Play them at their own game

[Gez]

Well, now that the nice FSA have made bankers untouchable for another 6 months, anyone about to start a claim is going to be frustrated to say the least.

I have mentioned this on a few occasions before, not sure if anyone has actually done it yet, but it'll certainly get some people their money back straight away or at least a decent slice of it.

 

1. Open a new account somewhere else & transfer your income into it.

2. Go overdrawn on the account which owes you in charges to the amount they owe you. If you are owed more than you can overdraw, just overdraw as much as possible until payments start getting declined.

3. Write & tell them they no longer owe you money, or now owe you less money and as far as you are concerned that is the end of your relationship with them.

4. Put in a claim for the remainder of what they owe you in charges.

 

Ok, so they will probably default you & send a goon or two to harass you and maybe even take you to court, but hey, they're going to do that anyway aren't they.. However, at this point you inform the court that the dispute is over bank charges & ask for a stay. Its just a case of whether or not a judge will grant it, I see no good reason not to, especially if you have now already put in a claim for the remainder of outstanding charges after going overdrawn.

 

The only possible risk I can foresee is being lumbered with costs should the judge deny a stay & you lose. I really just can't see that happening. By all means pick this plan to pieces, I might have missed something..

[Guest Old_andrew2018]

Hi Gez,

IMHO the are to many risks, I would not wish anyone the get a ccj,

[Gez]

Yes, I agree its risky. I just thought about seeing exactly what those risks might be.

The principle of what you are doing is the similar to theirs. You just take the money, whether they agree they owe it to you or not. It might only be possible on accounts where charges are more that you could overdraw

 

They owe you £500 in charges, you spend £450, they now only owe you £50. You then do a claim for that £50. Now they can't send in the DCA or paint your credit file black because the account is in dispute (well they might anyway, but that would be shooting themselves in the foot).

 

The only way you could become liable for costs or end up with a CCJ is if the banks come out with a victory, or you are found to have acted unreasonably in litigation. Given the current situation, its hard to imagine that.

 

I know its bloody risky, but worth a bit of discussion? Maybe it could go somewhere, maybe not. I'm sure that once, the thought of the possibility of suing a bank because their charges could be unlawful penalties would be risky..

[yourbank]

My mother always said to me two wrongs do not make a right.

[Gez]

Its not a wrong, you're taking your own money..

[Bookworm]

My mother always said to me two wrongs do not make a right.

Didn't she also tell you "it" would make you go blind or that eating carrots would make you see in the dark? Mothers are very over-rated when it comes to wisdom, I should know, I am one and I am not wise at all!!!

 

Anyway...

 

Gez, I don't think your idea is that different from the advice I've always given, if maybe a bit more aggressive. When people go to parachute account and transfer their business there, the 1st bank is left with an o/d which may or may not be composed solely of charges, so I don't think that people will necessarily need to draw any money anyway, the situation could already be at that point with no additional action from customer.

 

If customer starts his claim, then the bank can not start their own separate action, or if they do, you then bring it to the court's attention that the amount is already subject to another action and that should stop the bank's action in its tracks... At best, a judge would expect them to then counterclaim your case for charges with their case for the o/draft... which I think they may be reluctant to do, considering that if you lose, they'll get to keep the money anyway.

 

In the meantime, they have a choice to ask for a stay so that you can't get your money back, but that also means they can't get their money either. Checkmate.

 

Meanwhile, you can use the money that was being used to service that debt month on, month out to pay other debts, the main thing being that you get your mitts on your cash before they do.

 

As for costs, as you know, it's unlikely you'd get costs against you apart from your court fee if you lose, and a CCJ doesn't get registered if it gets settled within a month of judgment, and even that would only happen if the bank had counterclaimed. Losing the case you had initiated doesn't get you a CCJ, the bank would have had to either have counterclaimed or once you lose your case, then they start a case to get the o/d money back at which point you might end up with a CCJ.

 

In your scenario, the difference is that you start with an account already back in black (catchy sentence that ) and deliberately put it in the read to the extent of the charges you are reclaiming... I don't see that it makes such a big difference to the end result, tbh, and I think the risks are not that different from whether you put yurself in "jeopardy" voluntarily or whether the bank does it for you when they pile on the charges and take all the control away from you.

[PGH7447]

I Complained to the FSA yesterday about their one sided approach to this issue, and that it seemed to consumers that the FSA are far from impartial, and that to establish the status Quo they should place a waiver on banks charging for unathorised OD fee's etc, still waiting for a reply:)

[Gez]

Thanks Bookworm.

 

I was perhaps being a bit cautious, mindful that it could have been thought to be a bit wreckless. I wouldn't want to just outright suggest people do something that could have flaws. In my honest opinion, I see nothing at all wrong with it. The situation you would find yourself in would be just the same as many already find themselves in, who simply can't afford to pay the charges because they are now being piled on at such a rate that for some it is not possible to pay them.

