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

[bigyeti]

Just ran the old charges through the spreadsheet and have kicked myself black and blue when I saw how much I could've claimed back.

 

But, just entered the charges they've applied since and the interest is just over £80 from £309 of charges.

 

I'm adding up the charges for Yorkshire bank, but I'm not sure what the APR is on the overdraft interest. I don't think there was any interest at all, just the fees.

[tifo]

You'd struggle to claim the interest if you've agreed a F&F settlement.

 

If the settlement was for default charges only with no mention of interest applied to charges AND the claimant did not request this at any time, then it may count as a separate claim for interest applied to charges. For example, in many of my settlement offers, it clearly states it is for default charges etc and no mention of interest so I will be asking for this as a separate complaint because I did not ask for it before.

 

In effect, we have 4 claims in respect of default charges and PPI.

 

1. Claim default charges.

2. Claim interest on default charges.

3. Claim PPI charged.

4. Claim interest on PPI charged

5. Add statutory interest to all the above at each stage.

 

This is one of the pitfalls the site team point out when people are considering accepting F&F offers of settlement, as it effectively closes the door on further litigation on the same issues.

 

The issue is different, before it was default charges and now it is interest on these charges. It is much easier to argue (and win hopefully) as the bank has already accepted and refunded default charges so to be in the same position of you being where you would be had the charges not been applied, they must refund interest as well otherwise they have made a profit from the charges.

 

This is just a brief outline of how i understand things. More experienced members may explain things better.

Edited December 8, 2009 by tifo

[bigyeti]

There is more than one interest rate involved too. One for when I was within my limit and one for when I went over. Back in Feb 2005, I was stung good and proper and at one point was £215 in the red, and good job I had another account to pay the tax credits/child benefit into otherwise we probably wouldn't have eaten for a fortnight.

 

It'd take some clever maths to work out the exact interest accrued. Well, not clever maths, but certainly laborious.

[shaz1000]

Does this also apply to interest added to credit cards?

[bigyeti]

More than likely. If you've paid extra interest because £60 of you balance owed was from charges, then you can chase them for that interest.

[Poor-Credit Borrower]

I think that credit card charges are the same.

Even though they are not the subject of the test case, I don't expect that a judge would have too much difficulty accepting that they were subject to the UTTCR as well.

The OFT has already pronounced on a "fair rate" of £12. The credit card companies didn't murmur a word of objection that the OFT had no jusrisdiction over them.

 

The courts have been happy to stay CC charges claims as well.

 

I think that they get all the same treatment.

 

The only thing is that it may not be possible to claim back CC charges if they were actually levied at the OFT capped rate of £12.

 

I think that you will only be able to recover those charges which were lvied at a higher rate.

But if they charges was levied ata higher rate, you will be able to get it back in full - plus al interest which has been taken on those invalid charges.

 

Hello BankFodder,

I know your post was dated the end of May 2009, but is there a more recent thread in the CAG on the reclaiming of unfair bank charges, i.e. since the unwelcome Supreme Court decision in Nov 2009?

 

I have had a claim against the Abbey for years, but it was put on hold as per the FSA waiver. Now this waiver has been lifted, the complaints department of the respective banks has written to customers saying (perhaps expectedly) that the charges "do not amount to penalties at common law and that the level of them cannot be assessed for fairness under the UTCCRs 1999". They are "satisfied that the bank charges seek to reclaim were properly charged and the outcome of the legal processings confirms [their] position. [They] are therefore not upholding [my] complaint and will not be refunding the bank charges...".

 

There is the option to refer our complaints to the Financial Ombudsman Service, but their own website seems to discourage this (for bank charges) except in exceptional circumstances. By the way, I did get something from the Abbey but I had applied as a "hardship case".

 

Is it open for an individual to complain via one of the other terms, e.g. under Regulation 5 which rules that a term in the contract can be deemed unfair if it was not drawn individually between the company and the given customer, where there is a significant imbalance against the customer? It's a pity the OFT have decided against making a further general claim themselves. Are there template letters available for this, or will there be?

