Taz11 v MBNA Enforceable ??

[Taz11]

Thank you Pelham, I am certainly not in a hurry...lol. As of yet I've had no letter of reply, but had 3-4 unkown calls on my mobile, 3-4 messages from Moneyalert (please call us), and 3-4 Personal messages (not automated I mean) from MBNA asking me to contact them, so a few cogs must be whirring somewhere...

 

I'll keep you posted on anything received and will upload the T&C's as .pdfs as you've requested.

 

thanks again

 

Taz11

[citizenB]

Yep, definitely let them WRITE to you. I suspect your letter put the cat among the pigeons

 

Whether or not you speak to them on the phone (and I hope you do not), still keep a record of the date and time they call. If they leave voicemail messages, keep a record of those as well. Even if they just say phone Joe Bloggs on xxxxxxxx.

 

If the calls become too troublesome and it isnt too much of a hassle, consider changing your telephone number.

[Taz11]

thanks cb, no its ok, I'm quite happy to let them witter away to a silent phone line...lol. Don't worry I have NO intention of speaking to them on the phone. WRITING !!! , and thats it, nothing else

 

 

regards

Taz11

[Taz11]

Hi Pelham9,

 

Here are the t&c's as you requested in .pdf format.

 

Page 1 is actually backed up with the covering letter I received....dear mr .... blah blah blah

 

page 2 and page 3 back up each other and page 4 is on its own entirely.

current t&c page 1.pdf

current t&c page 2.pdf

current t&c page 3.pdf

current t&c page 4.pdf

[pelham9]

Well once again no date.

 

It is clearly later because

 

a) the interest rates are very hugh

 

b) The penalty chages are £12 which makes it post the OFT announcement on credit card charge penalties. Probaby their most recent Ts & Cs .

 

Curious that the standard rate is equal to the APR. This suggests they are playing the APR [problem].

 

It doesn't help you because these TS & Cs are nothing to do with the agreemment. It would be interesting to ask them what monthly rate they are charging. Forestall any nonsense about daily rates by asking what daily rate they are applying.

 

I wonder why they sent them.

Edited February 2, 2009 by pelham9
Word inserted to avoid confusion

[Taz11]

Thank you Pelham, so to summarise, where does it leave me??. The t&c's I just posted are not relevant to the agreement whatsoever. The only defence at present is that that the "original" (their words not mine) t&c's posted earlier cannot be associated/proven to be related to the "application form" and I can't show/prove that the first interest charged on purchases was correct as I'm unable to show the first statements and they haven't supplied them.

 

thanks very much again Pelham, for keeping in touch with this thread and advising accordingly. scales tipped

 

regards

 

Taz11

[citizenB]

Typical MBNA/Capital one tactics. They just confuse the issues. Very frustrating.

[Taz11]

Hi ya CB There must be some activity, I was phoned 4 times in about 5 mins on the landline, then 3 more times on the mobile immediately afterwards. MBNA are the only ones with my mobile, so I know its them...lol. Probs been phoned at least 10 times within an hour. Don't think they are getting the idea that I won't be talking to them on the phone

 

I'm expecting a letter any day

 

Let the battle commence

[pelham9]

Do not dismiss those second ( we know later) Ts & Cs. They were sent in answer to your request for a CCA agreement. You can use them in a number of ways in your first main argument to cast doubt on the first Ts & Cs.

 

They also help in the second 'inaccurate' prescribed terms argument.

 

They show 34.9%APR and 34.9% p.a.but no monthly rate. That should make you sit up and think.

 

The answer is in 2a. They have had to show for some time now the cost of borrowing figure on a £1500 loan paid off over 12 equal monthly instalments. To get this figure they use the monthly rate that will apply to your agreement.

 

The monthly rate they have applied is 2.5293%and this would have been the rate used on your account.

 

For 34.9% p.a the monthly rate is 2.5261%

 

This is the APR [problem]. It certainly throws considerable doubt on the monthly rate of 1.45% in the early agreement which was too good to be true from your point of view.