 

The difference now is, these charges are now being masqueraded as a "service". So, inarranged/informal/instant (call it what you like) overdrafts are available to all at any time. Yes it could only work for those who's accounts are in the black, or not far into the red.

The underlining advantage of doing this, is you get your money back now, or at least a few hundred quid of it. They will have to wait if they want to fight you for it and it is all of their own doing.

[Gez]

Come to think of it, 2 other advantages would be that your claim would be for less money, so there might be a lower court fee to lay out to make your claim. Plus all those lovely £millions that they forecast coming in whilst they play cat & mouse with the OFT would be reduced.

 

If you got a loan or mortgage with that bank, there would be some serious thinking to do first tho..

[Bookworm]

Yes, mortgages are a different kettle of fish altogether and I would never recommend anyway to gamble with that.

[hme.4x4]

This is a post very relevant to me at the moment.

I have and Abbey account with a £700 overdraft. I have submitted a claim for £1200 in charges. So the money they owe me is more than the money I owe them (makes a change)

Yesterday a direct debit was reversed because it would have gone over the overdraft by 54p! So they have added £115 in charges on top of my overdraft.... So now I have an overdraft of £815 with an agreed limit of £700.

I have a Natwest Step parachute account and have decided to to move my principle account there. They have actually been very very nice to me and yesterday I spoke to them and they have upgraded the Step account to a Current + account. So I'm off Abbey!

However, I assume that they will continue to add charges to the overdraft after I am gone and will continue to pursue me for the debt even though they owe me £1200. So do I need to submit another claim for the charges accrued since I claimed first time??

[Bookworm]

Depends, really. If you haven't filed at court yet, sue for the amount accrued up to filing date. You can alter the amount later, but there'll be an additional fee. Or you can ask them to pay up the additional amounts at settlement, and if they say yes, great if they say no, then you'll have to sue them again.

[hme.4x4]

Ok Thanks for the support!

[semyaza]

Subscribed.

 

Surely the risk will be if the charges are not ruled as being unfair and you have spent this money you will be slightly up the creek?

 

I really wish I had come to this website sooner.

 

I had loads of issues with First Direct. I was forced into a loan to pay back an overdraft and credit card and with PPI. Although from what I can tell the terms were ok. FD cover their back. Admittedly I got into troubles as I didn't have enough income and was using the credit card to pay my usual income, I was self employed.

 

By this time I got on board with claiming bank charges it had already been put on hold. I had the same problems as HME, overdrawn, charge added, failed direct debits, charge added, etc, etc. This really screwed me up.

 

This year I defaulted a couple of times on my loan but entered into a new agreement with FD and combined my overdraft, loan and credit card. With the exception of the credit card, a lot will be unfair charges. Everytime I could make a payment the money would be grabbed before I could use it.

 

I'm afraid to take action now.

 

Is it also possible to claim back on credit cards that have been settled? I settled one 2 years ago which I also had problems with.

[Bookworm]

I would say the obvious (though not necessarily easy for a lot of people) thing to do for people wanting to try this tactic would be to stick the money in a high interest account so that should this happen, you do have the money handy to repay.

 

Yes, go after the credit cards, these are still getting settled by the CC companies, whether the account is closed or not makes no difference. Just make sure you make them aware you want settlement by cheque from the start. ;-)

[Gez]

Credit card claims are reasonably straightforward claims like bank charges used to be.

My question to anyone who asks if they can reclaim again is this.

If someone shot you in the foot & went to jail. If he came & shot off your other foot when he got out, would you accept his explanation that you can't report him again because he has already been to jail for shooting your other foot? Ok the analogy is extreme, but the principle is the same.

 

It can hardly be expected that these charges can be ruled to be fair. In particular, charges for considering & declining payments would surely be outlawed altogether.

It would probably be wise to overdraw less than you are owed if your charges were applied after the new fiddled with T&Cs in 2007 just in case a "fair amount" is agreed by the OFT.

 

For claims where charges were all applied before September 2007 (perhaps with the exception of Lloyds accounts), I see no reason why you couldn't overdraw the whole amount if it is possible because those charges can only be ruled to be penalties. If they're not ruled to be penalties, then I guess it is time to accept that the law is merely a temporary obstacle for financial giants to simply work their way around..

[dave]

It's pretty much what I suggested at the start of the stays.

 

I was shot down in flames for suggesting it; I do, however, still think it's the way to go.

 

Let's not forget, this is more akin to a guerrila war - use any means possible.

[Gez]

I

I was shot down in flames for suggesting it; I do, however, still think it's the way to go.

I have to admit, I was expecting the same thing, which is why I haven't openly mentioned it until now. I certainly haven't bothered to bring it up at MSE because there are almost as many people there who believe you deserve to be charged for your delinquency.

But yes, bankers will and do use any means possible, so just as the thread title suggests..

[dave]

Yes, I would expect it over at MSE, but not here, by our own team members.