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

[lucid]

Hi cala,

 

You can use an N1 and post it to the local court. It certainly gives you more freedom in your Particulars of Claim.

 

Lucid

[natwesttookmymoney]

Lucid

 

We agree!

 

Unequivocally!

 

Caz, I'm not an MCOL expert but I believe that, when the defence ('failed to properly particularise the claim') arrives, you can reply with fuller POCs.

 

But I agree with Lucid - if you can't get to court yourself, print off a PDF of the N1 and post it.

 

Westy

[sarahpp]

Cala - If it helps, I did exactly what Westy and Lucid suggest and filled in an N1 (in the template section) on the computer, printed it off and sent it registered through the post. I have sent off three like that so far (litigious little so and so that I am!) and have had no problems to date.

[Guest peed orf]

Thanks Westy.

 

Hi, Peed 'orf,

Though I know you've been down this road before!!

 

Started this claim with HSBC back in September, but lack of money stopped me in my tracks. Nat West paid up (8%) so now I can kick ass!

Checked various threads to refresh myself, and found it's become a wars zone!!

This claim is just £277 but as they've ignored me the interest is £1000 approx.

I do have another (much bigger) with HSBC that I shall use 29.9% in the hope that it will frighten them into paying up before I need to file a claim.

[Pen]

Hi, why do we have to change the names for the interest. I don't wish to sound rude but it would seem that about 5 or 6 members are getting in to a huff over how to describe it, therefor the name must be changed. I am just begining to understand CI, I am sure there must be hundreds who are happy with what it is called at the moment why confuse the situation further debited Interest where has that come from? is this another interest we should be adding on top of what we are already claiming.

 

I don't wish to cause offence this is not my intention but on the same lines I don't wish to be confused more then I am already.

 

Pen

[Glenn UK]

Pen et al

 

It matters not whether it is one person or hundreds who are confused, no one is forcing anyone to change what they call the various aspects of interest, but make no mistkae there is confusion.

 

I often have to clarify what the people i am conversing with mean when they say x, y or z. This can only be because there is some confusion.

 

IMHO Westy had a view that there is confusion about interest and whilst i dont agree with everyhitng he says, he is right, there is some confusion.

 

If chanignn the way the various aspects of interest are described by me helps someone undertsand what im talking about thats good.

 

It cant be any worse than it is now.

 

JMHO

 

GLenn

[taylormandy]

Well I was told the argument for claiming unauthorised contractual rate was a load of [edit] last night in the chat room. This has really done my confidence a great deal of good seeing as I have to go to court in 3 days time. I know it is untested. I know many people have different theories about it. I have read and read and read and thought I had got my rationale sorted based on Unfair Contract Terms etc, discussing equity, fairness and balance etc.

I am not greedy.

I only ever wanted my charges back, but the spirit of the first post in this thread, and the new way of looking at interest thread state quite clearly it was thought to be a reasonable approach. I was also encouraged by PM to think about going for contractual interest by a senior member.

 

I really don't want to add to the ever decreasing circle of the contractual interest debate, but, if it now seems that CI is seen to be greedy and unreasonable by judges, which is the impression I was given last night, then perhaps this should be made clear.

 

I really wish I had not gone down this route, but it is too late now.

[Glenn UK]

1st off Taylormandy who says judges see it as greedy?

 

The only reason they would see it as greedy is if there was no logic to your arguments from a legal viewpoint.

 

The judge at my AQ hearing though my arguments were logical and common sense, although he didn't feel he would be able to award the contractual rate.

 

As it happens my problem wasn't that he didn't think it was greedy but that because i had concentrated on other issues (Limitations Act/Doctrine of laches) i didn't have myself prepared to put arguments before him to convince him of the reasons why he should consider awarding contractual interest.

 

I wont make the same mistake again and perhaps, if i meet the same judge for my next claims, i might be able to convince him that he should award more than the stat and compound it as well.

 

The only thing i would say to you is that if/when it gets round to discussing interest, you need to make it clear that you are seeking interest based on the contractual provision and it is that which forces you to select the rates you do, you are however, prepared to take the courts direction on that matter.

 

One of the problems is that IMHO there is only one logical rate to charge for interest unlawfully taken, unauthorised. It is not our fault that the contract allows the defendant to levy such a punitive charge.

 

Anyway, hope it all goes well.

 

As for the logic being bollocks, seems to me that there will always be disputes over what can and cant be claimed, however, if you have prepared yourself well and understand the potential pitfalls then i don't see it as being greedy and i don't think if presented half reasonably the court will either.

