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

[enoughisenough]

Needing to keep this necessarily vague for purposes of not alerting the enemy.

 

Say you have a debt of around 600 largely constituted of unlawful charges with a high street. The debt dates back to the mid 90s. Occasional DCAs come and go buying and selling on the debt, but kind of give up. Then out of the blue about 10 years later you receive claim papers from a court a million miles away. The debt has risen to 9k and you are petrified and you bury your head in the sand, hoping it will go away (it rarely does). Because you have no means of paying this 'debt' a charge is secured against your property. About a year later you apply to Mr. Sub -prime who very late in the day finds this charge and thereby adds a further 9k to your loan to clear the charge. The charge is duly cleared. Then the BBC raises everyone's hackles by suggesting that all this time the charges weren't lawful. County courts get deluged and the banks start paying out left right and centre.

 

The banks then throw in the towel and decide to have a test case. You in the meantime have wisened up considerably. What basis for challenge might you have. Limitations Act? UTTCRS. Fraud Act? Any thoughts. You might want this money back as it has ballooned considerably costing you an arm and a leg in mr sub-prime interest.

 

The interest calculation for a properly constituted claim would be enormous.

[caro]

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?

 

The advanced spreadsheet does a fairly decent estimate that have been accepted thousands of times. It tends to take a fairly small amount of charges before you can start claiming all the interest charged anyway.http://www.consumeractiongroup.co.uk/resources/templates-library/48-bank-templates/118-interest-calculation-spreadsheets

 

Needing to keep this necessarily vague for purposes of not alerting the enemy.

 

Say you have a debt of around 600 largely constituted of unlawful charges with a high street. The debt dates back to the mid 90s. Occasional DCAs come and go buying and selling on the debt, but kind of give up. Then out of the blue about 10 years later you receive claim papers from a court a million miles away. The debt has risen to 9k and you are petrified and you bury your head in the sand, hoping it will go away (it rarely does). Because you have no means of paying this 'debt' a charge is secured against your property. About a year later you apply to Mr. Sub -prime who very late in the day finds this charge and thereby adds a further 9k to your loan to clear the charge. The charge is duly cleared. Then the BBC raises everyone's hackles by suggesting that all this time the charges weren't lawful. County courts get deluged and the banks start paying out left right and centre.

 

The banks then throw in the towel and decide to have a test case. You in the meantime have wisened up considerably. What basis for challenge might you have. Limitations Act? UTTCRS. Fraud Act? Any thoughts. You might want this money back as it has ballooned considerably costing you an arm and a leg in mr sub-prime interest.

 

The interest calculation for a properly constituted claim would be enormous.

 

That's what restitution is about.The Consumer Forums - Banks face deluge of charges claims and massive liability

[MissMorningStar]

I am now at the LBA stage with one of my claims.

 

With my previous claims I spent hours trying to work out how much of the interest debited was based on my charges and admitted defeat in the end.

 

I have decided to try and give it one more go again on my current claim but am getting nowhere- sums was never my forteit! I have tried using the template in this thread that ohoh4312 has produced however my stubbling block now is that it appears I need to know what my overdraft limit was at the time of the charges and interest debited? My statements do not say what my overdraft limit was and I believe it will have changed quite often over the 3 yrs of my claim as I slowly increased it up to amount it is now set at. :s

 

Is this correct that I need to know my overdraft limit at the time of each charge or is it just the amount I was overdrawn once charge had been made?

 

Missy

[BankFodder]

I would say that you don't at all need to know what your limit was.

 

You only need to know what proportion of your actuall overdraft was made up of charges.

 

You don't need to do any interest calculations.

 

Just look for the charges figure on eeach statement and then also look for the overdraft interest figure on each statement.

 

If,say, on 1st Jan 2004 they owed you £1000 in charges and you were £2000 overdrawn - then that means that 50% of the interest you paid on the overdraft was paid on your own money. You were overpaying.

So if on that statement sheet, the overdraft interest was £50, you claim £25 (50%).

 

Once you get to the point that you entire overdraft was comprised 100% of icharges then you claim all of the interest.

It doesn't matter if you were overlmit or not.

 

For instance, my account with Lloyds is currently about £1500 overdrawn. This is well within my present limit. However they owe me charges of probably well over £5000. This means that all of the interest they are charging me at the moment is my own money and I shall be claiming that back as well.

