NORTHERN IRELAND: Banking dispute/debt recovery process

[The Aud1]

I reside in Northern Ireland and am looking for some insights on the following.

 

In November 2007, we took out a £65,000 secured overdraft, agreement signed in February 2008. This was a one year Agreement.

We requested a further increase on this in June 2008 but were declined until we repaid the above when they would review our account.

We repaid in July 2008 (in full, as per our Agreement) and sometime in October 2008 my husband remarked that they had obviously extended our overdraft.

In June 2009 we met with our bank manager to discuss repayment. We explained our difficulties and it as left at that.

We kept in touch via email updating her.

In January 2010 our overdraft was abruptly stopped and we were hit with major bank charges which actually caused the overdraft exceeding its limit.

We received a letter that they needed us to repay immediately.

We called our branch manager re bank charges etc and she informed us that they had just become aware that they had extended an unauthorised unsecured overdraft.

For a period our account was frozen and my own account was then subject to penalties previously never applied, a cheque for £64.00 was returned despite being covered by a cheque guarantee card and funds being in the account.

We offered a repayment schedule (unacceptable) and a promisory of paying balance when property was sold (unacceptable).

June 2010 Letter from solicitors - we reply reiterating our proposals

July, August, - nothing (we were told by CCCS a court date could take 3/4 months)

In July I lodged a complaint with Financial Ombudsman citing undue care and diligence by Bank and whilst we do not dispute liabilities they should bear some responsibility for their error.

Letter from their Customer Care in September stated whilst they admitted their error the responsiibility was with us and state that the account was been managed by Asset Recovery Unit.

Sept 17th (day after letter) a Custody Warrant stated that Court had been held on 9th August and a CCJ recorded.

October 7th OCL issued and registered.

We have of course put a stay on proceedings, informed F.O. and are now trying to hire solicitors via Legal Aid (so as to not to incur further debt)

 

Creditors Solicitors state that a letter and Special Writ of Summons was sent to us at the correct address on 2nd July. We did not receive it as we would have most definitely lodged a defence but apparently this is not reason to overturn as summons is taken as served once put in a envelope and posted?

 

Again, they said that they sent a letter on 11th August informing us of judgement. 100% not received either.

 

It is indeed strange that two separate pieces of pertinent mail have gone missing but I am prepared to go on Oath to swear that they never arrived with me however Oath taking absolutely pointless, I believe I n the past we responded (at length) to any correspondence re this debt.

 

Have I got a case. I do know that High Court Debt Proceedings are merely paper signing and the majority of cases go undefended but surely the 1% of us must have the right to do so?

 

I really need some help on this beginning to despair as many views but no replies. The tiniest bit of direction would be appreciated.

Edited October 23, 2010 by The Aud1

[IdaInFife]

hiya and welcome to cag,

 

Sorry this has went unanswered without any replies but will see if we can get a few to look in

 

Ida x

[vjohn82]

Hi,

 

I'll try and advise where I can.

 

I'm confused with this:

 

"We repaid in July 2008 (in full, as per our Agreement) and sometime in October 2008 my husband remarked that they had obviously extended our overdraft."

 

then

 

"In June 2009 we met with our bank manager to discuss repayment."

 

Are you saying you repaid your O/D in July '08 but then went up to your limit again in October '08... then discussed the repayment of it in July '09?

 

Are the bank's solicitors now forcing the sale of your home?

 

From what I can tell you do not necessarily have a defence for the following reasons:

 

1) You admit liability for the debt

 

2) You failed to contest the original CCJ with no other reason than not receiving the summons at an address where you were living (you would have a case if for instance it was posted to the wrong address)

 

The only way in which a Judge would overturn a CCJ is where there is a reasonable prospect of a defence. If you have none, and admit liability, the Judge will see the granting of the CCJ as a mere formality.

 

The only potential defence you have is if the balance they sought was made up of punitive charges but this leaves you trying to prove that you never received the summons.

 

Do you have any other reason why you would have been unable to defend the proceedings such as mental health difficulties/hospitalisation etc?

