London Borough of Kensington and Chelsea and Others

(On Appeal from the Queens Bench Division of the High Courts of Justice)

 

You can leave the letter as it is and address these points when issuing your claim.

 

Hope this helps

 

Zoot

[Guest bong]

this relates to concealment of facts leading to the cause of action rather than concealment that the charges were unlawful.

 

thanks zoot. one question if I may - can you explain why the concealment of the charges being unlawful isn't a fact leading to the cause of action?

[zootscoot]

Concealment relating to the law is not allowed under s.32(1)(b):

 

32.--

• (1) .... where in the case of any action for which a period of limitation is prescribed by this Act, either-
  • (a) the action is based upon the fraud of the defendant; or
    
  • (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
    
  • © the action is for relief from the consequences of a mistake;

This is based on the assumption that all citizens are presumed to know the law and it is there responsiblity to find it out.

 

It is the cost to the bank in relation to the charge that they impose which makes the charges unlawful. The cost to the bank is the facts which they have concealed for you to be able to determine whether the charge is lawful or not.

 

Under 32(1)© it used to be the position that mistakes of law were not allowed. However, this ban was lifted in the Kleinwort Benson case.

[Guest bong]

Ah, now I understand. Thanks very much, you're a real star

[Guest bong]

This assumes of course that a Court would dismiss my claim under S.32 (1) (b) LA 1980 that HSBC has knowingly concealed the unlawful nature of its charges from its customers. It would make for very interesting news I am sure to see HSBC pleading ignorance of the law and of the profit it was making from this revenue source! I am therefore giving you this opportunity to reconsider your decision not to refund charges extending back to 1993.

 

Mmm, maybe I should change this para to

 

This assumes that a court would dismiss a claim under S.32 (1) © LA 1980 that I paid the charges under a mistake of law. I am therefore giving you this opportunity to reconsider.....

 

Have to think about it..

[zootscoot]

I think the para is fine as it is. The unlawful nature o f charges would include concealing the true costs. It also sounds stronger than I paid the charges under mistake!

 

Just make sure you include s.32(1)© in your particulars.

[Guest bong]

Thanks again zoot. Letter (below) being sent today with very slight tweaking to give them more time to reconsider their offer before I go to court.

 

Thank you for your letter dated 23rd October 2006, which crossed in the post with mine of the same date.

I wish to confirm that I do not accept your offer to refund charges of £1,585 in full and final settlement of my claim of £5,450.81. As stated previously however, I would prefer that this matter be resolved without recourse to the courts and for this reason I am extending my deadline for you to reply to my extended claim with a reconsidered offer, to Monday 6th November 2006. Please note that I am not willing to compromise my claim and unless HSBC would be willing to agree to settle my claim in full by that date, I shall be entering a claim at court.

You have stated in your letter that HSBC will not consider any claim over 6 years old given that it is time barred under the Limitations Act 1980. This assumes of course that a court would dismiss my claim under S.32 (1) (b) LA 1980 that HSBC has knowingly concealed the unlawful nature of its charges from its customers. It would make for very interesting news I am sure to see HSBC pleading ignorance of the law and of the profit it was making from this revenue source! I am therefore giving you an opportunity to reconsider your decision not to refund charges extending back to 1993.

You have also stated that you will not be refunding any overdraft interest. May I point out again that I expect to pay to borrow money from the bank, however, I do not expect to pay for borrowing that consists entirely of unlawful charges. I would ask once again that you reconsider your position before this results in a court claim.

On the matter of the contractual interest element of my claim, in anticipation of your rejection on this issue, I would ask you to consider whether HSBC deems just its practices of self-enrichment, through the application of unlawful penalty charges and interest on the charges, and that in the interests of an equitable settlement, it should not pay interest at the rate that is applied to my own borrowing.

I look forward to your reply, in order that this may be resolved in an amicable spirit and before the addition of legal costs.

Fingers crossed for a full offer but probably false hopes