Claiming contractual interest- help me finish this!

[Carpetbagger]

Hi guys,

 

I've been looking on here for ages, but I never posted, because firstly I forgot my password, and then I posted in the wrong section and was mortified.

I realise now I could have probably sorted out the tangle I've got myself in a lot sooner if I'd just told my whole story.

I live a quite chaotic life, due partly to being hit for £50 a month bank charges despite being on the dole (this is one weeks dole, honest hard working people), partly through depression and partly through being one of those 'artistic people', so for this reason its taken me about 7 months to get to considering litigation. And I need advice on how to get a successful desicision, so the last 7 months havent been a waste.

• I'd done all my prelims, got statements and calculated the amount of fees (£430) and calculated the overdraft interest and 8% interest last October. I sent off my preliminary letter then. I was bit put off by the letter back saying that NatWest would not pay anything because the charge were fair and reasonable, blah blah. But I worked out from threads on here that this is a usual smokescreen tactic.

• So then, using information on here, I put together my final demand letter, which I sent off in February.

• After this on the 19th March I recieved a letter of settlement (not final settlement I think) from Natwest, saying they would not pay interest. So they would therefore only give me £430.

• However, in this time, I saw all the talk about claiming contractual interest, and I thought this sounded like a pretty good idea. During this time I was also stung another 3 times by Natwest fees, bringing my total up by about £100. I worked out that using my accounts unarranged borrowing rate, of 29.7% APR, Natwest owed me £1,357.10 (a bit less than the total of my crippling overdraft, but a good amount)so I sent off a revised secondary claim letter asking for the fees plus interest. Andy Sinden of Natwest replied on 2 May, saying
  
• "it is inappropriate for me to repeat the banks legal position regarding its charges. These were clarified in my letter to you of 19th March and I am aware that you do not agree with the banks stance on this offer. While I appreciate that you feel strongly aout this issue, you have been offered a payment of £430; However the bank will not refund interest."

So now, I would really like advice on how I proceed. If you wonder how it has taken me this long to get to this stage, I should also mention I had a family bereavement in April which has really rattled me. I could do without the aggravation, but I really want to see this through to the end, and I dont want the bastards to get away with this. And given my present financial state, to be fair, I can't afford not to.

Should I send a final request for payment before comencing court proceedings, as someone suggested? Mr Sinden's tone in this letter seems so cut and dried that I suspect this is not necessary.

I was also reading a thread about someone claiming and settling for the full contractual interest, a few months ago. But the relevant information was pulled off here in some dispute over intellectual property. Could someone direct me to where this information is, or just tell me, what case should I be putting in?

Thanks for such a wonderful forum, and I promise to contribute some money when I've won my case, as should everyone who benefits from this service.

[steven4064]

Hi CB

 

Firstly a big welcome to the NatWest forum. It saounds like you have done all the right things and the next stage is to claim through the court. You don't need to write to them again - you have been more than generous with the time you have given them already.

 

However, there is something you should know. THe basis of our claims is that these charges are unlawful penalties under the common law and various consumer legislation. Our case is watertight. Your case is gold plated.

 

It depends which benefit you are on but the effect is the same. THere are two Acts: the Social Security Adminstration Act 1992 (which covers income-related benefits, job seakers, invalidity benefit, etc) and the Tax Credits Act 2002 (which covers working tax credit, child tax credit). BOTH of these Acts have a clause which means that banks MUST NOT apply charges to accounts that have benefits paid into them. (in the SSAA 1992 it is section 187, in the TCA 2002 it is section 45).

 

In addition to carrying on your claim you should write to the bank pointing this out. I will post a letter from another thread in thenext post. Have a look at http://www.consumeractiongroup.co.uk/forum/general-debt/36790-bank-taking-your-benefits.html

 

Steven

 

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[steven4064]

Your address

 

date

 

Customer Relations

National Westminster Bank plc

225 Shenley Road

Borehamwood

WD6 1TE

[social Security Administration Act 1992][ Tax Credits Act 2002] - Request for repayment

Dear Sir/Madam,

 

ACCOUNT NUMBER: xxxxxxx SORT CODE xxxxx

 

I am give brief description of circumstances and in receipt of state which benefits which are paid in to the above account by the [Department of Work and Pensions][Revenue and Customs]. No other income is paid into my account.

[section 187 of the Social Security Administration Act 1992][Section 45 of the Tax Credits Act 2002] (‘the Act(s)’) states that these benefits are inalienable, that is, every assignment of or charge on these benefits and every agreement to assign or charge such benefit shall be void.

