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

[OldBear]

oldbear I'd say the sooner you get your LBA out the better in that case. Once its gone, you won't have to accept an offer based on the prelim figures.

Only problem with that is that I have to give them 14 days to consider the Prelim letter sent today, do I not?

 

Bong - thanks for that. Vamp recommends that one enters the average O/D balance for the month each time. It will probably be sufficient to works this out for a few reprresentative sample months and use that as the approx. amount each month. Or even just take a rough - but reasonable - guess for each month.

Ah! Only the O/D balances!

 

I was wondering why I was still getting a positive balance on average over the month.

 

So I only add the days I'm overdrawn and divide that total by the number of days I'm overdrawn to get my average O/D balance, Yes?

 

Apologies if I'm being thick here.

 

OB

[Guest bong]

Only problem with that is that I have to give them 14 days to consider the Prelim letter sent today, do I not?

 

if you only sent your prelim letter today what I would do is send a new prelim saying it replaces your letter of 27 Jan which should be disregarded.

 

as regards your 2nd query I would say that is ok - the interest only relates to the o/d and no account is given of credit balances in the interest charged.

[Mindzai]

If you have a positive balance when the interest is taken, you won't have been charged any interest on the charge, so you won't be able to claim any interest on that interest.

[Guest bong]

yes Bill I would say that is a perfect explanation of the basis of charging contractual interest.

 

I think markj, in common with a lot of people, is confusing it with the interest he has been charged, which we are also reclaiming where it relates to the penalty charges.

[markj]

If we are only claiming on the basis of reciprocity so the bank owes us unauthorised rate on all unlawful charges, surely the only column required in a spready would be one that works out how many pounds (eg 30) for how many days eg (1000) and then compounds interest at eg. 29.9%

 

What am I missing with all the extra columns in the more sophisticated spreadsheets?

 

Thanks for your indulgence.

[Mindzai]

If we are only claiming on the basis of reciprocity so the bank owes us unauthorised rate on all unlawful charges, surely the only column required in a spready would be one that works out how many pounds (eg 30) for how many days eg (1000) and then compounds interest at eg. 29.9%

 

Not quite, but unless you particularly want to know dont worry about the maths, the sheets take care of that.

 

What am I missing with all the extra columns in the more sophisticated spreadsheets?

 

Thanks for your indulgence.

 

If the charges occur when you are OD, you also get charged interest on the charge. You can then charge interest on this interest.

[Guest bong]

markj, the spreadsheets are also calculating how much of the bank interest you have been charged relates to the penalty charges in your overdraft, because that is also reclaimable.

[Guest bong]

sorry mindzai, posted at same time. will leave you to it:D

[markj]

Surely compound interest is by it's nature calculating the interest on the interest? Am I being really dumb here? What can I claim in addition to my unlawful penalty charges compounded at the unauthorised overdraft rate?

[OldBear]

Thanks all, I've got it now.

 

Bong, I'll see what reply I get back from Natwest to my Prelim and take it from there. If I get a settlement early, so be it. If not, I, at least know what I should be doing.

 

You people are the best. thanks again.

 

OB

[bill-k]

Surely compound interest is by it's nature calculating the interest on the interest? Am I being really dumb here? What can I claim in addition to my unlawful penalty charges compounded at the unauthorised overdraft rate?

If you're O/D, and your O/D gets increased by £30 due to a penalty being charged, then £30 of that O/D has been caused by an unlawful charge. When they charge you your O/D interest at the end of the month, this will include that £30, so you reclaim that portion of the interest they charged you as well as the penalty itself.

 

Not only that - but you also claim contractual interest on THAT bit of interest, too !!

 

That's what all the extra columns are for.

[chorlton1]

Help Please!!

 

I have posted this in Barclays and the general forum to no avail so thought would try here...

 

To set the scene, I have recently had an in full settlement from American Express on a charge card. On that card, as with all charge cards, no interest is levied on what you spend and the full balance is paid back monthly by DD. If the DD is refused, Amex charge a penalty at a fixed rate on the balance (effectively "interest") but they call it a late payment fee.

 

I also had a Barclays Premier Card, also a charge card. Same rules applied as with the Amex card - I paid the monthly balance in full by DD and there was no interest applied. On that account, when my DD was returned unpaid by my bank, Barclays Premier Card applied 3pct/month "interest" charge (they called it "interest on your standard balance") to the full balance of the account. This is the only time "interest" was ever charged during the life of the card. There were no other charges of any varietty applied, eg late payment charges, other than the 3% "interest".

 

My question is this - Does the "interest" therefore represent a penalty charge and as such can it be reclaimed as unlawful?

 

3% per month is clearly more than Barclaycard require to service my debt, as otherwise they would charge that as the standard interest rate on all their credit cards.

 

I strongly believe I can recover at least some of this (say the difference between the standard barclaycard interest rate and 3%) but I would like some advice from those who know,and also if there is any precedent.

 

I have trawled all the threads I can but cannot find a similar case, although I cannot believe I am the only charge card holder who has been late in paying!

 

Any advice gratefully received - the total claim would be over 7k

[Memnoch]

Erm, the interest is now confusing me. As, mentioned previously, I have never had an overdraft facility on my account due to not opting for one.

Does that mean that all the O/Draft interest charges are to be added even though on the odd occasion when this does appear on my statement, 9 times out of 10 i am in credit on my account. So can only assume this can relate to earlier in the month when I was not in credit?

 

Anybody ?

 

Do I need to add these to the charges side of the spreadsheet instead to save confusion ?

