Confussed about Interest (again)

[intersimi]

Hi all,

 

I am about to send my "letter before action" off tomorrow. I am yet again confussed about the interest and wording of the 'Letter before action". Perhaps someone could explain this a little more to me (I am sure I am not the only one).

 

I have asked before if the Interest that I should enter on the letter was the interest calculated using the spreadsheet, or the Interest that the bank charges for goping overdrawn etc. The reply was that it was the interest calculated by spreadsheet.

 

It is also my understanding that the spreadsheet only calculated the 8% interest that the court will also allow you to use on outstanding amounts owned.

 

The way the 'letter before action' is worded is this:

 

I calculate that you have taken £XXXXX plus £XXX which you have charged me in overdraft interest for the sum which you have taken. Total £XXXXX

 

I require repayment in full of this money. If you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest plus my costs and without further notice.

 

This is worded such that the interest in question is another type of interest, perhaps interest that charged by the bank and variable, making up the total owed. The next paragraph indicates that 8% would then be added in the court.

[Loula]

Thanks Intersimi for posting this.

 

I, too, am very confused by this wording.

 

LOULA

[intersimi]

Does anyone have any more information on this as there are many of us who are confussed by the wording?

[BankFodder]

The reply was that it was the interest calculated by spreadsheet.

 

Can you point me to this answer please. It is wrong.

 

You only add the 8% interest to your claim when you file it in court.

 

Until that time you only include the charges and the interest which the bank has already deducted from you on those charges.

[ruby]

Hi,

I sent off my firt letter last week to the Natwest. I didn't include any interest, I just specified the charges and stated that it did not include interest. I'm waiting for the 14 days to expire so that I can go to the next step. I'm in the process of filling in the Excel spreadsheeet, but must confess that, I'm stumped by the last two colums. I'm going back 3 years and don't know whether I have to work out how many days have gone by since that charge, whether it includes weekends or whether I put todays date in and it works out how many days have elapsed and then calculates the 8% interest for me.

Does anyone know?

Has anyone else filled in the spreadsheet?

Thanks

[intersimi]

Here is the thread:

 

http://www.bankactiongroup.co.uk/forum/viewtopic.php?p=6994&highlight=#6994

 

So basically, I should ask for the charges back in both of the first two letters (includeing letter before action).

 

Then only include the 8% interest when you file your claim to the court.

 

In that case I do think there is confussion in the letter and should be revised. A few people are having the same problem as myself I feel.

[trundlecat]

Ruby - if you just put the date you incurred the charge into the spreadsheet it automatically calculates the "days since offence" & the interest (enter your date in numerical form with slashes like this "11/10/04" & it formats it for you). So all you need to know is what the charge was for, how much & when, leave the rest to the spreadsheet.

[intersimi]

Ruby, also from this discussion, I gather that you should not fill in the spreadsheet (or at least include the calculation in the letters) until you are ready to go to court and then include the Total sum owed (charges), then your court costs, then your 8% interest.

 

Admins, please correct me if I am wrong.

 

I think I should have done it this way:

 

Sent preliminary letter (Charges listed only)

 

Sent Letter before action (Charges listed only)

 

File court claim (Charges, Interest and Costs listed)

[ispartacus75]

I think I have this right as follows:

 

Prelim letter - Charges + interest they charged you for going overdrawn

LBA Letter - Charges + interest they charged you for going overdrawn

Court Claim - Charges + interest (overdrawn) +costs +8% from spreadsheet

[intersimi]

How did you ascertain what interest they charged you for going over drawn? That would be extremely difficult I would imagine as you would have to check which rate was used for your normal overdraft (as they charge you interest for this), and the interest they charge you for going over your overdraft (as I thought it was a higher rate). Plus, if you "flit" in and out of your overdraft, how would you calculate this?

 

For example. I had at one point, a £10,000 overdraft, which was authorised and I was paying a lot in interest charges per month. Also, at the same stage, I went over this overdraft by about £4000. If I remember correctly, the Interest charges was just lumped together. I may be wrong in this, but as far as I remember it was.

