chased for bank charges debt.

[JuryMan77]

I've got Horwich Farrelly chasing for a total of about £1,300 in relation to a bank account from 2006/2007.

 

After several letters back and forwards between us, and a CCA request, they've finally sent a copy statement for the last two months period prior to account closure. No other documentation was sent.

 

The statements however are very enlightening, being that the £1,300 is made up of £1,100 of bank charges (not including any interest - thats just what they've charged), including such niceties as £100 of unauthorized overdraft charges in 6 days (4x £25 charges, two on one day, two 4 days later).

 

With interest added, they'd actually owe me over £1,450.

 

Whats the best way to handle this? I'm impressed HF had the nerve to send me a statement like this frankly. How best to reply?

[BankFodder]

I'm afraid that as they relate to bank charges, -- and since the test case in 2009, there is no legal argument that you can produce to counter an alleged bank charges debt if those charges relate to a personal current account.

 

The only basis to resist them would be to say that the charges have somehow been caused by unfair treatment by the bank. unfortunately even though the charges themselves very clearly enormously unfair, the test case made it clear that bank charges could not be tested for their fairness under the Unfair Terms in Consumer Contracts Regulations.

 

The only thing that I can suggest is that you rely on the Limitation act -- but for that, at least six years will have to have passed since you last paid any money towards the debt or since you last act acknowledged it.

[JuryMan77]

Thanks BF - they haven't come up with any form of agreement whatsoever so I'm tempted to just reply suggesting they crack on and try and find it. I don't want money back - I want the original debt written off. If this actually came before a Judge, and the Judge saw the £1,300 was made up of £1,100 in bank charges (for which there's no agreement available between myself and the bank available to show both parties had agreed to those charges) surely common sense would prevail!

 

Regardless - do I have an arguement because of the lack of production of any form of agreement, or do they not have to because this is a bank account, not a credit account? If they don't need to provide an agreement, they could just plump up any charges they wanted - they might as well charge £100 per event, surely?

 

Thanks thus far

[BankFodder]

No need for a CCA with an overdraft.

 

There may not be an express agreement but if there was a bank account and banking services were provided and which you used, then this would be evidence of an agreement and I am sure that a judge would accept that the account was conducted on their standard terms and conditions.

[JuryMan77]

bah not what i wanted to hear lol.

 

Ok, thanks very much for the guidance.

[Bazooka Boo]

To date I have not heard or read of anyone being taken to court for unpaid bank charges, I may be wrong?

From another thread, will link it in a minute.

Bank accounts per se are not regulated under the CCA74 - but ODs certainly are (with part v exemption) - part v exemption just means that the bank doesen't have to provide a traditional cca document, as you would have signed and received with a loan or credit card. Instead they in place of a traditional cca document, are bound to provide you with a copy of the original letter of facility you would/should have received when the od agreement commenced (and every time the auth od limit was amended i.e increased or reduced). They also have to send you any copy terms and conditions, statements etc......

 

HOWEVER, part v exemption only applies, if the bank when you send in your cca request claim it, if they don't then you don't alert them to the fact, and normal cca procedures apply i.e a traditional copy agreement is reqd.

 

Additionally, if you are in unauth waters, then within 3 mths of you going outside of your auth od terms, your bank should have sent you details of the revised higher interest (unauthorised od) rate you were now subject to, and any other unauth OD charges to be applied, and the charging period. (they should also send you details of the charges applied to your OD during each charing period - i.e a monthy statement illustrating what they had added to the os debt).

 

Now, if your bank did not send you such information within the specified time frame, under the terms of the CCA, they forfeit the benefits of part v exemption - irrespective to whether they claim part v exemption to your cca request or not - which means that the OD facility needs a full and correctly executed signed credit agreement if they wish to pursue and enforce through the courts - game over ..........

Abby25.

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?289227-Lloyds-overdraft-passed-on-to-Wescot&p=3327774&viewfull=1#post3327774

[Tingy]

Bank Fodder - I beg to differ. This is direct from the judge in a court case:

 

THE ACT

It is common ground:

 

 

(a) that the agreement for an overdraft of £2,000 in the terms of Coutts' letter dated 5 April 2002 was a regulated debtor-creditor agreement within the meaning of sections 8 and 13© of the Act, providing for 'running-account credit' within the meaning of section 10(1)(a) of the Act (in effect, a revolving credit within the agreed credit limit of £2,000); and

 

 

(b) that, as such, it was subject to the requirements of Part V of the Act (including the requirements as to documentation set out in sections 57 to 63 of the Act) save and in so far as it was excluded or exempted from such requirements.