 

At the end of the day, work it out as best you can. Round it up in your favour. Don't worry about making honest errors. Err in your favour.

When you sue them, let them challenge your figure and give the proof to the court. So they reduce your claim by a couple of hundred or so. Who cares. The important thing is not to let them get away with a single penny.

They've had quite enough already.

[MissMorningStar]

Thanks BankFodder...

 

So does this look like I'm on the right track below?

 

I was a little unsure as to whether to calculate the interest added THAT month or the following month. I went for following month as I thought subsequent months interest relates to previous month?

 

November

Overdraft as of 30 Nov= £168.44

O/D Interest debited 31 Dec= £5.60

Last months accumulative of Charges and Interest= £0

This months charges total= £90.00

Total interest and charges to date= £90.00

£90.00 charges and interest to date divided by amount overdrawn £168.44= 53.43% of amount overdrawn is charges.

Overdraft Interest £5.60 divided by 53.43%= £2.99

£2.99 + £90.00 charges and interest to date = £92.99

 

December

Overdraft as of 31 Dec= £340.40

O/D Interest debited 31 Jan= £1.67

Last months accumulative of Charges and Interest= £92.99

This months charges total= £0

Total interest and charges to date= £92.99

£92.99 charges and interest to date divided by amount overdrawn £340.40= 27.32% of amount overdrawn is charges.

Overdraft Interest £1.67 divided by 27.32%= £0.46

£0.46 + £92.99 charges and interest to date = £93.45

 

January

Overdraft as of 31 Jan= £137.01

O/D Interest debited 28 Feb= £1.00

Last months accumulative of Charges and Interest= £93.45

This months charges total= £0

Total interest and charges to date= £93.45

£93.45 charges and interest to date divided by amount overdrawn £137.01= 68.21% of amount overdrawn is charges.

Overdraft Interest £1.00 divided by 68.21%= £0.68

£0.68 + £93.45 charges and interest to date = £94.13

 

February

Overdraft as of 28 Feb= £47.56

O/D Interest debited 31 March= £1.28

Last months accumulative of Charges and Interest= £94.13

This months charges total= £0

Total interest and charges to date= £94.13

£94.13 charges and interest to date + £1.28 Interest added 31 March 09= £95.41

 

March

Overdraft as of 31 March= £328.79

O/D Interest debited 30 April = £4.59

Last months accumulative of Charges and Interest= £95.41

This months charges total= £0

Total interest and charges to date= £95.41

£95.41 charges and interest to date divided by amount overdrawn £328.79= 29.02% of amount overdrawn is charges.

Overdraft Interest £4.59 divided by 29.02%= £1.33

£1.33 + £95.41 charges and interest to date = £96.74

 

And so on until present month?

 

Have I calculated February correctly do you think? As accumulated charges and interest was more than the overdraft figure for that month I just added the whole interest amount debited the following month?

 

This is going back to 2006 so should be quite substantial by the time I get to present day, especially as the past year interest debited has been £30-£40 per month.

 

 

Thanks,

 

Missy

[BankFodder]

I haven't checked the maths but the logic is correct and February is certainly correctly calculated.

 

After that, you have to decide whether you would like to claim for restitutionary damages or whether you will be satisfied merely with adding 8% on top.

[MissMorningStar]

Thanks BankFodder- will have a read up about restitutionary damages around the site once I have finished the rest of these calculations.

 

Thanks for your help,

 

Missy :O)

[Ms-Unknown]

Does anyone have a template letter one can write to the bank to claim their bank charges bank,

 

what about if its an account you have closed, as I used to have one with HSBC, but closed the account, am i still eligible to claim for the money?

 

Thank You

[GuidoT]

It does not matter if the account is closed.

 

Template here for claim back charges.

 

You should start you own thread.

[coppullcaveman1]

The last time I calculated my bank charges they were well over 1000 pounds, I wrote to RBS and asked for all my statements which I recieved, I then sent in a letter asking for the money back and heard nothing zip !

This was a few years ago now.

I can honestly say that if Cag could get the money off them they could have it with pleasure. By the way I was previously registered on here but lost my old email adddress and password... this is why I added a 1 to my name, is there anyway i can re-gain access to my old account please ?

[2Grumpy]

I've updated the spreadsheet that was posted in here to calculate reclaimable interest & statutory interest.