 

Also, you would have to work out what interest they charged you specifically for the charge they applied, not the amount you actually went overdrawn by. They are lawfully allowed to charge you an interest rate on what you borrow. So there is another spanner in the works for the interest to claim back.

[ispartacus75]

I dont have an overdraft on my account so any time I had interest charged to my account it was because charges had sent me overdrawn.

 

In addition to this my statement clearly show interest charged.

 

Using the spreadsheet provided I have input the charges applied to my account and then had the sheet work out 8%. I have also input interest charged to my account and added 8% on that as well.

 

The amounts for the letters comprise of charges and interest charged caused by them taking me overdrawn. If it goes to court I will then add the 8% totals to the claim

[intersimi]

To be honest, I am going to forget about the interest on the charges as it is far too complicated for me to look in to, and just claim back the charges themselves (plus court costs and 8% interest when I raise the case)

[ispartacus75]

where there is an exiscting authorized overdraft I dont blame you. It would take a top accountant to wade through that.

[Spiceskull]

How did you ascertain what interest they charged you for going over drawn? That would be extremely difficult I would imagine as you would have to check which rate was used for your normal overdraft (as they charge you interest for this), and the interest they charge you for going over your overdraft (as I thought it was a higher rate). Plus, if you "flit" in and out of your overdraft, how would you calculate this?

 

This was my original contention with the interest issue, and I have to say I was not left with an understanding. Eventually I thought "what the heck" and just totted up ALL the interest charges on my statements and put that figure in my refund request.

 

My argument to the bank is "provide me with a breakdown and I will re-calculate, or re-calculate and I will probably accept the revised figure." (don't get me wrong, I have not yet given the bank this option...)

 

And as Dave says elsewhere, the banks are entitled to 'something,' and it would show good grace in court if you were to accept that these interest charges are the ONLY thing the bank is entitled to, and that you are therefore prepared to waive this element of your claim.

 

However, as they will not disclose actual cost re:charges applied, stick with the claim for a FULL refund of charges. This is to be my strategy, and I believe that most would agree that it is sensible without appearing greedy. After all, I am reclaiming what I am owed, I am NOT in this to make money...

[intersimi]

Spiceskull, you have made a fair point. I would say in that case, those with no overdraft or one which is very small would probably be in good stead to claim back the interest as shown on the statement and argue that they should provide a breakdown if they would like to refute the amount of interest.

 

As you are all probably aware, most of the time, the dispute is settled out side of the court, on the steps, so to speak, so it would be up to you to agree or to not agree the final figure.

 

Like you say, I also beieve that the bank is entitled to make money, otherwise, they would cease to exist as we know them. All I wish is for my unlawful charges to be returned. If there was a simple way to calculate the interest charged on those charges, then that would be terrific, however, there is not, so I will leave this part out of my claim.

 

Many thanks for the replies by everyone concerned. I hopw this makes things a little clearer for those who were also in the dark like myself.

[Spiceskull]

I wouldn't leave the interest out of your claim - leave it in. That way you have leverage, and the opportunity to display goodwill at a later stage. If, in the meantime, the bank can demonstrate exactly why your calculations are wrong, pay heed, and decide on the merits of their response.

 

At the end of the day, you haven't claimed anything that can be 'enforced' until such time as you get to court...and we all know how many times that happens.

[Loula]

Thanks intersimi for raising this issue.

 

I am now clear as to my position and way forward. Also for your post on LTSB page with your letter, which I will use also (assuming no copyright applies -lol)!

 

Thanks also to everyone else who commented on this thread.

 

I love how everyone is working together!

 

LOULA

[Mal]

The problem is that your overdraft you agree to is at about 18% when you ‘borrow without agreement’ that shoots up to 29%. Now if the only reason you are overdraw is because of charges then, in theory the bank have made 'unjust enrichment' but if the bank had paid your DD’s then they would have a legitimate’ish reason for charging the higher amount till you account is back within limits.

