Why let your bank keep your money? Calculating your charges claim

[Notty]

Do you think I should send another LBA as I will be claiming interest on the o/d charges. It isnt a lot of money but I will claim it back. As we do not normally claim the 8% interest until we issue the N1 claim form I am not sure what to put in the LBA about the interest charges from the o/d. Can anyone advise please.

[GuidoT]

I would just file the claim once the period in your previous LBA has expired.

 

Others maybe a bit more cautious.

[photoman]

Bankfodder, and all.

 

I agree wholeheartedly that you should also make claim for the additional interest the bank has applied/deprived you of due to the charges.

 

By also accounting for such interest, you often quite quickly reach a point whereby you can actually see that any subsequent "overdraft excess" or "limit breach" that then later gave rise to charges arose solely due to accumulated earlier charges and the interest upon such.

 

I would even suggest considering going even further.

 

Many people are also forced at some point to take consolidation loans with their banks in order to repay "borrowing".

.... borrowing that is often solely or mostly originally made up of charges and interest upon such !!

 

The calculations are admittedly a bit more involved and difficult to determine, but for anyone who makes the effort the results can be quite an eye opener !!

 

The chain of events would go something like this:

 

1/ You incur bank charges.

 

2/ The bank applies/deprives you of account interest as a result.

 

3/ The bank then puts you under pressure to take out a consolidation loan, to repay your existing borrowing .... but we contend that this existing borrowing consisted either solely or largely of charges and interest upon your original account.

 

4/ The consolidation loan then incurs yet more interest.

 

5/ ALSO...the account you make the loan installments from, then incurs/ is deprived of further interest due to making the monthly loan repayments.

 

6/ As a result, the account that the installments are made from then goes overdrawn..... often due largely to the loan installments... thus incurring even more charges, and interest.

 

........ and the whole cycle starts all over again.

 

 

I am currently working on modifying some of Mindzais sheets to try and create a set of (preferably a single) spreadsheets that would more easily allow the calculation of such a chain of events.

 

I am no mathematician or accountant though, and work on such is slow, so if anyone else more competent is interested in helping me then post up here or get in touch?

 

Such spreadsheets are currently being worked on in "Open Office", which is free to download software from the web, meaning that you wouldn't need to buy any software to use them, and also means they can be universally used on either PC or Mac.

 

PM

 

I agree completely that interest paid on consolidation loans should be claimed back in its entirety.

 

It is really quite disgusting that the banks have taken people's money, put them in debt and then obliged them to borrow more money simply to repay their own money!!

 

My problem is that I am not too clear at the moment as to how to express this as a head of damage so that it falls within a conventional cause of action.

 

However, I am sure that it will come to me.

 

 

Bankfodder,

 

Have you given/had any more thoughts on this ?

 

Can the contentions regards making them forfeit their additional interest gains applied to the penalised account, be carried forward to also encompass their gains made upon subsequent consolidation loans ?

 

IMHO, the principle and cause of action is identical ?

 

Any more thoughts, or reasonings as to why it may differ ?

 

Regards

 

PM

[Notty]

I am just filling in my N1 claim form and I am very confused regarding the interest. On the form it says

Charges - which is ok

Associated overdraft interest charges £xxx - which I assume is the amount I have calculated with regard to this thread - so I think I am okay there.

Interest under s69 County Court Act 1984 £xxx - which I think is the total amount from the spreasheet?

Court fee - okay.

Total -

 

but at the bottom it says pursuant to s69 County Court Act 1984 from date of issue to date of judgment/settlement at £xxx per day - I do not know what to put here and I am totally confused. On my original bank claim in 2006 I only put the speadsheet s69 interst. I didnt add a daily amount so I dont want to miss it on this one.

 

Anyone able to help me please.

[Ibsys]

I am just filling in my N1 claim form and I am very confused regarding the interest. On the form it says

Charges - which is ok

Associated overdraft interest charges £xxx - which I assume is the amount I have calculated with regard to this thread - so I think I am okay there.

Interest under s69 County Court Act 1984 £xxx - which I think is the total amount from the spreasheet?

Court fee - okay.

Total -

 

but at the bottom it says pursuant to s69 County Court Act 1984 from date of issue to date of judgment/settlement at £xxx per day - I do not know what to put here and I am totally confused. On my original bank claim in 2006 I only put the speadsheet s69 interst. I didnt add a daily amount so I dont want to miss it on this one.

 

To calculate the daily rate, take the amount due then workout the interest per annum and divide the figure by 365 (days in a year. What it is asking is the rate from which the interest is due from date of issue to date of payment assuming that all charges and items have already been calculated up to date of issue.

[Notty]

how do you workout the interest per annum? I am not using the spreadsheet. Is it 85 of the total amount of charges and 0/d interest?