 

There are cells used for calculation that shouldn't be printed & formula that are only in the first few rows that need to be dragged down for all the rows

 

Account balance has to be entered whenever there is interest charged

 

Calculations take into account that interest is charged on previous months transactions

 

This is a draft & I would appreciate feedback!

Draft Int Calc3.xls

[caro]

Hi 2grumpy

 

Could you email it to me please at caro@consumeractiongr oup.co.uk (no gap). I can only view excel at home so I'll send it to work and check it properly there on Monday to see how the results compare to the CAG spreadsheet.

[hoohizzel]

Okay, sorted now. A simple solution to something that has bugged me for 3 days.

 

So now the formula exists in every cell in Column B - except the very first, as it is assumed that you had to incur charges to be charged interest on those charges.

 

This means it doesn't matter where your interest charge falls on the spreadie, as long as you use Column H for the actual figure, the calculation will automatically occur. Hopefully that should remove the need for inserting/removing rows, and generally make life easier.

 

I could kick myself for being so dumb, and apologies if you copied the original version.

 

I am not saying it is perfect btw, so I still need feedback please.

 

Thank you ohoh4312, for this spreadsheet, i have found using it easy, which is great for little old me! whom has no experience of spreadsheets, it was a bit daunting trying to work out overdraft interest percentage v charges applied before reaching the time when the overdraft was same amount as charges, although i have used it for 2 bank accounts, Lloyd's & NatWest, pretty much same amount of charges applied to both over six years and same 1000 overdraft, the OD interest on the charges Lloyd's had taken was £ 250, where as the NatWest was £2,600!!!! maybe i have done something wrong?? or maybe it was because larger sums of money went in and out the Lloyd's??

[Stubie]

I wonder if the risk managers at the various banks are totting up the posted claims from this thread and crying quietly into their beer.

 

Hopefully some or Mr Sumption's more dire warnings will come home for him

[the_shadow]

I wonder if the risk managers at the various banks are totting up the posted claims from this thread and crying quietly into their beer.

 

Hopefully some or Mr Sumption's more dire warnings will come home for him

 

with respect I doubt many are that concerned..after all theres always the public money to back them up if they get into trouble again

 

S.

[Stubie]

If only I had an arguement.

 

As always, you are bang on the money Shadow. (no pun intended )

 

I suppose we could look on it as an impromptu tax rebate. Not sure that helps, though.

[caro]

Some of you may like to read this tutorial on interest. http://www.consumerforums.com/resources/templates-library/51-guidance-notes/233-interest-tutorial

[hoohizzel]

I am claiming for the second time with the NatWest under hardship, i won with full and final settlement back in 2006 but had not added interest at the time, can i claim the overdraft interest from the first claim and added charges to the present date?

[caro]

If you agreed to it being a full and final settlement I think you probably couldn't claim that. You could ask for interest under hardship, but I doubt you'll get it, but iyou could go to court for any shortfall in your second claim, including any interest.

[hoohizzel]

Thanks for that Caro,& thank you for the link to the tuition in interest, I'm just a lowly little house wife with 4 wee babes, never really had to think about how the interest is applied!!but this forum is sooo helpful

& watch out banks I'm a quick learner!!!!!8)8)8)

[caro]

Don't undervalue what you do hoohizzel. You have my respect having 4 to take care of!!

[Stubie]

Only admiration here.

 

I have 2 and that is enough of a trial.

 

Good luck with the claim

[hoohizzel]

Thanks Guys!!!!:-) I love this place:):)

[HSBCrusher]

I'm just a lowly little house wife with 4 wee babes

 

four? you must work harder than 99% of blokes out there, including those greedy bankers.

 

all the best with your claim

[2Grumpy]

here's a different version of ohoh4321's spreadsheet

 

It's for people who are entering data from a SAR and only have a list of charges & interest, no balances

 

It calculates the interest to reclaim, also statutory interest

 

It's a draft, so use carefully. Clear & extend the area with the formulae if you use it.

 

Charges & interest go in different columns

 

I calculate the balance from the interest charge & interest rate, or use a default rate if that's not known. It just has to be equal to or higher than the actual rate. It will handle rate changes (monthly or annual).

 

I use the previous months balance for apportioning the interest because that's what it's charged on

 

I work out when the full interest charge can be applied

 

Any feedback would be appreciated.

Draft Int Calc4.xls

Edited July 9, 2009 by 2Grumpy