 

Grateful for any (further) advice.

[enoughisenough]

As of January 2009 it was considered by the OFT that to insert Full and Final clauses in settlements were 'unfair' as they could act to the detriment of the consumer.

 

Really struggling to find the link BUT I KNOW I saw it...

[Ibsys]

Is it open for an individual to complain via one of the other terms, e.g. under Regulation 5 which rules that a term in the contract can be deemed unfair if it was not drawn individually between the company and the given customer, where there is a significant imbalance against the customer? It's a pity the OFT have decided against making a further general claim themselves. Are there template letters available for this, or will there be?

 

Grateful for any (further) advice.

 

I have seen the www.moneysavingexpert.co.uk written by Martin Lewis. He has employed a barrister to consider a way forward to bank charges and first indications are the CCA 1974 where it is on the onus of the bank to prove the charges are fair.

[bigyeti]

Here's what happened to me. I put in the claim, but didn't add the overdraft interest so all I claimed for was the charges themselves. This is the crux of the original post, tat I should've claimed interest as well. I filed a case at the court and Halifax paid up plus the 8% interest. But that is not the overdraft interest. Now, the OP is saying that I can claim for the interest I didn't claim for before.

[officejet1000]

Sorry to post here, but how do I send a PM to Bankfodder, as it won't go through as the inbox is full - have litigation questions etc in same vein

[slick132]

Hi OJ,

 

Post it here for starters.

 

If BF needs to see it, we can draw it to his attention.

 

You'll appreciate that BF is V busy at all times.

[Springboard]

I registered my interest in claiming with my bank over 3 years ago. I did not include any detail, simply my intention to claim. I received acknowledgement of the letter and a second letter stating that the decision had been deferred pending the outcome of the court ruling. I have heard nothing since but I am aware of the surprise OFT verdict ruling in favour of the banks. I am sure I would be entitled to a hardship claim if this were still a valid option.What next for people like me? Was the ruling in favour conclusive?

Edited January 19, 2010 by Springboard
spelling

[AA99]

I put in a claim in November 09, got 2 responses in December with an I&E form to be looked at. Haven't done anything yet but got a letter this morning, just dated January 2010, and looks very much like a template letter:eek:

 

http://i390.photobucket.com/albums/oo349/AA99/NATIONWIDE/NWresponseJan2010.jpg

[Springboard]

Hi

Thanks for the feedback, are you going to pursue based on the fairness of the charge not the amount?

[AA99]

Well, I'm not going to let it rest! I shall take professional advice and look to more answers on here:)

[N.P]

Claim on the basis that the judge was wrong.

 

Millions of people say they are wrong. The banks paid back millions of pounds, why? The OFT say they are wrong. The High Court says they are wrong. The Court of Appeals says they are wrong.

 

Looks to me like the little old man in the Supreme Court was protecting the Banks from a mass payout and bankrupting the country. Maybe, they had a back hander, maybe they were afraid of being popped off by a sniper, acting on behalf of the Banks.

 

Lloyds TSB are chasing me for an overdraft, which includes charges, yet have failed to show up with an account opening form or agreement for the account which is 24 years old.

 

I will not give in untill they do. I require proof I signed the agreement that they can extort money from me

[Professor Lone Ranger]

When your bank applies bank charges to your account, they do this normally because you have no money in the account.

Because you have no money in your account, the bank charges will have the effect of putting you overdrawn.

Maybe you are overdrawn already in which case the bank charges will make you even more overdrawn.

If you are overdrawn then the bank will charge you interest on the overdraft balance. If your overdraft is within agreed limits then you will be charged a high rate of interest. This has typically been between 16% and 20%.

 

If your overdraft is outside the agreed limit then your bank will be charging you interest at an excessively high rate. This is the “unauthorised borrowing rate” and has typically been between 26% and 29%.

