Nationwide Victory

[bobegerton]

See letter that I am sending to Nationwide:

 

Mr Philip Williamson, Chief Executive

Nationwide Building Society

Nationwide House

Pipers Way

Swindon SN38 1NW

 

PRIVATE AND CONFIDENTIAL

 

Dear Mr Williamson

Ref: Gary Clay vs. Nationwide Building Society

I am writing to ask you to cease the practice of imposing penalty charges on your customers when they breach their contracts with you. You should be aware by now that the contracts into which your company enters with your customers, both for current accounts and for credit cards, contain clauses that, if tested in the courts, would be found to be penalties and, therefore, not legally enforceable.

The law on this subject is clear. Any clause that seeks to impose automatic damages on a party in breach of contract is only enforceable if it is construed as liquidated damages. If the sum of money set as payable is disproportionate to the loss likely to be sustained by the other party, then the clause is deemed to be a penalty and is, therefore, unenforceable. I will not bore you with a list of the cases that support this proposition, because I am sure that, by now, you will have been briefed on this subject by your legal advisers.

I have held accounts with Nationwide for over 40 years. I have remained with Nationwide because it is still a mutual society and I believe that this is inherently a better business model than that of a typical bank plc. Therefore, it is particularly disappointing to find that Nationwide is applying unlawful charges in just the same way as the banks.

Nationwide was due to face Mr Gary Clay in Hull County Court on 14 February to defend a claim made by Mr Clay for recovery of unlawful charges. You filed a detailed defence including a long witness statement. You had appointed solicitors. You had clearly incurred significant costs in preparing for the day in court. I have been involved in a consumer campaign for the past year against these type of charges and I booked a day off work and a night in the Travelodge Hull so that I could be with Mr Clay to assist him with his case.

On 9 February, you totally capitulated and paid up rather than face Mr Clay in court. Your solicitor’s letter claimed “The cost to Nationwide of arranging representation at the hearing makes it uneconomic for us to continue to defend the claim. For this, and no other, reason I am instructed to settle your claim in full.” This is a preposterous statement. You had already incurred costs and the additional costs of appearing in court would have been relatively minor. I know that the reason that you did not go to court was because you feared that you would lose in open court and your whole charging structure would be blown out of the water; Mr Bacon, who wrote the letter, knows that this is the case; you know that this is the case. But you chose to sanction this letter to be written. I would expect that sort of unashamed hypocrisy from the chief executive of a plc answerable only to his shareholders. It is very sad, and doubly hypocritical when it comes from a man who said in an interview with Personnel Today just one month ago, “As a mutual organisation, our customers own us so we have a unique opportunity to say to them every day: 'I guarantee I only work for you, because we don't have shareholders’.”

In a further act of spiteful vindictiveness, you have now given Mr Clay notice to close his account. You do not have the guts to fight your case in court, but you have all the courage of a playground bully who kicks the small kid when the teacher is not looking.

Fortunately for your customers, you are answerable to them and you will be so at the society’s AGM. I look forward to seeing you then. That is of course is if you have not closed all my accounts by then and expelled me from your members’ club.

Meanwhile, before the AGM, Nationwide will have been sued by other members over the same issue. No doubt you will adopt the same pathetic tactics of disputing the claims, saying you are going to defend the cases, then failing to turn up in court.

If you have any conscience at all, now is the time to answer its call. Admit that the charging structure is wrong, change it, and recompense all of those members who have been disadvantaged by it. If you do so, you will earn the respect of your members and be a beacon of good practice in an industry that is generally institutionally dishonest. If you do not do so, the consumer campaign, plus the tardy OFT, will eventually bring about the overthrow of this unlawful system and you will be tarred with the same brush as all the banks. People will then ask, “what was the point of a mutual society, it is just as bad as all the other crooks?”

Please do not insult my intelligence, nor dig your career into an even deeper hole, by replying to me and claiming that you are advised that your charges are lawful.