 

During the period start date to end date, charges totalling £xxxx have been applied to my account in relation to direct debit refusals, exceeding overdraft limits and so forth in direct contravention of the Act(s). In addition, interest totalling £xxx has been applied to my account in relation to these charges. The charges are detailed in the attached schedule.

 

I am writing to ask you to refund to me the charges and interest listed in the schedule which you have levied from my account in contravention of the Act(s).

 

I will give you 16 days from the date of this letter to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or you do not respond positively, within this time period, I shall [send you a letter before action giving you a further 14 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, there will be no further communication from me and I shall issue a claim through the Small Claims Court immediately on the expiry of the second deadline.] [not only continue with my claim through the County Court but will inform the [Department of Work and Pensions][Revenue and Customs] and the FSA, who may take legal action against you.}

Yours faithfully,

 

Fill you details in the blue bits and select the relevant red bits. In your case THe last part should be the second - ie from "..not only continue" I have done it so that someone who is further back in the process can use this as a preliminary letter.

 

If I have made it too confusing, please ask.

 

Send the letter to your branch and copy it to Customer Relations and to Cobbetts.

 

Steven

 

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[Carpetbagger]

Oh wow, all these months and I was not aware of this at all!! Thanks so much Steven4064. 3 hours in and this is as helpful as I hoped it would be! It's taken a bit of the pressure off anyway! Brill! Thank you!

[Carpetbagger]

Having said that, I would still appreciate someone to post an appropriate statute for claiming contractual interest here, for when I do take them to court.

[steven4064]

Sorry, I got so tied up in benefitsi forgot the original question. The form of words you might use is

I base my claim for Contractual Interest being awarded due to the imbalance in favour of the defendant in applying compounded contractual interest to the penalty charges and the borrowing of my money and no fairness in this being reciprocated by Claimant in their use of my money or any legal redress by the Claimant. This therefore being deemed an unfair term in the contract.

I found this somewhere on the site but I can't remember where.

 

It isn't a statute as such but based on the various legislation regarding unfair terms in contracts (Unfair Terms inConsumer Contracts Regulations 1999 and UNfair Contract Terms Act 1977)

 

Anyway, off to bed now.

 

Steven

 

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[Carpetbagger]

HI again,

 

I just had some other thoughts about this Social Security act.

I havent been unemployed for the whole of the time that I'm making a claim against Natwest for. I've been in and out of work, but there's not one year where havent claimed Jobseekers. There was period in June 2004, when I was trying to do my masters (I had to give it up due to lack of funds sadly:rolleyes:) when I tried to find work and decided I wasnt going to go through the benefits system again, because it was too demeaning. What a mistake that was! So I wasnt in regular work or claiming benefit for about 3 months .

And also, if taking penalty charges out of benefit is illegal, what about the actual agreed rate of interest on the account? (16.9% APR) I've been charged about £25 every month this year, just in interest and sometimes a £28 penalty charge on top of that when there isnt enough in the account to pay the interest. HAve I got a case for saying in this circumstance, the agreed (I never agreed this amount, went from a student account to a graduate account, to a ??? account, they leave you to find out the interest rates for yourself- I have never had a single letter form Natwest informing me of any change to my account ) interest should be paid back as well for the periods I was unemployed?

[steven4064]

Certainly the interest that is attributable to charges, whatever you circumstances at the time. If you are going for contractual interest then just plug the charges into a spreadsheet with the 29.5% and see what comes out.

 

Steven

 

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[Carpetbagger]

Gonna send this letter off tomorrow, does this seem alright? Any changes I should make?

 

Customer Relations

National Westminster Bank plc

225 Shenley Road

Borehamwood

WD6 1TE

Social Security Administration Act 1992- Final Request for repayment

Dear Sir/Madam,

 

ACCOUNT NUMBER: xxxxxxxxx

I have been unemployed and in receipt of Jobseekers Allowance and housing benefit from 12 March 2006-June 2007 and for various periods every year since 2002. These state benefit payments are paid into the above account by the Department of Work and Pensions. No other income is paid into my account.

Section 187 of the Social Security Administration Act 1992 (‘the Act’) states that these benefits are inalienable, that is, every assignment of or charge on these benefits and every agreement to assign or charge such benefit shall be void.

 

During the period 31 December 2001 to 12 June 2007, charges totalling £430 have been applied to my account in relation to direct debit refusals, exceeding overdraft limits and so forth in direct contravention of the Act. In addition, interest totalling £974.19 has been applied to my account in relation to these charges. I enclose a recent schedule of charges

I am writing to ask you one final time to refund to me the sum of £1,404.19 listed in the schedule which you have levied from my account in contravention of the Act.