[bill-k]

Memnoch, from what I can make out, you have not been charged any, or much, interest at all on your account. If that is the case, then I doubt if it will be worth the time and effort of claiming that interest back in the extra columns. I didn't, as I was in a similar situation. I just claimed the penalties, and the contractual interest on them, and that was it.

 

Chorlton - Sorry, I can't help much on that myself. I suspect it hinges on exactly what these penalties are called in the original agreements, and how they are described. But also any subsequent descriptions of them should be taken into account. A penalty by any other name would smell as sweet.....

[Glenn UK]

If you have a positive balance when the interest is taken, you won't have been charged any interest on the charge, so you won't be able to claim any interest on that interest.

 

Perhaps another view, if you incur charges then you either don't earn interest or you pay more.

 

I don't believe the imposition of bank charges is a cash neutral issue, the claimant must lose somewhere because the balance will alter and impact on the interest earned/lost.

 

What i did, and I'm not saying it perfect/right, is changed the Acc balance for a small negative value. This has the disadvantage of being completely arbitrary, but unless we input all transactions and various interest rates and apply them all the same way the bank did we cannot actually know how much we paid.

 

I believe that the estimates in the sheets will probably underestimate in most cases by a significant amount,

 

I have no basis in fact, only a gut feeling.

 

JMHO

Glenn

[chorlton1]

Bill - K : many thanks

 

Glenn : I don't want to hijack this thread, but I don't suppose you have a view on my post?

[Mindzai]

Perhaps another view, if you incur charges then you either don't earn interest or you pay more.

 

I don't believe the imposition of bank charges is a cash neutral issue, the claimant must lose somewhere because the balance will alter and impact on the interest earned/lost.

 

Hmm that is a good point. I'll have a think about that.

[Glenn UK]

Bill - K : many thanks

 

Glenn : I don't want to hijack this thread, but I don't suppose you have a view on my post?

 

Chorlton

 

You need to go back to your contract and then do some research on penalty charges.

 

THe T&C will tell you under what circumstances the interest is charged. Dont worry too much what its called, since it is how the charges is applied and the scale of the charge that dictates whether it is a penalty.

 

When you have posted the relveant terms and done a little digging if your still unsure or want a second view post alink or pm me/bill/mondzai (well im not the expert here, just a gobby git from essex!).

 

Anyway if you have posted then feel free to drop me a pm and ill see if i can help, ill have an opinion, i always do, whether it is of any use is entirely a different matter.

 

HTH

 

Glenn

[angry-in-suffolk]

Hi folks,

 

For my sins I'm a Halifax customer who had an 'arranged' overdraft limit.

There have been times when they have paid a direct debit which took me over my 'arranged limit' and they applied interest at a higher rate but didn't make a penalty charge.

 

Try as i might, I can't see how to use any of the spreadsheets to get a figure to claim back as they all seem to need an initial charge in order to work out the interest.

 

Am I missing something obvious or can't the spreadsheets do this yet?

 

thanks

 

Kev

[bill-k]

Hi, Kev. It's the penalty charges that are unlawful, not the interest charges, I'm afraid. If you weren't charged a penalty, then I don't think you have anything to claim. That's why there's not a spready to cater for this.

 

Sorry, mate.

[JonCris]

If you put a figure to the extra interest charged then use that as your penalty charge & add the contractual compound interest to that

 

ie extra interest charged on say £100 unauthorised borrowing at 35%pa = £35pa when it is normaly 15%pa = £15pa making the difference £20pa

 

The difference of £20 or 20%pa divided for the number of days it is imposed is your "penalty" charge to which to add interest

 

Bill just read your post & would like to say if extra interest is being charged for going into unauthorised borrowing it's still an unlawful penalty charge.

[bill-k]

JonCris - If the unauthorised borrowing rate of interest is in itself unlawful, then this is the first I've heard of it. And if that is so, then I must apologise for a misleading post to Kev.

 

How, then, do we support the lawfulness of our reciprocal charging of the same rate in contractual interest, when we add this to our claims for the return of penalty charges ?

 

Honestly - this has come as quite a shock !!

[JonCris]

An 'unauthorised' borrowing rate IS a penalty imposed by the banks & again does not reflect their liquidated losses. It's meant, as are their penalty charges, to deter us from going overdrawn or (at least that's what they would like us to believe).

 

How can "borrowing" extra money over and above that 'agreed' cost the bank more in losses. It doesn't in fact as has been witnessed on many occasions they extract much more money out of the consumer..........well at least they did until CAG came along

 

Forgot to mention.

We support the reciprocity of our argument on the basis that as the banks do it to us then we, in order to level the playing field, have every right to do it to them.

 

It would be for them to argue their charges are NOT unlawful & that would mean entering a court to argue their case. At which point we could & would start demanding full disclosure etc:

[bill-k]

I agree with the logic on that, JC, and indeed have taken a firm to the SCC for extortionately high interest rates and lost on the grounds that I had, in effect, agreed to those rates. This usury annoys me intensely, but is it deemed unlawful, as are the fixed penalty charges ?

 

Have people won this interest back ?

 

(What a topic of convo for 0500 Sunday, eh ?)

[JonCris]

As I don't know your case I can't really comment other than to say if you agreed to pay a sub lenders high rate of interest from the outset then of course that would fail even with the usury argument which is not unlawful but imposing extra charges because of default whether they be in the form of higher interest or fixed charges they are still a penalty & unlawful if they DO NOT reflect their losses.

 

As an interest only claim.........I don't know but I don't see why not it's the same argument.

 

Yes it is