Bank Charges - Please help!

[ncci]

Heya!

 

Firstly, I am aware that the bank charges are currently going through the test case and everything is on hold. But please read my story and offer some advice.

 

In November, I went £2 over my overdraft limit (only £150), I am paid monthly and this happened 2 weeks before any money was due to enter my account. I could not even put £10 into my account to bring it back in to the "good red".

 

I contacted the bank and they said if I can not pay any money in to it, they could not help me (short answer).

 

A week later, they withdrew my "planned overdraft" and replaced it with an "unplanned overdraft" and charged me over £100 in fees. I took quick action to setup a new bank account somewhere else for my monthly pay to go into.

 

Once the fees were applied, they added even more charges because of their fees, and it just kept snowballing, month 1 saw £100 charges, month 2 saw over £200, month 3 saw an additional £250 and now it is April, I have calculated what I know I owe the bank (from using my planned overdraft) and managed to pay money into it. The account is now over £600 overdrawn and every single penny is charges and interest, £300+ now gets added to the account every month in charges.

 

Lloyds TSB sent their "Collection Department" after me, asking for £70 a month to pay back in to the account, I told them I believe I should not pay any of the amount back and they have now advised me that they will take the account to their solicitors and warned me they could start taking money out of my wages.

 

I have written to the FSA and emailed them for advice, but get the standard "test case" answer, after 3 tries I got a personal response but it still explained nothing can happen until the test case is over. The thing is, the bank charges keep getting applied every month, by the time the test case is over it could be over £10,000 overdrawn!

 

I was in no position to clear the overdraft when it first went £2 overdrawn and I am definately not in a position to do so now. I have written to Lloyds complaints department over 4 times now, the first time I got a "test case" response and no replies every since (December). I have kept records of my statements, the standard "£30 a day" letter they send when your overdrawn, any reply I have got from them and any letter I've sent them.

 

I need some advice, the solicitors have not yet got in touch but I'm sure they will soon do so. My original plan was to take them to court and fight the charges (over £600 for going £2 overdrawn) - would I have won? Now it is going to their solicitors, what can I do? I have exhausted the staff in the branches, I refuse to answer there phone calls (in fear of mis-communication and being bullied in to paying for it) and have exhausted their complaints system, the FSA can not offer any help and I have had 2 lengthy phone calls with their collections department telling them I can not pay the amount, and that I am not going to until the complaint has been settled.

 

Please help!

 

NC

[RTWMan]

Lloyds TSB did the same (or something very similar) to me but that was after I had started the legal process rolling. I submitted a Small Claims Court claim, they asked for the action to be stayed, the judge agreed, I wrote to the judge (maybe I should have made a formal application but anyway the letter worked) and the judge rescinded the stay order! I said that LTSB had acted contrary to the spirit of the OFT/FSA guidance. We are in Court this week to review the case and the stay order.

My advice would be to start a Small Claims action asap. I doubt that anything else will stop LTSB.

Good luck

[ncci]

The scary thing is, I can't afford to take them to court yet. When the solicitors do contact me, should I, or could I, tell them it is under 'dispute' or is there something I could say to them that would make them go back to Lloyds TSB?

 

My credit history isn't great, but I am doing my utmost best to repair it, I have a much better job now and have plans to pay any debt I have outstanding - but this isn't helping it.

 

I know from experience that keeping records of any communication is mandatory, and that's what I've done on this case. Makes it easier to find out when I first contacted them, what I've told them etc.

[Michael Browne]

There is nothing to stop you claiming your charges back, ie the prelim and LBA letters,you don't have to file a claim at court. That will put it into dispute.

 

If in the meantime they issue a claim for the OD, (which is highly unlikely) you can counterclaim for the charges

[1st Progeny]

Write to the bank and put the account into dispute. When the account is in dispute. they must freeze all action on your account. This means that:

• They cannot add any interest to this account
  
• They cannot add any charges to this account
  
• They can not issue a default notice on this account, nor pass the debt onto any third party. Furthermore they cant pass any information regarding this account onto the credit reference agencies. To do this would be in breach of Section 13.6 of the Banking Code.

Im no expert, i would try and get some help from Bookworm or Sticky to name a few. Explore the CAG site theres plenty of people who will help you, plus loads or literature/example letters

Bon Chance

[ncci]

Heya!