 

The point that I am getting to is that if you have suffered bank charges and you have been overdrawn, then that must mean that your overdraft is least partly made up of unlawful bank charges. If the bank has been applying interest to unlawful bank charges then it follows that this interest is also unlawful.

You should be claiming that back too.

 

Some people are aware of this – but I am starting t understand that a very large number of people – maybe the majority – are not aware.

 

The calculation of the interest which has been levied on your bank charges is a complicated business. In fact, in the past I have seen several people posting that they cannot be bothered to work out the interest which they have paid and that as long as they get a charges settlement, then they will be quite satisfied.

 

What people fail to realise that the interest on bank charges very soon adds up to a significant amount. In fact it only takes about 3 years before the interest which you have paid is equal to the charges which have been taken. It then starts to go up exponentially and by the time you have calculated a full 6 years of bank charges interest, you may well find that it is as much as 3 or 4 times the value of the charges which have been taken from you.

 

This can be a very large amount of money.

In the next few months will be discussing a legal basis for reclaiming your bank charges back at least until 1995. (Watch this space).

It could be that the interest which you have paid up to the present day might be equal to 10 times the value of the charges which have been taken from you.

 

Why write this off to your bank. If you really don’t want the money then give it to a charity – or to give it to The Consumer Action Group. We need it more than the banks do and I’d like to think that we deserve it more than they do as well.

 

Calculating your overdraft interest is a bit fiddly while your overdraft is comprised both of legitimate debt as well as charges and related interest. You have to spend time identifying the portion of the interest which relates to the charges.

However, once you get to the point that your overdraft is composed wholly of charges and related interest – then it gets very easy. At the point that the entire overdraft is comprised of charges, it then became true to say that you are not really in the red at all because of all of the money is yours – taken by the bank. At that point, whether you are within your limit or outside of the limit, all of the interest which is levied against you by your bank is levied against you unlawfully and you should be reclaim it.

At this it becomes very easy for you to highlight the charges on your statement PLUS all of the overdraft interest for each month and to put it down on your claim.

 

Add to that a further 8% statutory interest when you begin your court claim and you are looking at a lot of money.

 

If you are someone who has already claimed your charges and who missed this point about the interest, don’t worry. Start another claim just for the interest and put your claim in straightaway.

By starting a court claim now, you will be able to add 8% statutory interest. This may not be possible after the test case.

Get your charges and charges-related interest working for you NOW. 8% is presently an extremely good rate. You can’t get it anywhere else.

 

 

I have had a long running battle with Alliance and Leicester (A&L) over many years about bank charges. What rights do I have to ask for access to past records? My main complaint has been the practice of debiting the account before making a credit due on the same day making the account overdrawn triggering the charge for using an overdraft facility I paid a monthly fee for having the privilege of and sometimes making it possible to bounce a standing order or direct debit charge and a letter at £25 to be sent notifying me of that. I have written (by E-mail) to the effect I do not accept that the recent court decision has any relevance to my complaint but have as yet had no reply. I have written to the Ombudsman before and have told A&L I will again if I hear nothing. What is my best course of action now please?

[Professor Lone Ranger]

I have had a long running battle with Alliance and Leicester (A&L) over many years about bank charges. What rights do I have to ask for access to past records? My main complaint has been the practice of debiting the account before making a credit due on the same day making the account overdrawn triggering the charge for using an overdraft facility I paid a monthly fee for having the privilege of and sometimes making it possible to bounce a standing order or direct debit charge and a letter at £25 to be sent notifying me of that. I have written (by E-mail) to the effect I do not accept that the recent court decision has any relevance to my complaint but have as yet had no reply. I have written to the Ombudsman before and have told A&L I will again if I hear nothing. What is my best course of action now please?