Yours sincerely

Bob Egerton

[bobegerton]

See letter that I am sending to Nationwide:

 

Mr Philip Williamson, Chief Executive

Nationwide Building Society

Nationwide House

Pipers Way

Swindon SN38 1NW

 

PRIVATE AND CONFIDENTIAL

 

Dear Mr Williamson

Ref: Gary Clay vs. Nationwide Building Society

I am writing to ask you to cease the practice of imposing penalty charges on your customers when they breach their contracts with you. You should be aware by now that the contracts into which your company enters with your customers, both for current accounts and for credit cards, contain clauses that, if tested in the courts, would be found to be penalties and, therefore, not legally enforceable.

The law on this subject is clear. Any clause that seeks to impose automatic damages on a party in breach of contract is only enforceable if it is construed as liquidated damages. If the sum of money set as payable is disproportionate to the loss likely to be sustained by the other party, then the clause is deemed to be a penalty and is, therefore, unenforceable. I will not bore you with a list of the cases that support this proposition, because I am sure that, by now, you will have been briefed on this subject by your legal advisers.

I have held accounts with Nationwide for over 40 years. I have remained with Nationwide because it is still a mutual society and I believe that this is inherently a better business model than that of a typical bank plc. Therefore, it is particularly disappointing to find that Nationwide is applying unlawful charges in just the same way as the banks.

Nationwide was due to face Mr Gary Clay in Hull County Court on 14 February to defend a claim made by Mr Clay for recovery of unlawful charges. You filed a detailed defence including a long witness statement. You had appointed solicitors. You had clearly incurred significant costs in preparing for the day in court. I have been involved in a consumer campaign for the past year against these type of charges and I booked a day off work and a night in the Travelodge Hull so that I could be with Mr Clay to assist him with his case.

On 9 February, you totally capitulated and paid up rather than face Mr Clay in court. Your solicitor’s letter claimed “The cost to Nationwide of arranging representation at the hearing makes it uneconomic for us to continue to defend the claim. For this, and no other, reason I am instructed to settle your claim in full.” This is a preposterous statement. You had already incurred costs and the additional costs of appearing in court would have been relatively minor. I know that the reason that you did not go to court was because you feared that you would lose in open court and your whole charging structure would be blown out of the water; Mr Bacon, who wrote the letter, knows that this is the case; you know that this is the case. But you chose to sanction this letter to be written. I would expect that sort of unashamed hypocrisy from the chief executive of a plc answerable only to his shareholders. It is very sad, and doubly hypocritical when it comes from a man who said in an interview with Personnel Today just one month ago, “As a mutual organisation, our customers own us so we have a unique opportunity to say to them every day: 'I guarantee I only work for you, because we don't have shareholders’.”

In a further act of spiteful vindictiveness, you have now given Mr Clay notice to close his account. You do not have the guts to fight your case in court, but you have all the courage of a playground bully who kicks the small kid when the teacher is not looking.

Fortunately for your customers, you are answerable to them and you will be so at the society’s AGM. I look forward to seeing you then. That is of course is if you have not closed all my accounts by then and expelled me from your members’ club.

Meanwhile, before the AGM, Nationwide will have been sued by other members over the same issue. No doubt you will adopt the same pathetic tactics of disputing the claims, saying you are going to defend the cases, then failing to turn up in court.

If you have any conscience at all, now is the time to answer its call. Admit that the charging structure is wrong, change it, and recompense all of those members who have been disadvantaged by it. If you do so, you will earn the respect of your members and be a beacon of good practice in an industry that is generally institutionally dishonest. If you do not do so, the consumer campaign, plus the tardy OFT, will eventually bring about the overthrow of this unlawful system and you will be tarred with the same brush as all the banks. People will then ask, “what was the point of a mutual society, it is just as bad as all the other crooks?”

Please do not insult my intelligence, nor dig your career into an even deeper hole, by replying to me and claiming that you are advised that your charges are lawful.

Yours sincerely

Bob Egerton