[Ibsys]

If you have:

 

Amount (£) owed per year say £1000

Multply this by 8% statutory interest rate £ 80

Divide the £80 which is per annum x 365 days =£0.219 Say 22p per day

 

If the claim plus interest is £1080, add 22p er day until paid

 

That is date of issue until payment (EG. if it is six weeks then 22p x 42 days = £9.20

[Notty]

Thank you for that Ibsys. Just one last thing do the court allow that when the claim is settled. Or do you have to remind the bank when the case is settled that they owe the daily rate of interest. Thanks again for your help.

[caro]

Multiply the amount of your entire claim by 0.022% to get the daily rate, regardless of how many years it is.

 

On your claim add "plus a daily rate of interest of xxp up to the date of settlement", otherwise you can't ask for it later.

[Ibsys]

Multiply the amount of your entire claim by 0.022% to get the daily rate, regardless of how many years it is.

 

On your claim add "plus a daily rate of interest of xxp up to the date of settlement", otherwise you can't ask for it later.

 

I never calculated it that way but I see this can make things simple. However, is the starting point to consider that we have multiple items on different dates and so the rate in pennies would increase as the charges would.

 

EG: If the first charge was 1yr from charge to court claim issued and the last being say 9 months later, the rate would surely increase. I worked mine out and took this into consideration but it was brain-taxing.

[caro]

If you put the date of each charge in your spreadsheet (the advanced one) it calculates the interest from that date. http://www.consumerforums.com/resources/templates-library/48-bank-templates/118-interest-calculation-spreadsheets

 

It updates everyday, so you can simply print off an updated copy any time you need it. Make sure you keep hard copies of the ones you use for your letters and court claim though.

[photoman]

I agree completely that interest paid on consolidation loans should be claimed back in its entirety.

 

It is really quite disgusting that the banks have taken people's money, put them in debt and then obliged them to borrow more money simply to repay their own money!!

 

My problem is that I am not too clear at the moment as to how to express this as a head of damage so that it falls within a conventional cause of action.

 

However, I am sure that it will come to me.

 

 

Anyone got any more thoughts on this ?

 

PM

[caro]

Hi PM. Although this is a very old link and the OP did not come back with the outcome, this thread has some ideas on this issue. http://www.consumeractiongroup.co.uk/forum/hsbc-bank/4562-lueeze-hsbc.html#post136835

[photoman]

Thanks Caro,

 

So, IMHO, I think this is both reasonable and do-able.

 

Provided one can perhaps show there was pressure to consolidate,and it was with the same provider, then any extra interest gained by the lender (or perhaps even any interest foregone by borrower) should be claimable.

 

Think I'm going to have a go at this, unless someone here can show strong reasonings to contrary.

 

I think I actually started a thread on this topic a while back, but got little interest or reply.

 

I will seek out the link, and post it here (or start a new one), as I think this is a very overlooked and important aspect regards unfair charge victims compounded losses.

 

Any other comments anyone ?

 

Regards

 

PM

[photoman]

I personally think this is an important issue that has been quite overlooked.

 

So, just wanted to revive this thread.

 

http://www.consumeractiongroup.co.uk/forum/general/49648-loans-pay-off-overdrafts.html

 

 

(perhaps someone from the site team would like to take a peek, and perhaps sort the wheat from the chaff, so to speak) ?

 

 

My contention:

 

The Banks are getting away with additional "secret" profits, by forcing people to take out loans to repay borrowing, when in many cases, much of the "borrowing" is comprised of charges that have been wrongly applied to an account in the first place !!

 

So in effect, we get clobbered with penalty charges and additional interest on the account they are applied to...... THEN ALSO.. we take out subsequent loans with the bank, under great pressure from them to do so.. or risk facing some dire recovery consequences.

 

These subsequent loans are also often at higher rates, because of poor credit ratings (ratings which are themselves actually attributable to the history of charges).

 

I am now working on some claims of my own, which will include claiming the additional interest incurred through these loans.

 

I have myself been working on some spreadsheets to help calculate this.

 

It calculates the portion of interest upon a loan that can be attributed to the original penalties (and carefully calculates only such elements without trying to claim for anything twice over), and sits in, and ties up nicely with existing spreadsheets.

 

I hope it, or something similar (I am no accountant or speady whizz, so if anyone else is, or has any contributions to make, please do) can start to be incorporated into claims as standard practice.

 

I would appreciate if any Moderators, site helpers, or members with experience of prior claims including loans could contribute.

 

I would also like anyone perhaps contemplating similar actions to contribute.

 

 

Regards to all

 

PM

 

 

PS: I would like to just add, that I have tried out my own sheet regards to some loans I was forced to take out.