[twilight_samurai]

Thats all well and good but how does that assist in the case of the victims of "The Minimum Payment Trap" ? I know of a case that they have had 3500 GBP outstanding since 2003 - when I checked the statements now it still shows 3500 GBP as they have been paying the minimum payments for the last 7 years, it works out 72,00 GBP per month of which only 22,00 GBP is offset against the account balance,

 

[Professor Lone Ranger]

Thats all well and good but how does that assist in the case of the victims of "The Minimum Payment Trap" ? I know of a case that they have had 3500 GBP outstanding since 2003 - when I checked the statements now it still shows 3500 GBP as they have been paying the minimum payments for the last 7 years, it works out 72,00 GBP per month of which only 22,00 GBP is offset against the account balance,

 

 

Please forgive my ignorance but does a minimum payment prevent a greater figure being claimed? It seems to me that if the debtor is a bank or other wealthy body that has the ability to pay more; that body is taking a cynical advantage of the; dare I say it; ignorance; born of the innocence of the long suffering creditor who having established in a court of law, I presume, the existence of the debt, need only apply for what is owed instead of allowing the debtor to take full advantage of the measure that was intended to protect the interests of the creditor but has been turned against them. I am astounded.

[twilight_samurai]

Well Lone Ranger, just to clarify here, the HSBC account holder had a credit card linked to this account - Now I am bringing to a close my fathers financial affairs I am running through his accounts since pre 2003,

 

As to my astonishment it seems that on every monthly transaction a minimum payment was made as required by HSBC of which for every on average 70,00 GBP was paid only 20,00 GBP was actually used to reduce the account balance - the rest was just used as interest payments. Now as this has been going on for the last 7 years to date (probably longer) - I wonder where the law stands once the account holder is deceased ? And what rights we have as family members to request that the account/debt is cancelled or written off

Personally with paying so much interest over the last 7 years it has surpassed the actual amount still owed to the bank by at least 1200,00 GBP

[Professor Lone Ranger]

It seems I have the wrong end of the stick and your father may have been taken advantage of by an unscrupulous bank. Clearly if the credit card debt could have been paid by a bank overdraft as may have been the case HSBC would have been poorer and your father richer, who knows?

 

Good luck with sorting it out

[rdm2006]

I have had a long running battle with Alliance and Leicester (A&L) over many years about bank charges. What rights do I have to ask for access to past records? My main complaint has been the practice of debiting the account before making a credit due on the same day making the account overdrawn triggering the charge for using an overdraft facility I paid a monthly fee for having the privilege of and sometimes making it possible to bounce a standing order or direct debit charge and a letter at £25 to be sent notifying me of that. I have written (by E-mail) to the effect I do not accept that the recent court decision has any relevance to my complaint but have as yet had no reply. I have written to the Ombudsman before and have told A&L I will again if I hear nothing. What is my best course of action now please?

 

 

Look at the link below - it starts off fairly bleak but it picks up in the end

 

http://www.consumeractiongroup.co.uk/forum/general/245835-bank-charges-decision-where.html

[Poor-Credit Borrower]

Lone Ranger, it looks as if your query is being or has been answered by rdm2006, who has supplied the link in his reply (at which I ought to have a re-look myself). I have an account with Alliance and Leicester myself, and I don't think that happens generally. When I get paid automatically into the account and a direct debit is due the same day, the DD generally comes afterwards or if it does come before it doesn't generally trigger a charge. But that may be because I work for a large company - if you work for a small(er) company and they perhaps put in a manual payment for your salary instead of a fully automated payment, this may not be the case. DD's and other debits can occur before 6 in the morning, I think.

 

However, I do think that A&L should have considered refunding the charge or charges at least as a goodwill gesture (although 'goodwill' gestures appear to have gone out of the window during, and probably since, the OFT court case). so just keep claiming, I'd say. Having said that I think I'll claim some charges myself too...

[jdes26]

i have had aletter back today from lloyds saying tough and im going to send an n1 form back next week with a glc poc BANKFODDER can u help me out with interest calc really need ur assistance