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

[BankFodder]

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.

[BankFodder]

If CAG is going to encourage people to go down this route, it will have to be accompanied by either an easily understood method or to have an entire team of knowledgeable helpers

 

Yes, a lot of people are going to need help to do this.

 

However, the amount of money at stake is very high.

 

It is very difficult to explain in a forum situation. I think that if enough people get into the discussion then the understanding will grow and the method of explaing will develop.

 

What is absolutely unassailable is that if the charges are unlawful, then any interest which you have paid on the charges is also unlawful.

 

The banks must not be allowed to get away merely with repaying the charges and not the interest which they have taken.

Make no mistake, they will try to do this - and I can imagine that any FSA agreed repayment scheme will conveniently try to get away with merely repaying the charges.

[BankFodder]

Don't forget, that in order to claim the interest which you have paid on the charges - you don't actually have to do any interest calculations yourself.

 

It is much easier than that.

 

You simply look at each statement, add up your charges but also you look at the figure for overdraft interest as well.

 

Th trick is in recognising how much of that overdraft interest figure is being applied to charges that month and the previous months.

 

Of course, the overdraft interest figure will also apply to overdraft interest which has been added to your overdraft in previous months too. This is why it will add up to such a large amount of money.

 

However, once your accumulated charges and interest become equal or greater than your overdraft, then it becomes easy because at that point, all of the overdraft interest is yours and you can claim it back.

 

So the fiddly bit lasts only for as long as your overdraft (the money you owe them) is greater than your charges and charges-related interest (the money they owe you).

 

For most people, who start getting charges, this point - when you become the creditor of the bank, happens pretty quickly.

 

Most people will be amazed how much they have actually spent servicing the banks' greed.

People should stop feeling at all guilty that they might have mismanaged their affairs.

It is the banks which have mismanaged their own affairs but they have managed to con their cusomers into taking the blame - and also into paying the bill.

 

Most of the people who visit this forum are creditors of their bank.

[BankFodder]

Micheal, the "someone else" being a judge, because should the bank argue that the figures are wrong, how is "joe bloggs" going to argue contractual as opposed to statutory and justify the figures and amounts if they already have a legitimate overdraft which they use and claim interest on charges. This has to be done clearly to a judge. I understand the concept, but the judge would undoubtedly go with charges + 8% s.69(or the KISS principle).

This has nothing to do with contractual interest. Furthermore, it doesn't exclude statutory interest.

 

The principles are completely basic - you are merely claiming back what has been taken from you. No more and no less.

Then if the bank won't pay on demand, you begin a court claim and add 8%: a very nice little earner.

[BankFodder]

Actually it all has a delicious irony.

 

thebanks themselves through their greed and ineptitude have brought the economy to its knees. The interest rate is at an historic low. S.69 interest continues at 8% which means that it is extremly high.

 

Your best investment is to have your charges with your bank and your county court claim running.

 

Because of the gross injustice of the FSA waiver, the banks' debt to their customers is on hold but carries increasing at 8% per annum.

 

You would never dream of getting such incredible value for money.

 

This is why you should start your claim in the county courts right now. Don't waste time.

 

calculate your charges. Calculate the interest they have charged you on those charges - because any overdraft you had was probably your own money anyway.

Then write to the bank and give them 7 days to cough up.

Then add your 8% - backdated and sue them.

 

The banks are so stupid they will get your claim stayed - but that''s OK because you will continue earning 8% until they decide to pay you out.

 

The boorish blindness of the UK banks is so extreme that they don't seem to have figured out that with today's interest rates so low, it would pay them to give you your money back right now before the claim is issued because in that way they will avoid having to pay you a very high rate of interest.

[BankFodder]

The main purpose of my posting as hard as I am doing on the issue of charges-related interest is because I realise now how few people are actually going to the trouble of claiming it.

If you have included it in your calculations then obviously I am preaching to the converted.

Of course, it is everyone's choice to decide how much work they want to put into it.

 

However, I am concerned that many people are completely unaware of what they have lost to their banks in the name of "reasonable and transparent" charges and the associated interest on those charges.