 

Finally if the interest rate we are forced to select makes us greedy then it might be worth asking the court if they think the rate itself is punitive and forms part of the penalty charges (i cant see how it doesn't personally).

 

 

 

HTH

 

Glenn

[taylormandy]

Glenn, thank you for your rapid response.

I am just getting a bit twitchy now!

 

I have read endlessly for months now, as I also have the limitation act to argue against, although I feel reasonably confident about this, having followed yours and others responses in other threads and of course doing my own research.

 

I perhaps have got to the point where I have read so much and tried to absorb so much new information that my confidence is being eroded with so many different arguments and counterarguments.

 

Thanks again.

[Guest Battleaxe]

taylormandy,

 

Just take a deep breath and step back from all the arguments. Take this time to re-read your arguments, get the CI argument straight in your head and forget about everything people are saying. You have to make the Judge see there is strength in your argument and be prepared to to accept what the court directs. Glenn UK has posted some good advice.

IMHO I don't think CI is greedy, after all it is the CI which the banks have charged us, that has garnered their wealth. Now it is your turn to try and get some of it back from them.

[taylormandy]

Thanks to you both. The thought of court terrifies me.

 

I will do as you say - step back, get my thoughts straight and go for it!

[photoman]

From Yesterdays evening Standard:

Posted annual profits of the Banks foe 2006:

HSBC £12bn

RBS £9.41bn

Barclays £7.14bn

HBoS £5.54bn

Lloyds TSB £4.28bn

Northeren Rock £627m

A&L £569m

B&B £336m

 

How much of that money was made from investing, re-investing, loaning and reloaning out money that was unlawfully taken in the first place ?

How much interest does the average current account earn, in return for providing them with the funds to invest and loan out at rates between 15% and 29% ? Practically zero !

So who's being greedy, us or them ?

How long can this abuse go on ?

[hagenuk]

Well I was told the argument for claiming unauthorised contractual rate was a load of bo**ocks last night in the chat room. This has really done my confidence a great deal of good seeing as I have to go to court in 3 days time. I know it is untested. I know many people have different theories about it. I have read and read and read and thought I had got my rationale sorted based on Unfair Contract Terms etc, discussing equity, fairness and balance etc.

I am not greedy.

I only ever wanted my charges back, but the spirit of the first post in this thread, and the new way of looking at interest thread state quite clearly it was thought to be a reasonable approach. I was also encouraged by PM to think about going for contractual interest by a senior member.

 

I really don't want to add to the ever decreasing circle of the contractual interest debate, but, if it now seems that CI is seen to be greedy and unreasonable by judges, which is the impression I was given last night, then perhaps this should be made clear.

 

I really wish I had not gone down this route, but it is too late now.

 

 

 

The comment that the argument was bo**ocks was a tongue-in-cheek misquote of the discussion between Captain Blackadder and Private Baldrick regarding the reason for the start of the First World War.

 

Captain Blackadder: "Yes, that's right. You see, there was a tiny flaw in the plan."

Private Baldrick: "What was that, sir?"

Captain Blackadder: "It was bo**ocks."

Having said that, it is well known that I do not agree with claimants attempting to justify almost six times the Bank of England base rate for charges claims on current bank accounts. I cannot see how it fits with the law regarding restitution and undue enrichment. Not only that, what of clean hands? We are relying here on a breach of contract, our breach in fact in order to seek a remedy. Somewhat at odds with equity I think.

 

I understand the principle upon which these claims are made and the reason for statutory interest existing and therefore the logic behind making a contractual compound interest claim. However, making claims for punishingly high rates of interest will not endear us to the Judiciary or further our cause.

 

I had cause to telephone a County Court recently and in the course the conversation I was told of many cases where claims for bank charges were rejected and the claimants contacted in order to amend their claims as the interest rates claimed were far higher than the statutory figure according to the County Courts Act 1984.

 

The Court is aware of the fact that some claimants are attempting to claim far higher rates of interest than is allowed under the County Courts Act 1984 and that no judges at that court have allowed a single one, although some cases have gone to a directions hearing, the judges have not allowed the high rate of interest and awarded statutory interest only.

 

The lady I spoke to is of the opinion and her judges have confirmed to her, that they would not allow a claimant to claim rates of interest that exceed the 8% allowed by statute.

 

I was told that these claimants were entering "punitive rates of interest" and that the Judges would not allow it.