[The Aud1]

[/i[/yes we repaid in full as per our Agreement in July 2008. We always ran an overdraft and met to have it reviewed in July 09. The Bank only checked it in Feb 2010 when it had reached its original limit (the limit we repaid in 2008).

 

Of course I admit liability how can I not. It is the course of action that the bank took since realising their mistake and their undue care and negligence that allowed it to get there.

 

We had responded promptly and at length to all correspondence so we would have not cried wolf at this stage of not receiving a summons and incurring more charges.

 

I have a solicitor working on it now. What would be the point of using a defence such as hospitalisation (which I am not doing) if as you say its open and shut viz a viz admission of liability and the impossible task of onus of receipt of summons. It is not liability that I want to overturn but the manner that the Bank have acted after being offered voluntary charge on our home and repayments. I am not afraid of a sale being forced as that is something that could never happen.

 

I do appreciate your repay though. I do know its confusing but just looking for some insights on this I need to see the summons first to ensure that is was posted to the correct address etc.

[vjohn82]

In terms of raising the issue of hospitalisation etc; this is not a defence but it could potentially be grounds for removing the original CCJ and then having the case heard. The other proviso is that you have a defence which the Judge would accept as having a "reasonable prospect of success". Therefore if the CCJ was based upon penalty charges this could be grounds for a defence to the original action. My previous post was to simply suggest ways in which you could overturn the CCJ and give you some ideas on how this would be done.

 

Anyway, if you have a disagreement with how the bank has operated then I would advise researching the Banking Code, find any points which might be relevant for proving that they have acted unreasonably and then complain to the Financial Ombudsman. This seems your most likely port of call from here on.

[Murphy69]

Hi

I am worried about your statement - "I am not afraid of a sale being forced as this is something that could never happen" You say you have a ccj registered, that means that your creditor can now go back to court and get a charge on your property which could potentially result in a forced sale. This is following on from you saying that you offered a voluntary charge on your property which would mean that you obviously must have it in your name to be able to offer the charge. My point is to be vigilant and as suggested above, start looking for any opportunity which might enable you to go back to court to challenge the ccj.

To get legal aid in N.I. the rules are very simple, unless you can prove your combined income is somewhat shy of £10000.00 or you are on Job seekers allowance, legal aid will not be granted. previously legal Aid would be automatically granted if you were in receipt of FWT credits but not anymore so beware of the income limits when filling out any legal aid application forms. They will also require copies of your bank statements, Rates bill and income/expenditure as wells as your last set of accounts. You might as well get all of these together now as they will be looking for them any how.

First challenge the legality of the ccj as this is an absolute priority.

Good Luck

[The Aud1]

[/sizeThank you VJohn & Murphy. liked some of your points. Appreciate vigilance regarding house but right now there is no market whatsoever in Northern Ireland especially for the type of property I have. I have the case with the Financial Ombudsman but from what I read here they have little power but must wait and see. Actually I had thought that this , their ongoing investigation, should have halted legal proceedings until at least they had investigated. It also biases the case as the F.O. have no power once it has gone to a court of law. However, they are holding off until the CCJ is sorted. I just hope I am not wasting my money on taking on a solicitor as money is very tight indeed if the case is indefensible i.e. open and shut. The debt has risen £5k since May in interest charges alone plus legal costs. I have asked for a breakdown. We did have exorbitant penalties thrown at us once they discovered their mistake (up until them we had a very good relationship and until the downturn one of their prized customers - what a joke!).

[The Aud1]

Got an email on 25th October from creditors solicitors reiterated that they had sent the summons, franked and with a return address. Then after going through that the ccj had been registered, they then demanded that we settle the debt within 30 days or make acceptable proposals to do or that their client will be forced to inform credit reference agencies. This sounds idiotic, a ccj is sufficient to black list you and credit right now is the last thing on our minds. Can't understand this as they know we are appealing and have a case with the F.O.

[caro]

Is interest still being added? The CCJ will be for a certain amount, and normally they should not be adding interest and costs to that.

 

Have you put in an application to have the CCJ set aside?

 

Have you managed to get legal aid?