 

I feel that if they at least understand how much it is they have lost and how to work out the figure then they can decide what they want to do about getting their own money back.

Edited May 31, 2009 by Rooster-UK
Typo.

[BankFodder]

One important thing to appreciate is that there are NO interest calculations.

 

You don't have to calculate 29% per annum of anything.

You simply highlight the overdraft interest figure on each statement.

You then have to know how much they have taken in charges so far.

Work out what proportion of your overdraft those charges are - one third, one half.

Then you add that portion of the overdraft charges for that month to your claim.

 

 

It really is easy - just a lot of work to begin with - and then suddenly it gets awfully easy because there is scarcely any work involved at all.

 

 

For instance you are overdrawn £2000

charges seized so far £300

therefore 15% of your overdraft is actually your own money, so you want it back.

 

Overdraft interest for that month £30

15% of that interest has been charged on your own money, so you want that back too.

15% of £30 = £4.50

 

So you add £4.50 to your charges and interest total so far

 

Move on to the next month and repeat the exercise.

 

Overdraft £2000

overdraft interest is £30

last months charges+interest = £304.50

this month's charges = £150

total interest and charges to date= £454.50

£454.50 as a portion of £2000 = 22.72 percent

22.72% of £30 = £??? - nearly £7

total accumulated charges and interest for this month = £454.50 + (nearly £7)

 

go on to the next month and repeat for each month until the present day.

 

It is exponential so within a few months your total charges and interest figure will be equal to your overdraft.

 

After that you never need to calculate percentages again.

You just add the overdraft interest for every month to the accumulated charges total. It becomes child's play.

It also becomes a shed-load of money

[BankFodder]

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.

[BankFodder]

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]

Hi,

 

One of the benefits of 'Halliday v HBOS' is that Mr Justice Underhill said quite clearly what you are entitled to:

 

 

 

This is a binding ruling of the High Court which County Court Judges MUST follow.

 

The figures in Halliday were calculated using 'vamps' spreadsheet discussed above and were accepted by the Judge.

 

Dad

Absolutely.

The only difficulty is reminding people to include their interest paid or to convince them that it is worthwhile

[BankFodder]

Sorry, but no they haven't, and I am a bit surprised you should say that, maybe you should re-read the OFT statement of april 06? ;-) In fact, the OFT very clearly stated that their "threshold intervention" of £12 did NOT mean that a charge of £12 was fair and they very specifically said that ONLY a court could decided what constituted a fair charge, therefore:

is factually very incorrect and as far as I can see, as long as people know to claim it all back, the CC pay it all back. Oh sure, they TRY to say that they don't have to repay it all but if people stand firm, they do get the totality of it back. Speaking for myself, I have had both higher and £12 charges back from Barclaycard and Capital1 (+ interest levied on those charges + s.69, of course), and I am not aware of CC companies going to court to argue the toss (apart from Citi maybe, but let's face it, they always were awkward beggars ).

 

 

To be fair, generally mainly if the claim is placed through MCOL, then again, I don't doubt some judges can't see the difference or can't be bothered to.

 

So my summary would be at odds to yours and I'd encourage people to keep on claiming the totality of their CC charges, whether be the £12 or more and stand firm and when the CC companies try to negotiate for the difference, confront them with the April '06 OFT statement as quoted above. And don't forget to add the interest on those charges, of course.

 

You are quite right. My mistake. The OFT capped rate was the threshold rate.

 

However I fully expect that after the Test case, that the banks will argue - and that the courts will accept that the OFT threshold should also be treated as the fair rate.

 

We have yet to see what the OFT fair rate for bank charges will be. If it happens to be £12 then I expect that the CC cap will become the defacto fair rate.

 

I'm all for everyone claiming everything and pushing as far as possible - hence the existence of this site.

 

However, up to the beginning of the test case there was an exquisite madness which took the banks and the courts by suprise. No one tried to control it bevause no one expected that it would get out of hand in the way that it did.

 

Now that some calm has been imposed on the situation, I am sure that they won't want it to getout of hand again.

 

In particular, the courts have said that UTCCR applies and that penalties do not.

 

This gives a structure which was never apparent before. I don't expect that the OFT or the banks or the courts will want to let go of this.