[Taz11]

thanks Pelham,

 

took me a while to work out your figures using the formulas you posted earlier, but it now makes sense. Using the monthly interest rate THEY have applied to the account it works out to 34.95% and not 34.90 as stated in the terms and conditions. Am I on the right track Pelham. So in effect their terms and conditions are incorrect, they are actually charging an APR of 34.95, hence the [problem] ???

 

 

Just one question, how did you work out the actual rate they have applied i.e the 2.5293% from the figures given.

 

Found this handy little calculator taking the interest rates to 4 decimal places. Once I know how you got the 2.5293% I think I can work on it to show that there rates are incorrect. Another piece of ammo to have up my sleeve. Thanks again Pelham

Interest Rate Converter

 

 

 

 

 

Found some more info Pelham, and hopefully I'm getting the idea, please tell me if I'm on the wrong track. I used this calculator, using the second calculator

Calculator: Credit card reality check | This is Money

 

Used the £1500 as stated in their terms and conditions, applied the 34.9% interest rate as stated by them and paid back over 12 months (1year). It gave a monthly payment of £149.87 per month x 12 and that gives a total of £1798.44. This is £298.44 over and above the original borrowed amount and not the £257.87 as stated in their current t&c's. Am I on the right track Pelham??, if not I'll crawl back into my hole...lol

 

thanks again, and if this is correct I hope it helps some people.

 

regards

 

Taz11

 

 

thanks again,

 

regards

 

Taz

Edited February 3, 2009 by Taz11
Found a link to good interest calculators ;)

[citizenB]

Ooh, I hope so Taz cos I am going to give those two calculators a go with my MBNA figures

[Taz11]

Hope it works cb, I will wait until Pelham answers just to confirm I am on the right track. If its correct, could open a whole new can of worms !!!

 

Taz11

[pelham9]

they are actually charging an APR of 34.95, hence the [problem] ???

.

 

NOT APR!! I am shouting because you have fallen into the APR [problem] yourself. It is so very easy to fall into your usage above and that is what the banks want. If you need a shorthand use AAR -actual annual rate.

 

The [problem] is

 

Decide on an APR say 15.9.

 

Add 0.05% =15.95%

 

Work out the monthly rate using 15.95% annual rate (1.2408%). Do not round but truncate.

 

Use this to calculate interest.

 

Punters wiill seldom check and if we are challenged we can say well 1.2408% monthly is an %APR of 15.9 (which is totally true) so what are you compainlng about. But 1.2408% is 15.949999.....% pa and they are charging that rate. APR is that rate rounded to one decimal place.

 

Banish totally from your mind that APR is EVER the rate to be charged. It is a totally irrelevant figure when you are calcuating interest and it is not a prescribed term

 

 

The calculation for the total borrowing cost is quite complex. It is fairly easy to show that that the amount they quote as the cost of borrowing is incorrect or correct using an icorrect interest rate.

You do this by deriving the monthly rate from 34.9% using the usual compound formula. Then you do 12 separate monthly interest calculations using the monthly rate. Each month the outstaning balance is reduced by the fixed monthly payment but increased by the interest for the last month. You then add up the all the interest payments to get the cost of borrowing. I am sure there is a formula but I cannot give it to you because I prefer to use a short computer program to do it in a fraction of a second.

 

To get the actual interest rate they have charged is almost impossible longhand or by formula. This is because an iterative process is required - this is basically trial and error process. In your case I started at 2.5 and ran a program to find out whethether or not 2.5% was the right rate it wasnt so the program adds .0001 ( 2.5+.0001) etc till the correct answer is s found. This takes hendreds of calculations which the computer does in 2 to 3 seconds! It would take a week with a calculator

[Taz11]

Thanks Pelham, sorry yep fell into the trap. If it such a complex formula, how would it ever be shown/proved, if need be in court.?? other than the software you have?? I now do understand where you are coming from with regards to them hiding the fact that they are charging the extra .04999 which in effect makes the monthly interest rate technically wrong.