 

I will give you a final 10 days from the date of this letter to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or you do not respond positively, within this time period, I shall not only continue with my claim through the County Court but will inform the Department of Work and Pensions and the FSA, who may take legal action against you.

Yours faithfully,

[hedgey06]

Looks fab to me mate - but take your account details out quick!!!!!!!!!!!!!!

 

Apart from that - looks great!! xx

[Carpetbagger]

Eep! thanks for pointing that out!

[hedgey06]

S'alright............... I've ordered meself loads of clobber now!!!!!! xx;)

[Carpetbagger]

Do you know who I should send this letter to? Is it the Borehamwood address? No matter where I send the letter (sent it to Edinburgh last time) I keep having all my stuff dealt with by this Andy Sinden chap from 280 Bishopsgate, London and I don't find him very helpful to be honest. With that attitude he shouldnt really be in customer relations.

[steven4064]

I would send it to Borehamwood but send a copy to your branch too.

 

Steven

 

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[Carpetbagger]

so, sent that letter off, and a week later get a standard fob off from NatWest back:

 

" Thank you for your recent letter regarding the fees applied to your account.

 

We are currently considering your claim. Given the work involved in assessing your claim we anticipate that we will be in a position to respond within 6-7 weeks, but we will endeavour to do so sooner if we are able to."

 

I've given them the time frame for them to make a response in, so obvioulsy now I go to litgation. But I'm still realy worried about this contractual interest aspect of it. What is my argument? What are the legal precedents behind this line of claim? I understand it's something about reciprocity, but has anyone written a template for a contractual interest claim? I'm very much in the dark and very much dreading the legal action.

:-| :?

[Carpetbagger]

Plus in the meatime, my rent cheque has bounced twice, even though the funds were in my account!! And Natwest have whacked me with 2x £38 unpaid items charges, plus another 2 £28 charges for unarranged borrowing! Arrgh! When will they stop charging people?

This brings my total claim to over £1500 now.

[Rooster-UK]

Hi Carpetbagger.

 

A word of advice.

 

Drop the contractual interest. There is no valid basis in law for claiming it.

A claim involving contractual interest was struck out.

The claimant appealed. The case was heard in a higher court and the strike-out was upheld.

As this was in a higher court, a legal precedent has been set against it.

In view of this I think that you would be very wise to drop the CI.

 

Regards, Rooster.

[steven4064]

Sorry rooster - the claim that was struck out was for CI on the basis of mutuality in the contract. There is still the possibility that CI might be claimable on different grounds. Sorry, just being pedantic.

 

The lost case however does seem to give authority to claim charges+the interest charged on those charges+8% interest on both.

 

Steven

 

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[Carpetbagger]

Yipes, so I'm really confused now. Which case are you referring to?

I know there are loads of people on here who've claimed contractual interest and got it it before the court date. There's a thread on the Abbey National section where GaryH advises this:

 

"to stand any chance whatsoever of getting the contractual rate in court you will need to attempt to invoke equities juristiction to award compound interest by alleging a breach of fidiciary duty. Which means obviously that first you've got to try to establish a the existance of a fiduciary relationship in the first place. Even if you were successful in doing that then its solely at the courts discretion as to what rate is equitable under the circumstances.

 

Google and have a read of

 

Westdeutsche v. Islington BC. [1996] A.C. 669"

 

What is fidiciary duty? Could I have a case for saying that Natwest being in contravnetion of the Social Security Act of 1996 is a contravention of their fidiciary duty?

At the minute I'm thinking of taking this to a solicitor to deal with, because my health is not so good due to all the strain I'm under. Do you think that would be a good idea? At least then I'd be happy it was all legally correct.

 

[Carpetbagger]

Also found this thread by Bankfodder:

http://www.consumeractiongroup.co.uk/forum/general/7252-new-way-looking-interest-40.html

 

It seems like lots of people have succeeded with claiming contractual interest, albeit before it gets to the court stage. So I guess the question should be, how does one make a case so watertight that Natwest won't want to take it to court?

[Micky the Hippo]

I've got two claims at the acknowledgement stage claiming unauth and auth and stat in variance

 

can't go wrong with that surely? I figure it gives me something to give away at the negotiation stage

 

and you could always claim stat on the interest on charges surely, the two interest charges aren't the same thing are they? the interest on the charges is effectively a charge in itself

 

seeing as we're talking, how long after the 14 day deadline for acknowledgement would you wait before applying for judgement? NW are now two days late, served on the 13th.