 

I'm not aware that a fair rate under the UTCCR can't be assesed by the courts. It is not the OFT which has exclusive authority to do this. In fact the OFT fair rate is really just a recomendation - but which you can be certainl will be accepted by the courts unless thee is some real evidence to the contrary.

 

If the OFt bank charges rate is set at less than £12 then the CC companies will keep very quiet.

If the OFT chargs rate is set higher than £12 then there will be bleating by the CC companies for the OFt to re-assess the rate.

 

Anyone who has been charged more than £12 CC charges should go and claim back everything - including related interest.

However, I don't expect that charges which have been levied at the £12 rate will be recoverable anymore.

 

However, do go ahead and try. I think that £12 is still very excessive and I owuld be very pleased if people succeeeded in getting this money back too

[BankFodder]

I'm not sure that there will be a cut-off date but I can imagie that if a repayment scheme is put in place - then there is likley to be some kind mechanism to encourage people to use the repayment scheme.

 

In that case you would have to look for a good reason to being a court action.

This could be that your figures are different to the bank's ones or that in some other way the bank is trying to limit your claim and you need the question resolved by the bank.

One way of encouraging people to go directly to the bank for refunds wuld be to offer very quick settlements.

So for instance, the banks might promise repayment within, say, 4 weeks.

 

this would be at least 2 or 3 months ealrier than using the court process.

However, the downsid might be that there is no provision for an equivalent of the 8% statutory interest, the bank might only offere the difference betwenn the charge and the OFT fair charge, the bank migh only offer repayments back to 2001 (6 yrs from test case) etc.

 

It is all very difficult to predict. Also, although the HoL is very likly to come down on the side of the OFT, they may frame their judgment in such a way which might limit the way in which repayments are made.

 

The Lords are no slouches and they could easily predict certain repercussions to a successful OFT judgment which the banks themselves have not yet appreciated. there is no doubt in my mind that if there is a simple decision in favour of the OFT then things are likely to become more dramatically serious for the banks than anyone could yet possibly imagine.

Say, n'more.

[BankFodder]

Positive balance interest suggests contractual interest.

 

I tried to get this idea going a couple of years ago but I don't believe that it is a runner at the moment.

I know that some of the site team disagree and think that there is now a basis for contractual interest - or equivalent.

 

For the moment I would suggest that people merely produce claims for actual charges and interest taken from them. This will be fine for the moment.

These claims will go on hold and they can always be amended when the HoL rules and the stays are lifted.

 

It will then become clear exactly what is claimable and what is not.

[BankFodder]

I think it all comes down to the manner in which the charges etc are reimbursed.

 

If the charges etc are allowed to stand then they are reclaimed at the point in time that the case is found. i.e. the balance is correct and an adjustment is made via the payment in refund.

 

If the charges are amended to a prescribed value/ removed, then this is done at the time the charge was applied. This affects the balance at that time.

 

Since the arguement is that the charge be removed at the time it was applied - it would need to be in order to reclaim the charged interest, since amendment after the fact would not impact on the charged interest. Then there is an arguement that to remove the charged interest at the time must result in an alteration of the balance at that time which must affect the paid interest.

 

I am curious why Bankfodder would think otherwise.

 

I'm also new to this discussion and could be talking utter tosh, of course.

Sorry, don't understand this

[BankFodder]

Since the general opinion is that paid interest, as opposed to charged interest, cannot be claimed, then this is irrelevant.

 

What I was trying to say is that the effect on paid interest would differ depending upon how the charges were paid back. In theory, however, this could also affect charged interest.

 

The question is:

 

Would the refunded charges be credited to the account at the time of judgement or would they be credited to the account at the time of deduction. Would the charges be refunded or amended?

 

I've not had much to do with bank charges claims as I was late starting my claim and got stayed on one claim but have only given notice of intent on another claim. I may be talking rubbish, in which case, be kind to me .

I very sorry but I still don't understand. I do hope that it is not some important point which I've missed.

What is paid interest as opposed to charged interest?

As for crediting charges to the account, I think that this can only happen if the account is comprised of some legitimate enforceable debt. The refund could then be credited to the account by way of a set-off. Is this what you are referring to?

