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

[Guest bong]

I really willappreciate everybodys input as in what may need amending or does not make sense please:) or indded may or may not apply. As I said I am getting prepared for my fight with Goldfish as I have their letter stating it is their right not mine. Bloomin cheek!!!! and I filed last thurday at court. I just want to fire back a good argument if I have to, but I need you guys to advise:) please.

 

Milly x

 

Hi Milly, can I just get it clear what this document is for. Is it your case notes to prompt you at the hearing or is it a response you intend to file to their defence?

[too strong]

Thanks too strong, they in my opinion have weakened their argument and will lose as they have paid you it on your other account. After all how are they gonna argue now in court???? By the way is that barclaycards address as it says barclays.

 

Milly X

 

Oops, sorry

 

 

 

BARCLAYCARD

PO BOX 599

MANCHESTER

M60 3NF

 

That's what I thought!

[chorlton1]

You cannot make up your own rate of interest! This is not contractual interest and you have no legal basis for doing it at all.

 

Appreciate your comments but I am not "making up" my rate of interest!

 

My Premier Card rate, when I was late paying was at 42.7% APR - there was no separate penalty charge. My Barclaycard rate, when I was in default, was at 27.9% APR, plus a penalty charge of £20/month.

 

My argument is:

 

1) Barclaycard issue both cards

2) Barclaycard borrow money, internally or externally, at the same rate regardless of which card they are supporting - the rate of borrowing for them is therefore the same for Barclaycard and Barclays Premier

3) They say they need to charge a penalty fee if somebody defaults - this is the essence of every thread in this website!!

4) If 3 is true, and they maintain it is thousands of times a month when we make claims against credit cards, then the same MUST be true for other instruments of borrowing e.g. a charge card in default.

5) If 3 and 4 are true then the 3% interest on the charge card MUST contain an element of penalty charge, and that is what I am claiming for.

(and I am basing my claim on the difference between the charge they applied to me on the 2 cards they have issued based on 2 above eg. interest at 27.9% is a fair rate for borrowing, but anything above that on the charge card can only be a penalty)

6) If they say there is no penalty on a charge card, they cannot justify no penalty on any credit card they issue

7) Whatever they say, they will be subject to disclosure of their fee structure to either rebutt my argument or make an argument for themselves.

[natwesttookmymoney]

Hi, Chorlton

 

As I was reading your thread a couple of things were niggling me but I can't bring them to the front of my brain just yet and I shortly have to go to the airport.

 

But I want to revisit this. Can you drop me a PM?

 

Cheers

 

Westy

[chorlton1]

OK - have PM'd you to remind you to PM me when you remember what it was you forgot when you read my post!

[Mindzai]

Appreciate your comments but I am not "making up" my rate of interest!

 

My Premier Card rate, when I was late paying was at 42.7% APR - there was no separate penalty charge. My Barclaycard rate, when I was in default, was at 27.9% APR, plus a penalty charge of £20/month.

 

My argument is:

 

1) Barclaycard issue both cards

2) Barclaycard borrow money, internally or externally, at the same rate regardless of which card they are supporting - the rate of borrowing for them is therefore the same for Barclaycard and Barclays Premier

3) They say they need to charge a penalty fee if somebody defaults - this is the essence of every thread in this website!!

4) If 3 is true, and they maintain it is thousands of times a month when we make claims against credit cards, then the same MUST be true for other instruments of borrowing e.g. a charge card in default.

5) If 3 and 4 are true then the 3% interest on the charge card MUST contain an element of penalty charge, and that is what I am claiming for.

(and I am basing my claim on the difference between the charge they applied to me on the 2 cards they have issued based on 2 above eg. interest at 27.9% is a fair rate for borrowing, but anything above that on the charge card can only be a penalty)

6) If they say there is no penalty on a charge card, they cannot justify no penalty on any credit card they issue

7) Whatever they say, they will be subject to disclosure of their fee structure to either rebutt my argument or make an argument for themselves.

 

 

What rate are you actually charging them? If it isn't either 27.9% or 42.7%, it isn't contractual interest and you will have a hard time arguing it in front of a judge. If it is one of those rates then I must have misunderstood you, sorry

[chorlton1]

As I said in 5) above, I am claiming the monetary difference between the application of thgeir barclaycard rate and their barclaycard premier card rate, as somewhere in the difference has to be an element of penalty.

[Boba Fett]

Hi All,

 

Just a quick message, as I know there are mixed opinions and ideas in here, but I have made up my mind to go for Compounded Contractual Interest.