 

With regards to the post with the calculators above, does the second have any validity as it shows that you would indeed have to pay over and above the payment they suggest in their t&c's...........just a thought??

 

 

 

 

Just as an afterthought Pelham, using the interest rate they provide 34.9, could you work out (taking into consideration the 2.5293% you calculated they would be charging me), how much you would actually pay over 12 months for the £1500 borrowed, and see if it tallies with the amount they say it will cost. Is this possible with your software??

 

thanks

 

Taz11

Edited February 3, 2009 by Taz11

[pelham9]

Your first paragraph.

 

You are quite right that judges are likely to be lazy mathematticians. I have serious doubts if you (or even me) would be able to persuade a judge that the small error in the prescribed terms is sufficient to make the

agreement unenforceable. I think that if you can show that it is a premeditated fraud he might think differently.

 

I think your main use of all this is to tie MBNA in such knots that they begin to doubt their own figures. If they start to wonder that this might be a fraud they may well concede before going to court. I would like to see the computer program and/or the tables they use to derive monthly rates from yearly rates - that would be interesting.

 

 

 

 

Your last paragraph. I would suggest you look at post #9 in the link below below. Markhudds sets the calculation out in full and has conclusively shown that they intended to charge 1.2408% from the outset. His annual rate was 15.9% and they did not show a monthly rate of 1.2408% in the agreement only on his statements

 

 

http://www.consumeractiongroup.co.uk/forum/debt-collection-industry/180389-mbna-cca-apr-interest.html.

 

The aides linked in your post.

 

If you look at them critically you will realise that the authors do not know what an APR is. Stoozing,com invites you to put in the APR which is never the annual rate and cannot be used for calculations!. The other does not define the rate you should put in at all. They are aides only and the results are likely to be misleading. Do the math yourself if you want accuracy - it will increase your understanding. If you bother to put your figures into stoozing.com you will find they either give the right answer or nearly so. Put 15.9 into the yearly calculater and you will get 1.2732 monthly and this is correct as we know. Put 1.2408 in to the monthly calculator and you will get 19.95 which is an APR of 16%. So though they are nearly right they are just not good enough. The banks say that 1.2408% monthly is an APR of 15.9% and that is correct.

 

When / if you tackle MBNA on this you will find them obtuse to the point that you think they are stupid or liers. I think not either. This [problem] was thought up about 40 years ago and no-one in their organisations is now aware of it. They put an interest rate into a computer or look that interest rate in tables and they get out a monthly rate. They are not aware that these monthly rates are incorrect. They are inbuilt into the computers/lables which MUST be correct.

[Taz11]

Thank you Pelham for your time and patience and for explaining everything in detail. Your last post tidys everything up that I needed to know.I will check out the link you posted.

 

 

If the judges aren't too au fait with maths, they may fall for the stoozing link...lol

 

I'll keep you posted on any replies, if any, from MBNA

 

By the way, I've just worked out what MBNA stands for My Balance Never Alters......lol

 

thanks for all the advice

 

Taz11

[Taz11]

Having read the link Pelham, I have found some recent statements which indeed shows and states they charge a monthly interest rate of 2.5292 which I assume without having the necessary software is a rate of 34.95% and not 34.90 as shown in their t&c's.........................now just got to be able to prove it

 

sorry Pelham, just realised didn't need your software, used your formula and 2.5292 does indeed result in 34.9493% (34.95)

 

Interesting to note, they show the monthly interest to 4 decimal places but not the annual rate !!!!!!!!!!!!!!!!!!

 

 

SNEAKY BLOODY GITS !!!.