 

Section 65 in Part V of the Act provides that an "improperly executed" regulated agreement is unenforceable by the creditor without a court order. It is common ground that a regulated agreement is "improperly executed" for this purpose if the requirements of sections 57 to 63 have not been complied with.

 

Section 74 of the Act provides for the exclusion of certain agreements from Part V. It provides as follows (so far as material):

 

"74. – (1) This part …. does not apply to –

 

(a) ….

(b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, …

© ….

(2) ….

(3) Subsection 1(b) … applies only where the OFT so determines, and such a determination –

(a) may be made subject to such conditions as the OFT thinks fit …

(b) ….

(3A) …. in relation to a debtor-creditor agreement under which the creditor is …. a bank …. the OFT shall make a determination that subsection 1(b) above applies unless it considers that it would be against the public interest to do so.

(4) …."

Part VI of the Act relates to matters arising during the currency of credit agreements. Section 82 in Part VI, which is headed 'Variation of Agreements', provides as follows (so far as material):

"82. – (1) ….

 

(2) Where an agreement (a "modifying agreement") varies or supplements an earlier agreement, the modifying agreement shall for the purposes of this Act be treated as –

 

 

(a) revoking the earlier agreement, and

(b) containing provisions reproducing the combined effect of the two agreements,

and obligations outstanding in relation to the earlier agreement shall accordingly be treated as outstanding instead in relation to the modifying agreement.

 

 

(3) ….

(4) If the earlier agreement is a regulated agreement for running-account credit, and by the modifying agreement the creditor allows the credit limit to be exceeded but intends the excess to be merely temporary, Part V …. shall not apply to the modifying agreement.

(5) ….

 

(6) ….

(7) …."

 

 

THE DETERMINATION

 

The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:

"1. Under the powers conferred upon me by Sections 74(3) and (3A) and 133 of the Consumer Credit 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.

[nicklea]

I would agree with Tingy. That argument from abby25 is not correct in my opinion.

[Abby25]

Not correct in what aspect?

[nicklea]

This bit is wrong:-

 

HOWEVER, part v exemption only applies, if the bank when you send in your cca request claim it, if they don't then you don't alert them to the fact, and normal cca procedures apply i.e a traditional copy agreement is reqd.

 

So is this:-

 

Now, if your bank did not send you such information within the specified time frame, under the terms of the CCA, they forfeit the benefits of part v exemption - irrespective to whether they claim part v exemption to your cca request or not - which means that the OD facility needs a full and correctly executed signed credit agreement if they wish to pursue and enforce through the courts - game over ..........

[Abby25]

Its incorrect because ?

[cerberusalert]

This was discussed in this thread; http://www.consumeractiongroup.co.uk/forum/showthread.php?237096

[Bazooka Boo]

[Abby25]

Thanks Cerbs ... Nick please refer to post 177 of the thread suggested by Cerbs ... I would also advise that I have successfully seen off my bank and subsequent DCA to whom the debt was sold, with this very argument - but of course your post may be based on your own personal experiences where this defence has failed.Moving on, I think the thread Cerbs refers the OP to would be an excellent place for them to do their research, as its comprehensive with lots of debate and info from many Caggers. Best of luck to the OP ... Abs x

[nicklea]

Nowhere in the CCA does it say that a bank must write to you and claim a part V exemption and that if they don't then they aren't allowed to claim it. I would suggest that it is clearly ludicrous to say this.

 

A bank will NEVER forfeit it's exemption under the CCA - have a read of the Act and the amendments in the Consumer Credit Amendments Regulations 2010. There is just nothing there that means that this can happen.

 

What cerberus said about the bank losing it's rights after 3 months and one week is wrong. At worst, it is still enforceable by the court:-

 

(3) If the requirements of this section are not observed, the agreement is enforceable against the debtor on an order of the court only (and for these purposes a retaking of goods or land to which the agreement relates is an enforcement of the agreement)

Congratulations on seeing off the bank in your own case. However, I would venture to suggest that it did not get as far as court and that you didn't actually put these arguments before a court.