I don't understand what you mean by the time at which refunds would be made.

As far as amending charges - are you referring to the possiblity of merely refunding the difference between an OFT fair rate and the charge? If so, then I don't see any power under the UTCCR for this to happen.

Once the charge is invalid, it fails completely

[BankFodder]

The bottom line - is simply that if you have suffered unfair charges - then claim them back.

If you have also been charged interest on those charges - whether at the authorised rate or at the unauthorised rate - claim that backtoo.

 

There are very few caculations needed. the interest taken from you will be clearly identified on your statements - probably as overdraft interest.

[BankFodder]

I claimed charges back from Halifax and added the 8% interest. That was in 2006. I now have more charges on my account and have sent the first two letters and I am about to issue the N1. My question is did I add the correct amount of interest as I didnt really understand the contractual interest so only added the 8% from the spreadsheet and can I add this on to the new claim or is it too late for old claims?

 

If you have already claimed back charges but didn't claim back the interest on those charges then there is nothing to stop you going back, calcualting all of the interest which was levied on those charges and starting another claim.

If you had to take it to court, you would add 8% interest to that too.

 

Don't forget. this is interest which they have actually taken from you.

 

We are not talking about interest which you have decided to charge them for the use of your money. That would be something different and it is called "contractual interest".

[BankFodder]

Yes, claims will be stayed - but if you put them into the County Court, at least they will be earning 8%.

 

Also, once again, a staggering number of people seem not to be bothering about claiming back the interest which they have also paid on the charges which have been taken from them unlawfully.

 

This adds up to a lot of money for the claimant - or a significant benefit for the bank if you don't bother.

 

Go for every penny. you worked for it and it is yours.

 

If you don't claim it, it will only be spend on bonuses, excessive pension deals, fancy executive expenses etc.

Is that what you want?

[BankFodder]

As long as you have actually paid that money over to them, then yes you can claim it back.

[BankFodder]

To claim back interest paid on £679.98 from Dec1996 - 1st June 2009 =

 

 

8% (Statutory) = £1356.31

32.60%(APR) = £38,400.24

 

Will claim for the higher amount !

 

I think that you may have misunderstood what is being said here.

 

If you have merely applied the interest rate to your charges, then this is contractual interest and I don't expect for a moment that you will be able to claim the figure you have mentioned.

[BankFodder]

My original claim for charges was 2000-2006. When I start the new claim can I only claim 2003-2009 interest? Also will anything be different on the poc as I will be claiming interest from the old claim as well as a new claim?

 

I don't altogether understand what you are asking. however, ther is a goo basis for claiming all the way back to 1995.

 

The POC should be straightforward

 

You simply claim for the return of charges and interest payments levied by the bank on those charges which are unfair inthe UTCCR as per attached schedule.

 

You then make sure that your schedule shows the amounts which were taken from you and the date they were taken.

 

Your schedule should also include 8% statutory interest and show that the 8% has been correctly applied to the charges and interest as they have been taken from you since the year 2000 or whenever you are claiming from.

 

Make sure that all of the figures check out and that if the bank does decide to defend, you can point to any one of the sums on your schedule and refer the judge to your statements or other account info which you have received from the bank

[BankFodder]

This refers to interest of £679.98 on a 'consolidated loan' taken out in 1996. I will ask for 32.60% but expect settlement at 8%.

 

But on what basis are you asking for this high rate of interest?

 

You will undermine yourself if you ask for unrealistic remedies which have no hope of success.

[BankFodder]

Sorry Bankfodder. Confusing myself here too. What I meant was can I issue the new claim for new charges plus interest from 2000 to 2009? I thought you could only claim back 6 years.

 

Claim back to 1995. Let them challenge your cliam on the basis of limitation. We will be able to provide you with arguments to support a clam back to 1995

[BankFodder]

I would say that claiming back to 1995 on bank charge is a 95% certainty.

 

CC charges - maybe 65%

 

I would say that it would be very well worth making the claim. You can always amend later

[BankFodder]

Valhalla - this is a business account and may not be subject to repayment of charges. The position is unlcear but it seems unlikley at the moment