Hi everyone.

I have read hundreds of posts on these forums and am still in the dark about calculating any contractual interest. Can anyone point me in the direction of a place that will explain this clearly and simply!

A couple of examples:

My account is a student royalties that has had varying agreed overdraft limits over its time. I have received many charges for going over my limit, usually the standard £10 one. Sometimes I have an interest charge along with the £10, but not every time. If they have taken the charge the next month but in that time I have been paid, thus putting me back with the agreed overdraft limit, can I charge them any interest on this?

If I am close to my overdraft limit and the bank allow a direct debit payment to go through, thus putting me over my limit, what am I entitled to claim back here?

Thanks in advance for any help.

You may have read lots of posts, but it doesn't sound like you're reading the right things!

This is a list of all the charges you are able to claim from RBoS.

This will explain how to break down the charges.

I've also posted an breakdown of the various different interests which I can't find right now....will update once I've found it.

I have read those 2 threads and am still none the wiser (I might just be thick!).

I need to know exactly what I can claim interest on but I cant find anywhere that spells this out clearly.

I have many charges, referrals, returned d/d charges etc. but I have never spent any great length of time over my agreed limit. I would go over for a bit, usually if they'd allowed a direct debit to go through, then I'd get paid and be within the agreed limit again. Any referral charges etc. would be taken when i was within the agreed limit.

Am I to understand that the only way you can claim contractual interest is if you have a charge that puts you over your agreed limit and then any other charges received only while still over your agreed limit?

Thank You.

You need to find a thread explaining how and why contractual interest is charged. The post I'm referring to will explain the majority of interest as I think you have them all mixed up. Will be able to help later on but in work at the mo...

Can anyone please explain what contractual interest is and exactly what I can claim it on (in simple terms if possible).

I have a big pile of statements in front of me with £1800 bank charges, surely they're due me some interest!

You need to use this spreadsheet to calculate contractual interest.

This post is the mother of all posts regarding contractual interest. It's big but I suggest you dive in and read (some of it!) because claiming contractual interest isn't a simple as just adding it to your claim. It is fought heavily by the banks and your argument needs to be water tight. If the money is WORTH it, then you will do the time doing the research.

I wrote this quote below elsewhere on the forums, it doesn't fully answer your question but it's start. I will admit that it is not easy finding a beginners guide to contractual interest, but it probably doesn't exist for a reason - because claiming it is a difficult process which you need to be familiar with first.

A couple of people who I know have or are claiming contractual interest and might therefore be useful in reading their cases are Glenn UK and Tanzarelli.

That's all I can do.

The reason for claiming contractual interest is the argument that if you had unarranged money off the bank (ie money you weren't entitled to) you would be charged (for example) 29% interest. Therefore, as they have had money off you they weren't entitled to you are going to charge them the same amount for having off them.

 

The problem with using contractual interest is that the banks are more likely to put up a fight for it because, as you will probably have noticed, it does make a vast difference to your claim.

 

I believe that this sort of claim is much more likely to go to court and you also need to provide a very good argument as to why you should be entitled to the CI. Help for all this should however be available on the site somewhere.

 

I would suggest searching the successes forums for the word contractual and see what appears.

 

It is a decision that no one can make for you - it basically depends on how you want to play it. Would you rather an easy ride, more likely to settle earlier and are happy with the 700 quid or would you prefer a fight and are willing to go to court for the extra money.

Some people saying you can claim it on every single charge ever taken from you whether you have an overdraft or not (which would result in £1000s) while others saying it is only claimed on amounts taken while over the overdraft limit.

AAAAHHHHHHHH! This is very confusing!

The former is correct.

Whoever said the latter is way off the mark.

So if I have charges for example:

1. Going over my overdraft limit £10 + interest (almost every month for 2 yrs).

2. Unpaid Items £38 (multiple times).

3. Card Misuse £35 (multiple times).

I can take each one of them individualy and bang on unauthorised interest rate from the date taken?

If this is the case, I can add £1000s on to my claim!

That's correct....however, don't go working out yourself, use the spreadsheet I linked you to to work it out.

You can't simply claim back interest, only the percentage that is apportioned to your unlawful charges. For example:

A £500 overdraft with £100 of charges gets deducted £10 interest. You can claim £2 of the interest because one fifth of your overdraft was charges.

Again, the spreadsheets do this for you.

Last warning, compound interest is a difficult approach - ensure you know what you're doing. You have been warned!!

One last point.

The reason I have recieved some of these charges is as follows:

I have used my switch card to buy items in shops while still within the agreed overdraft limit. By the time the payment actually comes out of my bank, it has put me over the limit. As a result, I get the bank charges.

E.g.

Authorised Overdraft = £1200

21/06/01 My account balance = £1180 O/D

22/06/01 Switch Transaction £25

22/06/01 ATM withdrawal £20

22/06/01 My account balance = £1200 O/D

25/06/01 Switch payment from 22/06/01 comes off

25/06/01 My account balance = £1225 O/D

26/06/01 direct debit Vodafone £35

26/06/01 Unpaid Item charge £38

Does this situation come into play as the reason i am over is because I have tried to pay for something but not had the funds when it came off. This has not happened as a result of a bank charge.

It's quite simple really mate and I think you're getting bogged down over-complicating things.

Here it is in a nutshell.

You may claim back ANY item marked CHG on your statements EXCEPT items that are for SERVICES - i.e. arrangement fees, royalties fees etc.

It is NOT possible to claim back interest for authorised overdraft and since this will be mixed up with interest for unauthorised usage it can be VERY tricky to apportion this correctly leading you into a minefield.

It doesn't matter what the state of your overdraft was or any other considerations. You are NOT arguing about the legitamacy of the 'act' of charging, you are NOT disputing there has been a breach of contract on your part.

You are in fact disputing the LEVEL of the charges.

If you fill out one of Vampiresses (or Mindzai whoever he is) spreadsheets it will give you the interest you need to claim.

If you don't understand the issues relating to contractual or compunded interest DON'T CLAIM IT.

If you don't FULLY understand how to claim back overdraft interest, LEAVE IT ALONE.

Nuff said?