 

We are claiming that we have been subjected to an unfair penalty for a breach of contract, our breach in fact, which resulted in the bank levying a charge. It has been ruled that charges that exceed what is reasonable are penalties.

 

Lord Dunedin laid down rules which are still applied today in these types of cases:

 

i) The sum is a penalty if it is greater than the greatest loss which could be suffered from the breach – in other words, if it is "extravagant and unconscionable".

 

ii) If it agreed that a larger sum shall be payable in default of paying a smaller sum, this is a penalty. Ford Motor Co. v. Armstrong (1915)

 

CPR 16.3 and 16.4 covers interest and the claiming of it and of course we are entitled to claim interest at any rate, but the claim must have some basis. In order to claim interest at 29.9% we must be able to show that we have lost 29.9% return on the money.

 

Many companies have cash reserves that they put to work and earning interest is one way they do this. Most people however, do not and so to my mind there is simply no basis for claiming the unauthorised rate. Certainly one cannot claim to have "lost" it, as one would never have had the ability to earn that level of interest in the first place, never mind lose it. Westdeutsche v Islington BC [1996] A.C. 669, [1996] 2 All E.R. 961 states there was no basis for compound interest under unjust enrichment.

 

Furthermore you may have difficulty arguing that the bank lent all your money at the unauthorised rate and even if you could you would have difficulty convincing a judge that compound contractual interest was available at all under unjust enrichment given the fact that there is a House of Lords precedent stating its not available.

 

It is simply not credible to assume that, had the bank not taken a sum in charges, we would have been able to earn 29.9% (or higher) interest on it and therefore we are entitled to claim that back on the whole sum for the entire period we are claiming for.

 

There is no legal basis for the “mutuality and reciprocity” argument. It is my opinion that the banks taking these charges and charging this interest rate cannot be interpreted as us lending them money.

 

Mutuality of contract is the reciprocal understanding or agreement between parties that is a requirement in the creation of a legally enforceable contract. It means that an obligation must rest on each party to do or permit to be done something in consideration of the act or promise of the other. Neither party is bound unless both are bound. It does not mean that you are entitled to charge the other party just because they are able to charge you.

 

In Bank contracts, the Bank has a right to impose interest at the unauthorised rate. This is what we agree to when we enter into the contract. There is no right in the contract for us to receive interest at anything other than the published rate on credit balances. Any right to interest must be found under the common law.

 

The statutory rate of interest at 8% is generous given the current savings rates today and unless charges were central to the issue of the claim then I would not entertain making a claim for almost 30% interest.

 

Contractual interest claims have been successful but not because the argument is strong, it is because the banks have paid without contesting the claim.

[Glenn UK]

Hagen

 

a well though out answer and of course a point of view, it is useful to have those against the viewpoint to comment as well as those for, some of what you say i agree with some i don't.

 

There is no doubt that whether you are for or against the application of contractual interest that its contentious.

 

i have said a number of times that the i would be surprised if a court, even where we were able to convince them that the principle was right, would in fact award the contractual rates, particularly for excess overdraft.

 

However, what is clear to me is that when we took out a bank account we never expected the bank to take money unlawfully from our accounts.

 

There is no term in the t&c which deals with this premise directly however, there is clearly a provision which allows the bank to charge us for doing this to them. Arguably what we do when we remove money from the bank without prior authorisation though its a lot different, the banks in effect support it by not refusing the facility which is entirely within their power but thats an aside.

 

It seems to me that the UTCCR provides relief that for a contract to be fair it should work both ways, if the consumer had expected the bank to take money without authorisation would it have been fair for them to charge the same rates that the bank charges?

 

One could argue the costs to the bank, credit licenses etc, but IMHO there is no significant loss incurred by the bank which would justify the imposition of interest at those rates, it is a for profit charge and no more in the same way that the charges themselves are primarily for the generation of profit.

 

I cannot see any real logic in allowing the bank to impose such interest rates and yet not allowing the consumer to claim them too.

 

i can see an argument for not allowing either party to claim such rates though.

 

As for the law not allowing compound interest to be awarded, I don't have the details to hand but I'm pretty sure that as with most things there are cases where the courts have moved towards this position.

 

In terms of unjust enrichment/disgorgement it wouldn't be unreasonable for some consideration of the banks profits made using this money and for them to return some or all of that profit to the person the money rightly belongs to. To not do so leaves the bank unjustly enriched.