 

I was really very shocked at just how much additional interest has been paid due to these practices !!

 

So, for anyone who may think the sums are trifling, and perhaps not worth the trouble...think again !!

[photoman]

This is the issue I am trying to bring peoples awareness to:

 

Consider an example scenario:

 

You have an account, and run up a £1000 overdraft.

Say for example £500 of that O/d is charges.

First off that means you pay for example 18.5% p.a. interest on the extra £500, (which we all do presently try to account for in our claims)

You then take a consolidation loan to repay the £1000, at say 15% p.a. which will be paid by monthly installments from the original account.

This means that you are paying an additional 15% p.a. (compounded over the course of the loan) on the initial £500 and also on the extra overdraft interest you've already given them.

PLUS... because you are repaying it each month from your account, this could mean, that because of all the extra interest, you are more overdrawn on that account than you should be, and so also end up paying yet another 18.5 % p.a (compounded over the period of the loan) o/d interest from your original account to cover the extra interest you are paying out on the loan.

 

So in short:

They give you penalty charges & charge you interest on them.

They then charge extra loan interest on these charges and interest.

They then charge you extra o/d interest on the extra loan interest.

 

This means they have hit you 3 times over with additional interest (all compounded) on the initial charges.

 

Then of course there is the increased repayment insurance, because the loan is bigger than you really needed... along with the extra interest on the bigger premiums you need pay for the insurance !!

 

.....It's not so obvious that all this is the case, until you start to analyse it this way..... and that's probably just the way they like it !!

[uptoneck]

subbing

[Rhia]

Subbing. I don't understand the interest vis a vis the S69. I thought you could tot up penalties add CI and then the final total is entered into the NI or MCOL and you could claim 8% on top of this as that is the statutory interest a court can allow.

Puzzled.

[AA99]

Anybody got a link to the Law Lords Appeal today???

[caro]

http://www.consumeractiongroup.co.uk/forum/oft-test-case-updates/139905-oft-banks-house-lords-98.html#post2243964

[caro]

Subbing. I don't understand the interest vis a vis the S69. I thought you could tot up penalties add CI and then the final total is entered into the NI or MCOL and you could claim 8% on top of this as that is the statutory interest a court can allow.

Puzzled.

 

You can't claim CI and section 69 (8% interest). It's one or the other. What you CAN do, is claim back the interest that you have paid out on your charges, and when you do your court claim you can add 8% to it. The advanced spreadsheet calculates this for you.

 

Alternatively you could claim CI, but you will need to be very confident in your arguments to do this, and you will need to claim this when you start the letter writing before court action. Steven4064 explains it better than me in this link.

 

http://www.consumerforums.com/resources/templates-library/51-guidance-notes/233-interest-tutorial

[Rhia]

Ah I see now. I am about to start a thread as going after a major bank for charges dating back to the 1990s. Thought it worth a shot but need to be absolutely correct in my argument

[Stubie]

BBC NEWS | Business | Banks 'face deluge of litigation'

 

It makes sad reading, almost brought a tear to my eye........almost:D

 

"Does our case allow extortionate prices? Yes," he (Mr Sumption - banks) said.

 

WTF!!!!!!!!!!!!!!!

[Stubie]

BBC NEWS | Business | 'Rewriting' claim on bank charges

 

Latest offering

[2Grumpy]

I've been trying to think of a simple way of calculating the amount of excess interest to claim for the period from when the first penalty charge is applied to when the entire overdraft is made up of unfair charges.

 

The exact way involves having all transactions available, then work out proportions each charging period.

 

One way of estimating the proportion of interest to reclaim each month is by using the proportion that the total charges are of the daily balances. That's not easy because one line on a statement can represent many days while several other lines represent one day. Also you might not have the balances (if you just have the transaction values from a SAR).

 

However, based on the unfair charges being applied reasonably evenly, an estimate of the interest charged on the total unfair charges would be half of the total interest charged for the period between when charges started to be applied at regular intervals and amounts and when the total charges always exceeds the overdraft.

 

For example, if charges of £100 were applied each month for 25 months before the total charges exceeded the overdraft balance and the interest charged for those 25 months was a total of £150, you could add £75 to the claim.

For charging periods where the total charges exceed the overdraft balance for the whole of the period, the whole of the interest for that period would be reclaimable

 

For those people who know the interest rate charged on their overdrafts (might be on the bank website) it's easy enough to work out the amount of interest charged on the total of unfair charges each month.

That's probably the best way to go for people without their balances (transaction details only from a SAR).

You would have to reclaim the amount charged when the amount calculated exceeded the amount charged (that's the point when the charges exceed the overdraft balance!)

 

Any comments?