Edited February 4, 2009 by Taz11

[Taz11]

Just another thought Pelham?, could they not defend the idea of the rate being higher by stating the sentence in T&C'S 1c : 34.9% APR VARIABLE

 

thanks Taz11

[citizenB]

Having read the link Pelham, I have found some recent statements which indeed shows and states they charge a monthly interest rate of 2.5292 which I assume without having the necessary software is a rate of 34.95% and not 34.90 as shown in their t&c's.........................now just got to be able to prove it

 

sorry Pelham, just realised didn't need your software, used your formula and 2.5292 does indeed result in 34.9493% (34.95)

 

Interesting to note, they show the monthly interest to 4 decimal places but not the annual rate !!!!!!!!!!!!!!!!!!

 

 

SNEAKY BLOODY GITS !!!.

 

Dont be shy Taz, tell us how you REALLY feel about MBNA

 

Now we just need to know how to put this all in a letter to convince MBNA we are on to them or to defend ourselves in front of a mathematically challenged DJ

[pelham9]

34.9493% (34.95)

 

Careful. 34.95% annually is 35%APR (.05 rounds up!)

 

34.9% APR VARIABLE

 

 

No the term variable simply means that the rate can be varied from time to time - they must give you notice if they want to change their interest rates. It certainly does not mean that they can say that the APR is anything they please.

 

 

So we have late Ts & Cs using the APR [problem]. Now we need to look again at the earlier Ts & Cs

 

 

Now your so called agreement Ts & CS say

 

In 3 1.45% monthly

In the table 18.9% yearly

In 3 18.9% APR

 

Now 1.45% monthly is an annual rate of 18.87% rounded UP to get 18.9%APR. So that though the annual rate is not shown accurately the error is in your favour.

 

If they were using the APR [problem] ( as they certainly were later) the figure of 1.45% must be wrong. Pointers to this are

 

a) 1.45% monthly is an annual rate of 18.87% less than they intend. Banks never give away cash.

 

b) Invariably they start fom an annual rate and calculate the monthly rate.The calculation requires using ^(1/12) and 18.9 and this results on a figure that is recurring. So the result would be 1.45xxxxxx...... and they must have rounded or truncated the monthly rate.

 

c) The annual rate stated is 18.9% and this is a monthly rate of 1.45306%

 

The only way you have to find out is to ask them.

 

Say that "Though the Ts & Cs are clearly not part of the agreement you wish to check the interest amounts charged early on. Would they please therefore tell you the monthly interest rate they used. At that time the APR was 18.9%. ( using %APR here is not correct as you know but we are out to confuse them)

 

Hopefully they will then toddle off to their computer or tables and come up with the figure you want. They will have some difficulty if the know about the [problem]. If they give a non [problem] figure they know you will challenge the interest thay have charged. If they give you a [problem] figure they prove the [problem]. Quite likely they will give you neither a refer you back to the Ts & Cs.

 

NB I know you do not have the statements but they do not know that.

[AA99]

After sending the letter above, I've received a text message from MBNA to contact them regarding my recent correspondence, and a message on my answer phone to contact Matthew somebody or another urgently...............Guess the answer to that is going to be NO

 

 

Taz, if you get through to Matthew (McGrath, can I presume?), I'll buy you a beer

[Taz11]

Thanks Pelham, I'm learning all the time from your posts. I understand now that they do not round up to 34.95%, but merely use the 34.9493% but choose not to show the further 3 decimal places, so in effect it is the .0493 that is being used to gain more interest as such. For their own purposes they choose to show it merely as 34.9%. Am I getting there m8....lol

 

 

I will certainly wait their reply, and if and when another letter is on the way to them I'll be questioning the original monthly %.

 

thanks again for your input

 

regards Taz

[pelham9]

I

understand now that they do not round up to 34.95%, but merely use the 34.9493% but choose not to show the further 3 decimal places, so in effect it is the .0493 that is being used to gain more interest as such. For their own purposes they choose to show it merely as 34.9%.

 

Almost right! Sorry to be pedantic but if you are going to use this argument you have to understand exactly. There are in fact an infinite number of decimal places after the 34.9493 not just three but four decimal places is sufficient for both our purposes.