 

I am pretty good with Excel, and have found the short formula for working out the compound interest. I know there are existing spreadsheets, but the following is for reference.

 

Ct = C x ( (1 + Rd) ^ D )

 

Where:-

Ct = Charge Total,

C = Initial Charge,

Rd =Daily Rate,

D = No Days Open

^ = 'to the power of' function on your calc.

 

So... If the initial charge was £30, taken on the 1st Jan 2007, D becomes 35 days. The unauthorised overdraft rate for Barclays is 27.5% EAR. This divided by 365 = Rd = 0.075%.

 

So the formula becomes: £30 x ( ( 1 + 0.075%) ^ 35 ) = £30.80.

 

If the charge was taken on 05/02/2001 (6 years ago today); D = 2919 days.

 

So: £30 x ( ( 1 + 0.075% ) ^ 2919 ) = £156.23

 

As you can see compound interest increases the value of a 6 year old charge by over 5 times!!!

 

So you can see why it makes sense to make that extra claim! :D

 

Also, I noticed a paragraph on the NI courts website about small claims which states that a standard rate of 8% may be claimed, unless another rate of interest applies.

 

At present, interest is calculated at 8% per year. This rate is used unless the claim arises from a contract which specified an alternative rate. You must enter an amount within the interest field and then detail the interest amount, rate and period within the claim description field.

http://www.courtsni.gov.uk/NR/rdonlyres/83F481EB-19FD-46C3-8482-03123DA3D2BD/0/SCOL_guide.doc

(page 11)

 

As such, in court, you can prove the banks EAR and use the same rate (Reciprical agreements and all that jargon.)

 

Anyways, just my two-pence worth, I am still waiting for my statements to come though

 

Cheers & good luck!

 

Boba Fett 8-)

[ladybird17]

when I see what is written above - is it no wonder that people don't claim for contractual? I thought this site was for mutual support, and making things seem less daunting and intimidating so that everyone could have a fair & equal stab at claiming. If I was very new, and saw that, I'd give up RIGHT NOW!!

[Guest Battleaxe]

Imagine what it must have been like for Banfodder and Dave whden they made their first claims all that time ago. Now we are discussing contractual interest rates, mutuality and reproicity (sic), should I be discussing it, if I can't spell it?

 

Any newbie will soon catch on.

[DollyDayDream]

But aren't we glad they did?!!

Dolly Day Dream.

[Boba Fett]

when I see what is written above - is it no wonder that people don't claim for contractual? I thought this site was for mutual support, and making things seem less daunting and intimidating so that everyone could have a fair & equal stab at claiming. If I was very new, and saw that, I'd give up RIGHT NOW!!

 

Ladybird, didn't plan to confuse anyone - sorry if I have! If the above is too complex, then the speadsheets are brilliant.

 

All I wanted to do was show HOW the interest is worked out, so that if you want to work out your own speadheet (like I did) you know the formula.

 

Imagine what it must have been like for Banfodder and Dave whden they made their first claims all that time ago. Now we are discussing contractual interest rates, mutuality and reproicity (sic), should I be discussing it, if I can't spell it?

 

Any newbie will soon catch on.

 

You are right! I bet the first people that claimed were happy to get any money and not to have gone to court! However, those early birds have empowered us to fight more aggressively, and stick it to the banks!

 

p.s. I AM a newbie! Just waiting for my statements following S.A.R - (Subject Access Request).

 

Boba Fett

[ladybird17]

I'm sure someone will come along and agree or disagree with you!

What I'm saying is that many, many of the people on here are having a tough time with the spreads and understanding the implications of adding contractual or statutory interest. etc. I'm having a nightmare with the spreads - mostly getting them to work, but when I do, I have little experience of using them. When people think they have to do the sort of calculations and use formulae etc as you suggested above, I can imagine their motivation dropping to almost zero. Mine did!

[Mindzai]

As I said in 5) above, I am claiming the monetary difference between the application of thgeir barclaycard rate and their barclaycard premier card rate, as somewhere in the difference has to be an element of penalty.

 

Then you are not charging them contractual interest, and they could easily pick this apart. To claim contractual interest, you must be using a rate that is explicityly stated in the contract. As soon as you start calculating your own rates, regardless of the fact that this may seem a fairer way to do it, you are not basing your claim on a contractual term and so it is not contractual interest.

 

I would recommend you reconsider this approach and just charge them a set rate as outline in their terms.

[tim2718281]

The unauthorised overdraft rate for Barclays is 27.5% EAR. This divided by 365 = Rd = 0.075%.