 

Arguably if you are arguing unjust enrichment then the application of such interest rates would unjustly enrich the claimant, however, if the term allowing the banks to charge such rates is fair, then IMHO this is no bar to paying the claimant such rates.

 

Re the courts not having allowed such a rate so far, one presumes that if a contract explicitly allowed such a rate then the court would support it?

 

It would be likely that in the case of a default by a consumer that the support for such interest already applied to a debt would be upheld? I am presuming of course i could be entirely wrong.

 

The point is not that they wont award such interest, but maybe, just maybe that the right case hasn't been presented?

 

JMHO

 

Glenn

[natwesttookmymoney]

Hagenuk

 

Great post, well argued.

 

I would have loved to have seen it sooner - it is a very important and strong contribution.

[bill-k]

Well I was told the argument for claiming unauthorised contractual rate was a load of [edit] last night in the chat room. This has really done my confidence a great deal of good seeing as I have to go to court in 3 days time.

 

Taylormandy - I would dearly love to tell you not to let what you're told in the chatroom influence your decision, as it could be [edit], but I cannot. What you're told in the chatroom is NOT [edit] - it's official:

 

http://www.consumeractiongroup.co.uk/forum/post-560505.html

 

You are expected to check the credentials of Blackadder & Baldrick before taking their opinions seriously. Did you ? does anybody ?

 

FWIW, I agree that the plan was flawed because it's [edit].

 

But then, that's JMVHO, as I'm just a turnip !!

[natwesttookmymoney]

:D:D

[tim2718281]

In order to claim interest at 29.9% we must be able to show that we have lost 29.9% return on the money.

 

I disagree; I think it would be sufficient to show we paid 29.9% interest on loans whose amounts we could have reduced had the bank not taken the penalties.

 

Tim

[tim2718281]

In Bank contracts, the Bank has a right to impose interest at the unauthorised rate. This is what we agree to when we enter into the contract. There is no right in the contract for us to receive interest at anything other than the published rate on credit balances. Any right to interest must be found under the common law.

 

I disagree. I read very carefully the Ts & Cs of one forum member's bank account, and there was nothing in the term about interest on unauthorised withdrawals that meant the bank was not liable for it.

 

Of course, there was nothing in the Ts&Cs that said the bank *was* liable for it, either. But that simply means there's an argument about the meaning of the Ts&Cs; and if the bank and customer cannot agree, the court will have to decide what the Ts&Cs mean.

 

As for your comment about courts striking out claims for contractual interest: I don't see how they can do that without first seeing evidence of what the contract says and hearing arguments about what it means.

 

As for your comment about the reasonableness or otherwise of the rate claimed: again, surely this is something only a court can decide after hearing argument on both sides. If the court decides the Ts&Cs do mean the claimant can claim interest at the bank's rate, and if that rate is 29%, it's up to the bank to persuade the court that its own published rate of interest is unreasonable ... an argument I'd pay money to see in court!

 

Tim

[hagenuk]

I disagree; I think it would be sufficient to show we paid 29.9% interest on loans whose amounts we could have reduced had the bank not taken the penalties.

 

Tim

 

This reply confuses me. As compound interest is not available as a remedy for unjust enrichment, given the fact that there is a House of Lords precedent stating it is not available, you would have to prove loss in order to claim this rate.

 

In these claims, as with most cases, the burden of proving any given claim rests with the claimant, he who asserts must prove.

 

For example, a charge of £25 levied this day six years ago, at a rate of 29.9% compounded would result in a claim today of £150.35.

 

How do you prove this is your loss when in fact, you probably paid the unauthorised rate on that £25 for a good deal less than six years?

[TideTurner]

To quote Newton 'Action and reaction are equal and opposite'. Where a term within a contract benefits one of the parties, the same benefit must be allowed to the other. Therefore, where compound interest has been applied to unauthorised debits by one party, the same rights to apply such extends to all parties.

 

I have been refused details of the rates of interest applied to my account, and the methods used to apply such interest. Not only is this concealment (amongst other things) S32. LA, but I intend to make the Court aware of the fact that the dispute could have been resolved a lot earlier, should they have provided this information.

 

Where they blatantly refuse to provide the interest details, on the grounds that it's 'commercially sensitive' or other reason, surely they cannot offer a defence to any interest claims against them. They have denied you the ability to get to the root of the charges.

 

If they refuse information as to how they arrived at their charges and are surrepticious as to interest applied, then why would they have a right to ask you to justify your charges?