 

They chose to show 34.9493.... as 34.9% because the APR is 34.9% and they wish to prove to you that the APR= annual rate. That is nonsense because 34.9493 does NOT equal 34.9.

 

They show 34.943...... as 34.9%APR because the law makes the rounding to one decimal place obligatory and of course it suits them. If you think about this allowed rounding is somewhat curious. The APR legislators were able mathematicians and clearly saw that the rounding would make the %APR inaccurate for calculating interest. But the purpose of the %APR was to allow punters to compare loans (largely from adverts) and to stop enormous interest rate scams. It was never in their minds that subsequently people could be persuaded that %APR was the " the rate of any interest to be charged"

 

The APR [problem] again.

 

They take 34.9%APR and add .05 to get 34.95 because the want as nuch interest as they can get.

 

They work the monthly rate from this figure and get 2.5292406.....%. the "....." means infinitely recurring.

 

Now if they round this up at any time ( even the thousandth decimal place) when they do the reverse calculation they will get a figure that is above 34.95 which has to be rounded to 35%APR.

 

If they round down (better to say truncate ie no roundimg) the resulting figure in the reverse calculatiom will always be below 34.95 and hence 34.9% APR

 

Look at that figure 2.5292406. They might like the idea of having the rate to two decimal places. If the round up to 2.53 they push the APR to 35%.

If they truncate to 2.52 they lose .0092406% and they do not wish to lose anything. Even if they truncate to 2.529 the resulting 'loss' is still too much hence 4 decimal places and 2.5292.

 

This sounds complicated but in mathematical and computer terms it is very simple. 5 lines of programming on a computer suffices and I think that the computers were programmed togive the [problem] answers years ago. Present MBNA staff will take there monthly rates from a computer or from tables printed by a computer and will believe they are the correct rates for a given %APR, They also believe that because the "%APR is equal to the annual rate" the monthly rate is right for the annual rates well.

 

You will find out when you write to them!!!

[Taz11]

 

 

Look at that figure 2.5292406. They might like the idea of having the rate to two decimal places. If the round up to 2.53 they push the APR to 35%.

If they truncate to 2.52 they lose .0092406% and they do not wish to lose anything. Even if they truncate to 2.529 the resulting 'loss' is still too much hence 4 decimal places and 2.5292.

 

 

That paragraph explains exactly what they are doing, too low or rounded down and they lose out, rounded up, it goes over and above the figure they require. So they settle for the 4th decimal place for statement purposes (even though it is a recurring number) which entitles them to show a % of 34.9 (even though in reality it is 34.9493%), which as you say is obligatory and suits them............for obvious reasons.

 

Thank you for educating me Pelham, It is an insight that I would have NEVER forseen, unless explained as you have.

Edited February 4, 2009 by Taz11

[pelham9]

You want to delay this as much as possible?

 

Keep disputing. Until there is a resolution of a dispute they cannot pass the account to a debt collector or go to court though they will probably do so. If they decide the dispute is resolved or at an impasse they must give you the opportunity to go to the financiaql ombudsman which could take months if you decide to go down that route.

 

I think at present they owe you a lettter. Politely remind them that you need this reply enclosing a copy of your last letter if you think it helps.

 

I think very soon they will be in a position to send you an impasse letter on the first main argument. Then would be the time to continue the dispute with carefully worded letters to dispute the interest rates in the Ts & Cs. with something like this.

 

The appication form and the Ts and Cs you have sent me clearly do not constitue a true copy of an agreement as reqiired by the CCA 1974.

 

Nevertheless it would be sensible for you to consider whether these Ts & Cs do indeed contain the prescribed terms as required by the CCA 1974 and subseqeunt regulations.

 

Please inform me how you consider the interest rates in these Ts and Cs satisfy the prescribed term 'the rate of any interest to be applied'

 

Then sit back and await a lot of nonsense!