 

What is happening regarding your complaint with FOS? I would say that your complaint to them is different to the legal case, so could still be followed up.

 

I would agree that you shouldn't be too confident about a sale not being forced on your property. Even if a sale didn't realise the amount of the debt, it might be sold for a lesser amount and you could still be held responsible for the shortfall.

[The Aud1]

I am not worried that a sale will be forced. The value of my home (in todays market not c.2007) is about 1/20th of the actual debt. I have tried to sell it, without remote success primarily to relocate. I would welcome a sale so that we could relocate. In the event that such a sale was forced I would be able to offer other assets. To my knowledge the EJO in Northern Ireland work with families, and do not make children homeless unneccessarily. The enforcement of a sale was not the reason why I did the post but I appreciate that this may be the overriding concern of caggers. Believe me I am not naive and do know that even the most insignificant creditors can be the most ruthless.

 

My solicitor is working to set aside the CCJ. All other proceedings are on hold. It was the F.O. who stated that they cannot interfere with a court of law ruling. I have prepared for legal aid (as suggested by Murphy69 - thanks again).

 

Thanks for your interest

[caro]

That's right. FOS can't be involved where the court is involved but it seemed like a different matter, but I guess the misselling may come into your defence.

 

Sounds like you have everything in hand.

[The Aud1]

Debt creates fear, fear is reactive but transformed into a concern it gives you back control and allows you to address it more proactively.

Fear creates a block that creates chaos (in an already chaotic mess). Debt is a blip, not a castastrophe, don't underestimate the problem but refuse to give into it.

I try to live by this philosophy but I have moments where I flip back into panic mode (cos I'm a human whose failed but I know I can rise from the ashes again).

[caro]

This site is about empowering people to help themselves and take control of their finances. I don't think you can underestimate how important it is to have control and not let your creditors take control of your finances, and even your life.

 

Keep up the good work.

[The Aud1]

Caro

Spoke to my solicitor, firstly in this case legal aid is not applicable. He, like you and others, reckons I have not got a plausible defence (viz a viz not disputing liability) other than trying to offset the amount with unfair interest charges causing further financial hardship. He also suggested that I do this myself which avoids his charges, which I agreed and think is a commendable suggestion.

I have read a lot on forum re bank charges etc and have all our statements for past 10 years, we reckon on a quick check there is at least 15k charges in last 3 years (could be more, could be less going thru this painstakingly at mom). Can I pursue this on the basis of unfair treatment? Do I need to start another thread? In Northern Ireland we have to meet the Master when defending the case, can I use this defence (bank charges, obviously with evidence etc) or do I need to counter claim? I can also demonstrate how the bank whammied us with penalties once they found that they had in error extended us an unsecured overdraft. Even my account where the income was made up of ONLY child benefit and working tax credit. Despite the fact that I asked them to close the account it has remained open with charges still been levied at £3 per month!

They also stated they were closing both our accounts as of June 2010 but they are still open with charges mounting.

Yours comments would be greatly appreciated

Edited November 4, 2010 by The Aud1
spelling error

[caro]

I'm sure that if your solicitor thought you had a good case s/he would help you. Regarding bank charges, no-one has won a bank charges case in court since the Supreme Court judgment ruling last year, so that would be a risky strategy IMHO, especially in court.

 

Which bank is this?

 

I'm not sure that financial hardship would apply to a business account.

 

Is the business still trading, and are you in a position to pay any of this off?

[The Aud1]

Thanks again for coming back to me

Not a business account, personal joint account. The Bank of Ireland (UK branch). We still have an ongoing healthy relationship with its parent company, in southern ireland!!!! There is a possibility we could pay it off within the next 12 months but possibilities are not enough in this cold harsh climate.

The solicitor although he deals in debt recovery not familiar with how to claim back charges or even how to apply a defence if anything but straightforward dispute.

I'm a little confused here, okay know about test case last year but perhaps I am misinterpreting this (in my befuddled mind) but some Caggers seem to have claimed back successfully charges (is this a direct pursuit0. Should I just send a spreadsheet to the FO and let them deal with it (but it seems that they may have got the test case kicked out and unlikely???),

[The Aud1]

I really need some help here.