 

Tide

[hagenuk]

I disagree. I read very carefully the Ts & Cs of one forum member's bank account, and there was nothing in the term about interest on unauthorised withdrawals that meant the bank was not liable for it.

 

Of course, there was nothing in the Ts&Cs that said the bank *was* liable for it, either. But that simply means there's an argument about the meaning of the Ts&Cs; and if the bank and customer cannot agree, the court will have to decide what the Ts&Cs mean.

 

As for your comment about courts striking out claims for contractual interest: I don't see how they can do that without first seeing evidence of what the contract says and hearing arguments about what it means.

 

As for your comment about the reasonableness or otherwise of the rate claimed: again, surely this is something only a court can decide after hearing argument on both sides. If the court decides the Ts&Cs do mean the claimant can claim interest at the bank's rate, and if that rate is 29%, it's up to the bank to persuade the court that its own published rate of interest is unreasonable ... an argument I'd pay money to see in court!

 

Tim

 

Please explain the first two paragraphs, what is this mention of liability?

 

There is no comment from me regarding courts striking out claims, merely that the claimants were contacted regarding the level of interest claimed as the Judges at this court would not allow, in their words "punitive rates of interest."

[natwesttookmymoney]

I have to contribute, though I said I wouldn't.

 

The banks do say, in their T&Cs - which refer us to their current terms for lending - that unauthorised borrowing will be charged at their unauthorised rate - say, 29.5%. The T&Cs do not say, anywhere, that they will pay 29.5% on deposits.

 

I am firmly of the belief that we can claim back our demonstrable loss, which is the charges PLUS any interest charged thereon. I further believe, very firmly, that we can seek recompense for denial of benefit - the further, unquantified loss we have suffered as a result of being unlawfully relieved of our money, through charges.

 

I am of the opinion (having benefited in exactly this way) that there is a very strong case to be made for reclaim of charges, plus interest debited - our demonstrable loss - plus a rate for denial of benefit. That is what the 8% statutory is there for. That's the rate you would get if your claim as for dodgy work done by a garage mechanic, for payment of services that were not delivered, for goods that didn't arrive or were unfit for purpose, and for bank charges.

 

I have asked before: where could you have put money on deposit and got 29.5% interest on it?

 

I have also said before: the civil courts are in the business of returning parties to the position they would have been in had the unlawful act not occurred - status quo ante is the term. They are not in the business of punishment of wrongdoers, nor in the business of allowing the wronged party to 'get their own back' - to exercise excess rectification.

 

We all feel very strongly about the way we have been ripped off and mistreated by the banks over these far too many years. We are angry, yes, but anger is no justification in law for excess. In fact, the reverse is the case: the courts are there to take a dispassionate, disinterested view, to exercise judgement uninfluenced by personal hurt or feelings of wrong.

 

I believe that charges, plus interest debited, plus statutory interest will win, probably every time. I also believe that, as an alternative, it is very possible to make out a strong case for charges plus 'unauthorised' interest but no statutory. That would cover demonstrable loss (charges plus interest debited) plus recompense for denial of benefit - and probably un

just enrichment, too.

 

I am with Hagenuk:

 

"In Bank contracts, the Bank has a right to impose interest at the unauthorised rate. This is what we agree to when we enter into the contract. There is no right in the contract for us to receive interest at anything other than the published rate on credit balances. Any right to interest must be found under the common law.

 

The statutory rate of interest at 8% is generous given the current savings rates today and unless charges were central to the issue of the claim then I would not entertain making a claim for almost 30% interest.

 

Contractual interest claims have been successful but not because the argument is strong, it is because the banks have paid without contesting the claim."

 

And

 

"For example, a charge of £25 levied this day six years ago, at a rate of 29.9% compounded would result in a claim today of £150.35.

 

How do you prove this is your loss when in fact, you probably paid the unauthorised rate on that £25 for a good deal less than six years?"

 

And pretty much all the rest of it, too. I don't believe that, if 'large interest' claims got in front of a judge, the claimant for bank charges would win the full, added CI claim. As Hagenuk says, the law isn't there to support it. We're getting reactions from judges indicating that 'punitive levels of interest' would not be allowed - and it doesn't matter how angry one gets, how much one believes the banks deserve a good kicking (and, as a long-time and barely-reconstructed left-winger, I believe the banks deserve a thoroughly good kicking and them some dancing on their remains).

