Why is no one claiming the contractual rate of interest???

[Mindzai]

Try adding this or something similar.

I calculate that you have applied £xxx.xx in levies and further, I also claim interest at a rate of 22.9% as set out in the attached list of charges. I believe this rate to be justified under the principle of mutuality and reciprocity, and is based on your Cash Advance interest rate that would be applied under the terms of the above mentioned account. Therefore the total amount owed as of today’s date is £xxx.xx.

 

Excellent, thanks.

[Kidson]

One further suggestion:-

 

Ask them to please calculate and advise as a separate item the precise interest levied on each and all of their default charges from xxxxxxx to xxxxxxx.

 

If they fail to do so, then by continuing as you were contemplating would leave you in a much stronger position, for if they then subsequently query the amount of interest you have claimed, you can show to the court that they were asked for the information - and declined and you took the initiative etc etc

 

Just a thought.

[BaldyBaldwin]

have just contacted citibank and apparently they do not charge a higher rate of interest for unauthorised borrowing!! what a nice bunch they seem..not

[deviousdame]

Hi Vampiress

I posted this question a little while ago - Do you know why is the last six years of charges so significant - is that a 'time issue' or a legal thingy (sorry I'm not very good with legal stuff)

 

I need this question answered as well if anybody knows???

 

see question 6 please here http://www.consumeractiongroup.co.uk/forum/general/26061-help-needed-again-please.html#post203089

 

Kind Regards

Damian

[NitrousOxide]

It's the Statutes of Limitation act. No more than 6 years. What beats me though is banks seem to ask back for more than this period.

[JonCris]

There is a dedicated thread to the Limitation Act & how some here consider that banks have negated their 6 year limitation rights by concealing their unlawful charges

[JonCris]

have just contacted citibank and apparently they do not charge a higher rate of interest for unauthorised borrowing!! what a nice bunch they seem..not

 

Pull the other one. I bet someone responds to counter that. Either that or citibank have been ripping off ALL of their costomers.

 

Have you got the small print

 

Just a thought. If we use todays increased contractual rate it allows for inflation

[too strong]

Hi guys.

 

I have been trying to confirm this very same question today. I assumed that you could claim for contractual interest but the posts I read don't even mention this.

Running into this thread has convinced me that I should charge them what they were charging me.

 

This really is a thread that shouldn't be allowed to die as it would seem to me that a lot of people are losing out on substantial claims.

[Mindzai]

I will be claiming the contractual rate on authorised borrowing, and I have informed Lloyds of such in my LBA. If they don't want to pay it I guess they'll have to take me to court and prove their charges are reasonable.

[Glenn UK]

I dont believe the cc companies dont charge extra for going over the credit limit, but im damned if i can find it on any of my statements.

 

But anyway i looked at the cash withdrawel rate as being a relevant rate to charge ie their taking your money and using it in the same way as you might take cash out and use it.

 

JMHO

 

GLenn

[rogerebaker]

Ive spent a few hours toting up my sons charges and decided to try and work out manually the interest they charged on the charges.

 

He was charged a total of £470 since 2002

 

I worked out the interest to be £350

 

so its nearly doubled the claim

 

I know its a long job and probably a bit advanced for the average Excel user like myself but an old fashioned calculater , pen and paper did the trick and its worth it.

 

Happy days

 

You don't tot up the total charges THEN add interest, that comes later. You take each charge, when it was taken then calculate the daily contractual rate up until the day your calculating it (you can add daily interest beyond that date later)

 

I suggest if he had charges taken as far back as 2002 you have probably miscalculated

 

This account was a student account and had £2000 free overdraft. I basically worked out what the account balance would have been if they hadnt added the charges month by month. As luck would have it it wouldnt have gone over the £2000 limit at all so I am fairly confident that every bit of interest added to the account over the 5 years was as a result of the charges which is where Ive got the figure from.

 

If it goes to court I will then add the contractual rate of interest which I think is 1.22% per month or about 15% per annum.

 

In hindsight I wish Id spent time doing this with the other claims but never mind.

[martynh99]

I'm having a go at charging them the full interest that they charged me , see link http://www.consumeractiongroup.co.uk/forum/hfc-household/22820-me-hfc.html#post200993 - prelim sent 23/8.

[CrispDust]

Related note - very confused by the difference between AER, APR and the monthly/daily percentage rate: monthly 2.05% x 12 is not = to annual 27.5%!

Can anyone explain in simple terms?

 

Try this:

Month Debt Interest per month

1 £100.00 2.05% £102.05

2 £102.05 2.05% £104.14

3 £104.14 2.05% £106.28

4 £106.28 2.05% £108.46

5 £108.46 2.05% £110.68

6 £110.68 2.05% £112.95

7 £112.95 2.05% £115.26

8 £115.26 2.05% £117.63

9 £117.63 2.05% £120.04

10 £120.04 2.05% £122.50

11 £122.50 2.05% £125.01

12 £125.01 2.05% £127.57

 

so £27.57 interest on £100 = 27.57% APR

Comprende?