 

I have already wrote to Lloyds numerous times complaining about the charges, talked to people in the bank and their collections department also.

 

They have told me they can not do anything until the test case is over and suggest I pay the balance and await the result. I refuse to pay the balance as I believe they are unfair (£600+ charges for £2 overdrawn - all because I could not afford it!) and even if I did, there are charges already in the system, so unless I pay £300 above the current overdraft (which would now be around £900) the charges would keep snowballing because they keep charging me for going overdrawn further because of their own charges.

 

Eek! So would this count as now being "under dispute".

 

This may sound dumb and is probably explained on here somewhere, but what does LBA mean?

[Michael Browne]

I have already wrote to Lloyds numerous times complaining about the charges, talked to people in the bank and their collections department also.

 

Writing to complain about charges is not the same as actually claiming them back

See here:

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/671-2-letter-preliminary-approach.html

 

and here:

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/92-3-letter-before-action.html

They have told me they can not do anything until the test case is over and suggest I pay the balance and await the result. I refuse to pay the balance as I believe they are unfair (£600+ charges for £2 overdrawn - all because I could not afford it!) and even if I did, there are charges already in the system, so unless I pay £300 above the current overdraft (which would now be around £900) the charges would keep snowballing because they keep charging me for going overdrawn further because of their own charges.

But since you are not using this a/c anymore, they can add whatever charges they like, you just claim them all back.

Eek! So would this count as now being "under dispute".

 

This may sound dumb and is probably explained on here somewhere, but what does LBA mean?Letter Before Action. See above

[ncci]

Excellent, thank you. Already kept a track of my charges (so I knew how much I actually 'used' rather than charged). The charges come to more than the overdraft so far, for an end result would it be fair to suggest 'writing off the account' (in a way) or ask for a full refund (only like £50 over). I would just be happy for them to remove the reference from my credit file, close the account and call it a day, anything extra is a bonus!

 

Will get the prelim letter sent off tommorow and then the LBA in 14 days, I then assume if the debt collectors, solicitors etc. approach me that I explain my actions and tell them the account is under dispute and they should leave me alone?

[RTWMan]

Hi

Can someone explain exactly when an account becomes 'in dispute'?

 

I ask this because LTSB added significant charges to my account after I had sent the LBA (and if I remember correctly) after I had filed the court case.

[elsinore]

Hi

Can someone explain exactly when an account becomes 'in dispute'?

 

I ask this because LTSB added significant charges to my account after I had sent the LBA (and if I remember correctly) after I had filed the court case.

 

When you send a Preliminary Approach for Repayment you effectively place the account balance in dispute and the OFT Debt Collection Guidance comes into play.

 

Deceptive and/or unfair methods.

2.8 Examples of unfair practises are as follows:

k. not ceasing collection activity whilst investigating a reasonably queried or disputed debt

 

http://www.oft.gov.uk/shared_oft/business_leaflets/consumer_credit/oft664.pdf

 

That doesn't mean that LTSB will take any notice of course!

 

When you get to filing your claim, include the charges that LTSB have added in the interim. If you have already filed a claim you can apply to amend the sum claimed and add on the extra charges.

 

Els

[LondonGuy23]

Hi, sorry to go over old ground here. I just want to make sure that I have the correct information as I have heard conflicting statements on this.

 

If you close your account can LloydsTSB still charge you interest and charges if you are overdrawn? I have heard people say that they can but you can claim it back. Surely this depends on the outcome of the current court case. I have also heard that they are not allowed to charge you anything (eg interest) once your account has been closed.

 

Anybody know the truth?

 

Cheers.

[rtwman49]

Thanks, Elsinore

 

It looks as though I have done the right thing - I have now got a hearing to decide whether or not the action should be stayed (see my post http://www.consumeractiongroup.co.uk/forum/lloyds-bank/138472-advice-welcome.html#post1471549 ). This info will be a useful arguement against the stay.

 

Shame there are no replies to my post though!

[LondonGuy23]

When I went to the bank today I asked them to close my account. They said they they can not close the account while I owe money on the account. Also, I think it would be better if we can get the charges paid back first, and then claim them back. Imagine if the high court favours the bank!! We will be in trouble with the amount that we would have to pay back, due to much more interest, charges etc.