 

I've asked for examples of substantial claims - over £2K - which have won with added CI. £2K is an arbitrary figure and I have, in the past, won an employment claim for £2600 on 'nuisance value'. I'll be a nuisance for £2600 a pop but there is a point where defending a smallish claim is uneconomic. The level may change but, so far, no-one has told me of a plus-£2K case, with added CI, which has won.

 

(Pace Lucid/Mindzai - I think your settlement included a non-charge element, i.e. costs. Correct me if I'm wrong.)

 

Sticking to what is winnable is better advice, especially for newcomers, than seeing how big we can make the numbers. We're dealing with the Law here, and the Law will only return us to status quo ante.

 

JMHO

[lucid]

 

(Pace Lucid/Mindzai - I think your settlement included a non-charge element, i.e. costs. Correct me if I'm wrong.)

 

Hi Westy,

 

Our settlements consisted of:

 

Charges

Overdraft interest (interest paid on penalties)

Contractual interest on the total at unauthorised borrowing rate

Extremely minimal letter writing costs (£18 on one claim, and £6 on the other two)

Court costs

 

So the tiny amounts in leter writing costs we added on barely affected our total claims.

 

Also I think you were under the impression on another thread that our claims lasted for a year but this is not the case. We sent all of our prelims in August and kept to the correct timeline, our court hearing was 7th February and it was finally settled in full on 6th February. The reason I'm pointing it out is you thought that the length of our claims (when you were under the impression they had lasted so long) may have helped us to get the CI? That's how I interpreted it anyway.

 

Lucid

[tim2718281]

This reply confuses me. As compound interest is not available as a remedy for unjust enrichment, given the fact that there is a House of Lords precedent stating it is not available, you would have to prove loss in order to claim this rate.

 

In these claims, as with most cases, the burden of proving any given claim rests with the claimant, he who asserts must prove.

 

For example, a charge of £25 levied this day six years ago, at a rate of 29.9% compounded would result in a claim today of £150.35.

 

How do you prove this is your loss when in fact, you probably paid the unauthorised rate on that £25 for a good deal less than six years?

 

I would not make a claim of compensation for "unjust enrichment".

 

I would claim on the basis that the contract entitles me to claim interest; and I would claim in the alternative that I am enttled to compensation for the loss of amenity caused me by the bank's unlawfully taking my money.

 

1) The contract and associated Ts&Cs state that interest is payable on unauthorised withdrawals, and state the rate of interest. I would put it to the court that the bank's unlawful withdrawals are unauthorised, and therefore ask the court to award interest at the rate stated in the Ts&Cs.

 

The court would have to decide whether the wording of the Ts&Cs about interest applies to withdrawals by the bank as well as withdrawals by the customer. As I said, for the account I looked at, there was nothing in the Ts&Cs to exclude withdrawals by the bank from attracting interest at the bank's stated rates. So I think it's possible a court might decide that contractual interst is payable to the claimant

 

2) Alternatively, the bank, by making an unlawful withdrawal from my account, has deprived me of the use of my money. This means I have suffered a loss of amenity - there are things I have been unable to do because I did not have the money the bank had taken. I think I could easily demonstrate a loss of amenity ... citing, for example, occasions when I did not go down the pub because I was skint. To quantify the value of the loss of amenity is difficult; I would put it to the court that a reasonable way to quantiy if to to calculate how much it would have cost me to borrow from the bank the amounts it had unlawfully taken from me, thus enabling me to avoid the loss of amenity at the expense of the interest.

 

Note however that I feel one can reasonably claim this interest or compensation only for amounts *in credit* - and I believe the same applies to the 8% statutory interest.

 

Take an account which had zero in it, since when the customer has made no transactions, and since when the banks applied charges and interest to date totalling £500. I think if the bank repays the £500, bringing the balance back to zero, that is adequate. I really do not see any valid basis for claiming even the statutory 8% simple interest, let along higher rates and compound interest. The bank has not taken any of the customer's money, so why should it have to pay *any* interest?

 

On the other hand, if the bank is still charging 29% interest from the date of the court case till judgement, then awarding 8% interest will still leave the claimant owing the bank money - which they would have to commence another court case to recover.

 

So I also disagree that statutory interest is adequate compensation.

 

*I* think the bank should:

 

1) refund the charges

2) refund any bank interest on the charges up till the date of repayment

3) compensate the claimant for any reduction in their credit balance caused by the charges and associated interst.

 

Compensation for 3 may be on the basis of loss of amenity, contractual interest, or statutory interest, whichever the claimant can persuade the court to award.

 

Tim