Questions:

Who should serve the Default Notice (creditors or solicitors).

I have a letter from the bank stating that they no longer wished to provide banking services to us and would close the account by June 2010 if any debits were then received they would be returned with 'Account Closed'. The account is still open and active and we still receive statements.

Was this letter the Default Notice

Is it too late to get an SAR from them?

I have not received the original summons sent to both of us or the Judgement notification (although as far as the Court is concerned it has been served once posted so not a defence) .

I have looked up banking code of practice yet have found nothing regarding due care and diligence of bank to monitoring customer accounts.

Once a judgement has been filed can I still reclaim massive charges on personal account

Is an overdraft not a regulated creditor/debtor agreement or is this a grey area. We always had an agreement drawn up on other overdrafts of course the error was not in this case (bank's error)

Is there anything else (I'm sure there is) that I need to look at.

Thanks in advance

[caro]

Thanks again for coming back to me

Not a business account, personal joint account. The Bank of Ireland (UK branch). We still have an ongoing healthy relationship with its parent company, in southern ireland!!!! There is a possibility we could pay it off within the next 12 months but possibilities are not enough in this cold harsh climate.

The solicitor although he deals in debt recovery not familiar with how to claim back charges or even how to apply a defence if anything but straightforward dispute.

I'm a little confused here, okay know about test case last year but perhaps I am misinterpreting this (in my befuddled mind) but some Caggers seem to have claimed back successfully charges (is this a direct pursuit0. Should I just send a spreadsheet to the FO and let them deal with it (but it seems that they may have got the test case kicked out and unlikely???),

 

Credit card charges can be successfully claimed back, but not bank charges since the OFT and the banks went to court in 2007 that I have heard of.

 

There may be a remote chance due to financial hardship so it wouldn't hurt to try this tack to the FOS if you have been denied by the bank. The lending code lists the following as possible reasons for hardship.

 

Personal customers should be considered to be in financial difficulty when income is insufficient to cover reasonable living expenses and meet financial commitments as they become due. This may result from a change in lifestyle, often accompanied by a fall in disposable income and/or increased expenditure, such as:

loss of employment;

disability;

serious illness;

relationship breakdown;

death of a partner;

starting a lower paid job;

parental/carer leave;

starting full-time education; and

imprisonment

 

 

You could try in court due to unfairness if you could build a good case, but if you lost, you could end up very much worse off if the bank was awarded costs, as I think may be likely. I would urge extreme caution and consider the advice from your solicitor before proceeding with this.

[The Aud1]

Am confused again, have i got this entirely wrong then - that people have been successful in reclaiming bank charges directly from the banks - not courts THEN bank charges can not be reclaimed.

In Northern Ireland (assume you are not in NI?) court system is different. As regards being worse off re costs I believe that the bank have acted unfairly and therefore might as well be in for a penny as in for a pound (or is that vice versa)

As I said earlier a solicitor is no longer viable due to expense and legal aid is not available in this particular instance (stated by solicitor).

[The Aud1]

Vjohn, have looked up banking code as suggested no reference to the bank needing to take due care and diligence with customer accounts that I could use in defence.

As you wil see I am now pursuing bank charges route. Can you elaborate on penalty charges, do you mean bank charges? Should I just send spreadsheet of bank charges and penalties to F.O. for their judgement and also use the financial hardship caused by the levying of such penalities.

Thanks in advance

[caro]

The same applies in NI regarding bank charges. I think this radio clip will be of interest to you, including info on bank charges, personal guarantees and repossessions in NI.

 

http://www.consumeractiongroup.co.uk/forum/content.php?592-Complaints-against-banks-the-FSA-report.-Interview-on-Radio-Ulster-with-CAG-and-the-BBA

[The Aud1]

THE END: Had our meeting with the Master of the Courts today who recommended that we negotiate with the creditors solicitors afterwards.

NEGOTIATIONS WENT VERY WELL AND THATS IT FOLKS - ALL DONE.

[caro]

I love a happy ending. Can you elaborate on the outcome or is it confidential?