[Abby25]

Thank you for your congrautlations on my success Nick - albeit I think a little tongue in cheek ..... The following, amongst other similar advice from others, was provided to myself when I asked for assistance on this very subject ..... I can't remember the OP of the following so apols to them for not seeking their permission to re-produce ... "An overdraft is a debtor creditor agreement as defined under section 8 and 13 of the CCA and is running account credit as defined in section 10. This has high court case law - coutts vs sebastyn.When they say it is not CCA, what they mean is that there is part v exemption from the CCA but,-they still need to show the contractual arrangement set up with 30 days of the o/d-they still need a valid default notice-they still need a termination notice.A current account is covered by the Banking Code (FSA) and does not offer credit facilities. An overdraft is a credit agreement and as such CCA.This is my specialist area I've seen off HSBC and ltsb on this. They will try to tell you that CCA does not apply to an o/d this utter nonsense. What tehy mean is that they have the part v exemption. So a Subject access request requesting specifically the default and termination notices plus the letter they sent you within 30 days of setting up the o/d (which must include interest rate and conditions such as limit) will tell you if they can enforce it. But I would still start with a CCA for the o/d it is for them to prove part v exemption.A CCA request applies to an overdraft until and unless they tell you in writing that it is Part V exempt. At that point they must provide all the documents under the determination for the overdraft to be enforceable else section 78(6) of the CCA applies.LEGAL BIT8. The Claimant believes that it will form part of the Defendant’s Defence to this Claim that this agreement is not a regulated agreement under the CCA 1974. The Claimant avers, however, that this is a regulated agreement and falls under the remit of that Act. To help clarify these matters, this is an extract from a Court case (Coutts v Sebastyen) and is part of the summing up by the Judge in relation to effect on overdrafts and the function of the CCA in such circumstances;“The Defendant provided an overdraft on the account;a. The agreement was a regulated debtor-creditor agreement within the meaning of s.8 and s.13© of the Consumer Credit Act 1974, providing for 'running-account credit' within the meaning of s.10(1)(a) of the Act (in effect, a revolving credit within an agreed credit limit); andb. That, as such, it was subject to the requirements of Part V of the Act (including the requirements as to documentation set out in sections 57 to 63 of the Act) save and in so far as it was excluded or exempted from such requirements.Section 65 in Part V of the Act provides that an "improperly executed" regulated agreement is unenforceable by the creditor without a court order. It is common ground that a regulated agreement is "improperly executed" for this purpose if the requirements of sections 57 to 63 have not been complied with. Section 74 of the Act provides for the exclusion of certain agreements from Part V. It provides as follows (so far as material): "74. – (1) This part …. does not apply to – (b) a debtor-creditor agreement enabling the debtor to overdraw on a current account, …(3) Subsection 1(b) … applies only where the OFT so determines, and such a determination – (a) may be made subject to such conditions as the OFT thinks fit …(3A) …. in relation to a debtor-creditor agreement under which the creditor is …. a bank …. the OFT shall make a determination that subsection 1(b) above applies unless it considers that it would be against the public interest to do so.THE DETERMINATION: The Determination (which is signed by the Director of Fair Trading) is made under section 74(3) of the Act. I set it out in full:"1. Under the powers conferred upon me by s.74(3) and (3A) and s.133 of the Consumer Credit 1974, I, the Director General, being satisfied that it would not be against the public interest to do so, hereby revoke with effect from 1st February 1990 the Determination made by me in respect of Section 74(1)(b) and dated 3 November 1983 and now determine that with effect from 1st February 1990 Section 74(1)(b) shall apply to every debtor-creditor agreement enabling the debtor to overdraw on a current account, under which the creditor is a bank.2. This Determination is made subject to the following conditions:-(a) that the creditor shall have informed my Office in writing of his general intention to enter into agreements to which the Determination will apply;(b) that where there is an agreement between a creditor and a debtor for the granting of credit in the form of an advance on a current account, the debtor shall be informed at the time or before the agreement is concluded:- of the credit limit, if any,- of the annual rate of interest and the charges applicable from the time the agreement is concluded and the conditions under which these may be amended,- of the procedure for terminating the agreement; and this information shall be confirmed in writing.© that where a debtor overdraws his current account with the tacit agreement of the creditor and that account remains overdrawn for more than 3 months, the creditor must inform the debtor in writing not later than 7 days after the end of that 3 month period of the annual rate of interest and charges applicable.3. In this Determination the terms 'creditor' and 'debtor' shall have the meanings assigned to them respectively by Section 189 of [the Act]. The term 'bank' includes the Bank of England and banks within the meaning of the Bankers' Books Evidence Act 1879 as amended."9. The Claimant avers, therefore, that the Defendant is in default of the Claimant’s request to provide those details required by the Determination of The Office of Fair Trading and, while that default continues, should be held in default within the terms of s.78(6).10. The Defendant has failed to provide a document that complies with this request. Accordingly, the Defendant is “in default” under s.78(6) and the Claimant respectfully submits that this prevents the Court enforcing this debt until the default is rectified as per s.78(6)(a) CCA 1974. The Defendant has also committed an offence under s.78(6)(a) CCA 1974.11. The Claimant, therefore, puts the Defendant to strict proof of;11.1. The contractual agreement between both parties in relation to the Current Account, allowing the Claimant to request overdraft facilities and which terms and conditions were included as part of that agreement;11.2. Where no such agreement can be provided, the agreement between the two parties as to the overdraft facilities provided to the Claimant at the time of application for an overdraft by the Claimant;11.3. Where no such agreement can be provided, copies of original documentation sent to the Claimant that complies with the Office of Fair Trading’s Determination, issued in relation to overdrafts on Current Accounts, under s.74 and s.133 of the Consumer Credit Act 1974; (that Determination being dated 1st February 1990) "You disagree with this Nick, which is fine - and I presume based on your own experiences. To answer your question, no court proceedings haven't been initiated in my case as it appears my bank accepted the argument presented to them. I also didn't actually post on here, and whilst I have not taken personally the tone of your post, as debate is always good, I believe it would be of benefit to the OP if you would instead give them your guidance/experience on how you would address their issues that they are seeking help with. You may also want to let Cerbs know, site staff, that you believe he is giving incorrect advice to posters looking for OD help - I'm sure he would appreciate your input & experience. To the OP, seek out as many OD threads as possible, get info from lots of places, and then decide how you wish to proceed - my suggestion is always to try and mediate with your creditor to come to an affordable arrangement, and only if they are obstructive or just plain unreasonable seek other avenues to assist in your current financial position. The comments made by myself on any threads, are based on my own experiences, I am not legally qualified, nor do I present myself as such - and you must always follow your own instincts on a balance of advice given by all posters. Nicks argument is actually beneficial to the thread, as he is quite right, just because one poster doesn't end up before a Judge doesn't mean another won't - so you should always seek as much guidance from as many places and people as possible .... in fact with one facing court I would always suggest seeking qualified legal advice from a consumer credit solicitor. Abs xx Apols if the spacing is out ... I'm having a probs with this at the mo xx