[mollyhannah]

hi can someone tell me, the contractual intrest rate that everyone is talking about, does this only apply to credit cards or just bank accounts with overdrafts or just normal bank accounts where charges have been for bounced cheques and d.debits or all of the above.

 

Thank you

 

karen

[BaldyBaldwin]

has any one been successful in claiming back contractual interest???

[Mindzai]

hi can someone tell me, the contractual intrest rate that everyone is talking about, does this only apply to credit cards or just bank accounts with overdrafts or just normal bank accounts where charges have been for bounced cheques and d.debits or all of the above.

 

Thank you

 

karen

 

as far as i know, all of the above. It's the rate that would be applied by the lender that is stated in the contract.

[BaldyBaldwin]

when i calculate the interest should i use the retail rate @ 16.9% or the cash rate @ 20.4% ??? i know which one i want to use

[martynh99]

I've used the retail rate. I based this on the fact that charges show, at least on my statements, as spending on account and not cash advances. Also the amount they took from my payments and allocated against charges would have gone against paying off retail purchases.

As I type though, you have got me thinking now.

Since my account is now cleared off with a £0 balance and has been for 8 months, maybe I should be charging them the cash advance rate from Jan - Aug !!

 

** Note, these are my opinions only.

[BaldyBaldwin]

i can see what you are saying, but what if they classed the amounts they debited from our accounts as cash and then charged the cash rate against it.

i think i will use the cash rate and see want there reply is

[martynh99]

I would check your statements carefully, on mine they do classify charges as Spending on account and then cash advances are shown seperately.

 

I never expected to see the money paid out in charges again. Thankfully I've turned my finances round so i'm in no desperate rush for the money back. For this reason, I thought i'd give it a go and try and get the interest out of them - at the end of the day the claim for charges refunding is valid, all they/court can say about the retail rate is no so nothing lost.

[hagenuk]

From the Small Claims Pack.

 

Interest

 

You can claim interest on all money which is due to you whether your claim is for a fixed amount or damages to be assessed. The interest rates are as follows:

 

* If you have a contract which specifies how interest is charged, then you can rely upon this.

* Otherwise all debts carry interest at the judgment rate which is currently eight per cent per annum.

* Damages, once assessed, are awarded interest at a rate that the judge decides is reasonable.

 

This is not to say that a Judge would see the existence of a CC contract as reason enough to allow a claim for interest at a rate higher than 8% - if it gets before a Judge, that is!

[Mindzai]

- if it gets before a Judge, that is!

 

Exactly

[Glenn UK]

FWIW the actual rate you chagre should imho have some basis in logic.

 

For example if you contract has an excess o/d limit rate of say 24% then it would be reassonable to charge that rate when they borrow your money without your consent.

 

If on the other hand the same bank has a rate on another account at 29% I dont think you could show a link and shouldnt therefore charge that rate, I dont think anyone has suggested this its only an example.

 

If your account doesnt have a stated excess o/d or over credit limit then it would seem reasonable to presume that the cash advance rate would be a reasonable rate to charge on the basis that the company have used your money without your permission.

 

JMHO

 

Glen

[JonCris]

I agree. Also if you haven't yet repaid the bank because you disputed the balance it is very important to reclaim THEIR rate as it will be included in the outstanding sum. The only difference is that if you haven't yet paid off the balance then you can only claim for the period they have been adding their rate

 

After your calculation it may be that their is suffcient left to pay that you can offset your claim against the outstanding balance. Or it may be a little bit of both offset plus refund

 

If you have settled the balance previously, part of your claim should consist of contractual rates (purchase) of interest as you WILL have ALREADY paid them.

 

Under those circumstances any judge would be hard pushed to suggest that the claimant was only entitled to a lower rate.

 

If you haven't yet paid the borrowing you are only claiming back what they have already added to you account.

 

Its important not to lose sight of the fact this compensation is not a windfall. It is either interest on monies you have already paid & have not had the use of since it was unlawfully taken or interest on monies which have been inflated & that are being demanded by the bank.

 

PS Cap 1 have responded to my s78 "we dont agree with the OFT & we have passed your account to a DCA".......Total disregard for s78 & as we all knew, the Commissioner. copies off to OFT post haste.

[Mindzai]

I agree. Also if you haven't yet repaid the bank because you disputed the balance it is very important to reclaim THEIR rate

 

If you have settled the balance in the past, part of your claim should consist of contractual rates (purchase) of interest as you WILL have ALREADY paid them.

 

Under those circumstances any judge would be hard pushed to suggest that the claimant was only entitled to a lower rate.

 

Good point, the argument of reciprocity can only be strengthened if they have already applied this rate. They'd have a hard time arguing it was unfair or unreasonable.