 

Now we all know that if the bank had paid your DD’s let you go over your limit, wacked your for high interest but you then bring your account down within it limit none of us would be here, but instead we are getting hit from all angles, Charges (That more than often come to more that the DDs would have cost to pay), and an interest rate from hell, charges for going over your limit and we all still have the bills to pay and all the charges they make too

 

IMHO Most of us are in this boat because the when you live close to your monthly budget, they milk us like cash cows, knowing that we will get more and more into debt so they can sting us for loans with PPI to clear OD’s that we only have to pay the banks charges then they start all over again

 

It would be great it we could say ‘pay me back all my interest too’ but I think any bank would fight tooth and nail not to pay it back as when you break it down interest should be the only way banks make money plus it is also almost imposable to work out how much to claim

 

Mal

[Spiceskull]

All the more reason for keeping interest charges in the claim. If they want it back they will need to demonstrate to a court that they are lawfully entitled to it.

 

However, if they do offer to recalculate the interest element, and demonstrate it's constituent elements to you, I, personally, would feel morally obliged to agree to adjust that part of my claim.

 

However, I would still make clear my intent to press for a FULL refund of the charges, so they will either pay up or go to court anyway...

[choco]

I dont have an overdraft on my account so any time I had interest charged to my account it was because charges had sent me overdrawn.

 

In addition to this my statement clearly show interest charged.

 

Using the spreadsheet provided I have input the charges applied to my account and then had the sheet work out 8%. I have also input interest charged to my account and added 8% on that as well.

 

The amounts for the letters comprise of charges and interest charged caused by them taking me overdrawn. If it goes to court I will then add the 8% totals to the claim

 

so does mine!! and i have spent too much time reading and reading what other people think with regards to claiming back interest, when on the advance spreadsheet it breaks it down for you so simply, the problem is I think this is a classic case of too many cooks.... because some people are giving the wrong advice... the instructions on the advanced spreadsheet say it all, and as my statements clearly say what my interest is I will be adding this in!

[choco]

I wouldn't leave the interest out of your claim - leave it in. That way you have leverage, and the opportunity to display goodwill at a later stage. If, in the meantime, the bank can demonstrate exactly why your calculations are wrong, pay heed, and decide on the merits of their response.

 

At the end of the day, you haven't claimed anything that can be 'enforced' until such time as you get to court...and we all know how many times that happens.

 

good point....

Have you done your claim as yet?? Judging by the date of your last post in this topic i'm guessing you have?

[Perseus]

Hope you don't mind me subscribing to this thread.

 

I've recently submitted my claim to Abbey bank account, requesting Contractual Interest on the whole thing.

 

I agree that there are so many threads and suggestions about how/when to apply interest to prelims or claims, it does become confusing and daunting.

 

Using experienced contributors letters on here, I ascertained that in the abscence of Abbey providing proof of their 'liquidated damages' for every breach (unauth overdraft/returned direct debit etc), the charge is unenforceable. Therefore the whole charge in my opinion should be reclaimed under mutuality and reciprocity (using the principle from the Unfair Terms in Consumer Contract Regs 1999) (you do to me/I do to you) and claimed their unauthorised rate of interest (29.7%) for them withdrawing money from my account without permission or a proven basis for doing so.

 

If it goes to court, I'll file for the contractual interest at unauth rate.

In the alternative, I'll claim the lesser rate at authorised rate (15.9%), and if all else fails, in the alternative, I'll request section 69 intrest at 8% simple interest.

 

If the bank in question know you know your stuff, or are determined to see it through to the end (Court) they will seriously consider the initial request if they believe you will stick to your guns.

 

I wish you well in your case

 

Perseus

[intersimi]

This topic was closed on 03/07/19.

If you have a problem which is similar to the issues raised in this topic, then please start a new thread and you will get help and support there.

If you would like to post up some information which is relevant to this particular topic then please flag the issue up to the site team and the thread will be reopened.

- Consumer Action Group