 

No, that's not how you calculate the daily rate from the annual rate.

 

The correct figure is 1.275^(1/365) ... that is, the 365th root of 1.275. (So that works out to 0.066% rather than 0.075%)

 

Can I suggest that anyone working out their own formulas and spreadsheets test them using figures for which they know the results?

 

For example, at a yearly interest rate of 10%, the interest for one year on £100 is £10, and the interest for two years is £21.

 

If the spreadsheet, calculator, etc does not give those results, then it is demonstrably wrong.

 

Tim

[TideTurner]

Although it's good to have the spreads picked to pieces looking for holes every now and again, the easier you make things for people the more likely people won't give up on the interest and get what they're entitled to.

 

Also, this site provides a service to those with a complete spectrum in terms of IT skills - the easier the better, and make them availabe for all. Too much information can only add confusion, maybe any queries with the spreads should be argued out with the original developers, together with any constructive ideas.

[bill-k]

Yes, it should at the very least be made clearer to people that the spreadsheet is actually just a program that works all this stuff out for us in the background. It looks scary at first, but is not really, once we know how little we have to do for it, but how much it will do for us - automatically.

 

"Ask not what your spready can do for you - it will just do it anyway !!"

[TideTurner]

One of your grandkids bill-k?

[bill-k]

One of your grandkids bill-k?

Yes - can't remember which, though. So many......

[chorlton1]

Then you are not charging them contractual interest, and they could easily pick this apart. To claim contractual interest, you must be using a rate that is explicityly stated in the contract. As soon as you start calculating your own rates, regardless of the fact that this may seem a fairer way to do it, you are not basing your claim on a contractual term and so it is not contractual interest.

 

I would recommend you reconsider this approach and just charge them a set rate as outline in their terms.

 

 

 

Sorry, should have made myself clearer - As you say, I am definitely not claiming for contractual interest - I know that and am completely comfortable with that and it has never been my intention (and its also a complete possibility on a charge card as there is zero interest, other than when its applied as a penalty) - I just posted in this part of the forum a few days ago to get Glenn and Bill's attention to something and then started getting replies to my post and it all got rather lost in translation!

 

Will go back to my previous forum, so as not to confuse you more!!!

[redsonja]

just had loads of emails saying a new linkback has been recorded for this thread. Excuse my ignorance but what does that mean?

[neilvw]

Redsonja - same here, just got loads of emails too. Apparently...

 

"LinkBacks are links from elsewhere that reference a forum discussion. These links are registered in our forums in three different ways: Pingbacks, Trackbacks or Refbacks. To learn more about this feature, please visit this page:

http://www.consumeractiongroup.co.uk/forum/misc.php?do=linkbacks

"

 

Cheers

 

Neily

[TideTurner]

and its also a complete possibility on a charge card as there is zero interest, other than when its applied as a penalty

 

Chorlton, this will then become the unauthorised rate, so whatever was agreed in the original contract will not apply, unless they state that the unauthorised rate will be variable. In terms of marketing, the banks tend to hide this part of the contract, as it won't attract clients.

 

Hmmmm, moving on to S32 concealement...

[bigmama59]

just had loads of emails saying a new linkback has been recorded for this thread. Excuse my ignorance but what does that mean?

 

 

I got loads of emails too about different threads, it just leads back to the first page.

[newbody]

found this on the OFT site Draft guidance on unfair relationships and thought it might be of help in proving unfair contract in the right to claim contractural compound back

Draft guidance on unfair relationships

 

 

29 June 2006

The Consumer Credit Act 2006 introduces the new concept of an unfair relationship. This means that a borrower can challenge a credit agreement in court on the grounds that the relationship between the lender and the borrower in connection with the agreement is unfair to the borrower.

 

Unfair relationships and the circumstances that give rise to them also fall to be dealt with using enforcement powers under Part 8 of the Enterprise Act 2002. These powers cover situations in which businesses infringe their legal obligations and as a result harm the collective interests of consumers.

The 2006 Act requires the Office of Fair Trading to publish guidance indicating how it expects the unfair relationships provisions to interact with Part 8. This is intended principally as advice and information for businesses, their legal advisers or representatives, and consumer organisations.

We are publishing this guidance in draft form, to invite comments from stakeholders and other interested persons. The guidance will be finalised in the light of such comments and discussions with other enforcers. We aim to publish final guidance by 31 December 2006.

Download Unfair relationships: draft guidance - consultation document (pdf 204 kb)