Edited April 27, 2011 by Abby25

[clio2010]

can you not try and reclaim them under section 127 and 128 of the bcobs (Formerly the banking code)

[nicklea]

Abby,

 

It was quite difficult to read your post as you put no spaces between any paragraphs, so apologies if I miss anything.

 

First of all, my comment on congratulating you was in no way tongue in cheek. It was sincerely meant - at the end of the day it doesn't matter how people beat the banks - just as long as they do. So I am really glad that you were successful. However, as you say yourself, you never did go to court. Creditors make decisions based on a number of different things, largely on whether they feel it would be uneconomic to continue.

 

However, a large number of people only ever read these forums and never join or post anything and it can be easy for them to go away having read something on a particular thread thinking that what they have read is correct. All I'm trying to do is to highlight to anyone coming along and reading this afterwards looking for advice that some of the things stated here are incorrect.

 

The first part of the information you give in your post is correct, however this bit is incorrect:-

 

it is for them to prove part v exemption.A CCA request applies to an overdraft until and unless they tell you in writing that it is Part V exempt. At that point they must provide all the documents under the determination for the overdraft to be enforceable

 

There is no necessity for the bank to inform you of the part V exemption. Whoever wrote this is wrong and, if you have a look at the CCA and all of the regulations made under the CCA you will see that this does not appear anywhere.

 

This is the reason that I am saying that you are wrong in the post above where I quote two passages from you.

 

You are also wrong about the three months and one week issue. That would only apply if the bank gave you tacit approval. If they wrote to you at anytime in that three months telling you that you had exceeded your limit and asking you to reduce your overdraft back to within your limit then they have not given their tacit approval and so this does not apply.

[Abby25]

I know Nick, sorry about the lack of paras - for some reason everytime I posted my reply up, the blinking whole let kept merging ... !!! (sorry if it gave you a headache !!) After withdrawing my OD facility, my bank never wrote to me within the specified time scale - i.e 3 mths & 7 days - so that was a bit of a boob on their part, as well as a dud DN (although the dud DN did not form part of my row with them).They also tried upon my CCA request, to claim that ODs are not regulated whatsoever under the CCA - and that they did not have to present any paperwork - which is wrong - nor did they mention or claim part v exemption ....which is what my argument to them was based on. I completely agree, that unless someone has actually got to court and argued either way - then none of us will know how it will pan out - and that any advice given on any forum has to be taken by the individual as its meant - with best intentions by the poster - but that if its going to court the individual really needs to seek qualified legal advice. My responses to my bank seemed to see them off, now whether that's because what was presented was correct, or because they didn't want to chance it, is anyone's guess .... I'm just glad that the advice I recd myself, and how I argued the point, seemed to work. But of course ... someone else may not be so lucky ...Abs

[Abby25]

Sorry Nick ... its done it again .... merged paras that is ... know idea why it keeps doing it !!!