 

sorry for the minor diversion

[Carpetbagger]

'Fraid I can't help you with the acknowledgement/judgement thing Hippo, I dont even know what that is. I'm just trying to get my claim to the court in some not too shoddy manner.

Thanks for suggestion of alternate claims though. I'm not sure I'll do that though, because surely it weakens the claim for the higher rate if you also show you'd settle for the stat? Sure I'm being dead thick, my mind is a complete jumbled muddle today, and I feel very disponandant about the whole enterprise.

[Micky the Hippo]

I thought the same when I first saw the tactic, my wife is a barrister and she says it's absolutely routine, a barrister will argue for a result and if denied it will smoothly argue the next variance and so on and let the judge decide

 

you go with a single option and you're putting your eggs into one basket

[Carpetbagger]

Can I just get this straight Mickey? So I fill in the n1 3 times, but each time with different figures for Unauthorised Authorised and stat? Do I have to put a note anywhere saying I'm filing variances? Or does the court just automatically go through them one after another?

 

That's actually not as difficult as it seems, because the interest calculation spreadsheet gives me all three figures at once. So I think I'll do what you say. Cheers Mickey!

 

I read up on that lost case too- it doesnt seem as devestating as people were making out, the guy claimed CI Plus 8%, and maybe CI again on top? you can either have one or the other, not both.

http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost-9.html

[Micky the Hippo]

whoah! brush on the step by steps there fella, the three copies are just that, three identical copies

 

below is the text I subbed into the template, it's cobbled off other threads

 

that 'mutuality and reciprocity' argument has been bashed down at least once by a judge since I submitted it so best crib up the latest form of words, you're on a sticky wicket if you ever end up in front a judge arguing CI whatever though I think, insert the relevant interest rates, this was for Barclays

.........................

9. Contractual Interest

a) The Claimant claims compound interest on the amounts claimed under the principle of mutuality and reciprocity in the contract between the Claimant and the Defendant, using the rate and method specified in the said contract, and as is applied by the Defendant to monies it is owed.

 

b) The Claimant’s grounds for seeking restitution of the compounded contractual rate of interest is that the Defendant would be unjustly enriched if the Claimant's entitlement was limited to the statutory rate of interest in that the Defendant has had use of the sums and would have used these sums to re-lend at commercial compounded rates.

 

c) The Claimant contends that the taking of unlawful penalties from the Claimant’s Account is unauthorised borrowing by the Defendant. Therefore, under the principle of mutuality and reciprocity in the contract between the Claimant and the Defendant, in the first instance the Claimant has calculated compound interest originally charged by the defendant, being 27.5%.

 

d) In the alternative to 9.c), should the taking of unlawful penalties from the Claimant’s Account not be deemed to be unauthorised borrowing by the Defendant, then, under the principle of mutuality and reciprocity in the contract between the Claimant and the Defendant, the Claimant has calculated compound interest at the Defendant’s authorised borrowing rate, being 15.9%.

 

e) In the alternative to 9.c) and d), if the Court decides that the Claimant is not entitled to the contractual rate of interest under the principle of mutuality and reciprocity in the contract between the Claimant and the Defendant, then the Claimant has calculated interest under section 69 County Courts Act (1984) at the rate of 8% a year

 

f) Details of interest calculated & rates used are attached to these Particulars of Claim (Appendix 1) as follows:

Sheet 1 – Compound interest calculated daily at an annual rate of 27.5%

Sheet 2 – Compound interest calculated daily at an annual rate of 15.9%

Sheet 3 – Simple interest under s.69 of the County Courts Act 1984 at an annual rate of 8.00%

 

10. Accordingly, the Claimant claims:

a) The return of the amounts debited between xx/xx/00 and xx/xx/07 in respect of charges and the interest charged as a result of those charges in the sum of £xxx

 

b) All applicable Court fees - currently £120

 

c) Contractual interest at an annual 27.50 % compounded daily from the date of each transaction to xx/xx/07 of £xxx, and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £xxx

d) In the alternative to 10.c), Contractual interest at an annual rate of 15.9% compounded daily from the date of each transaction to xx/xx/07 of £xxx and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £xx

 

e) In the alternative to 10.c) and d), interest under section 69 County Courts Act (1984) at the rate of 8% a year, from the date of each transaction to xx/xx/07 of £xxx, and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £xx