ERC x5!!! BofS, GMAC-RFC, I Groupx2, Mortage Express

[saraounia]

Hello Everyone,

 

Firstly thank you all for sharing. Most enlightening and humbling at the same time. Zoot, you are a revalation and I am in awe!!

 

I won't bore you with details on how I got myself into such an filthy, appalling mess (troubles... ) but I am now going to try to claw back multiple ERCs totalling an incredible £45,568 from 4 lenders over 5 mortgages (for two properties over the last 10years).

 

Bank of Scotland - £3,699.99 paid 27/03/00

SimpleLoans/GMAC-RFC - £12,393.81 paid 10/09/01

I group - £5,489.55 paid 20/09/02

GE Money / I group - £10,657.26 paid 1/12/05

 

Mortgage Express - £13,327.87 ABOUT TO BE PAID. This is a strange one. Actually redeemed the main account on 6th sept. But ME told my solicitor over the phone that no ERC was applicable and they would confirm in writing in a few days. He paid the principal and retained the amount of the ERC till written confirmation from ME. Heard nothing for 5days, I chased the solicitor, he called them again, only they then told him the full about (5% of o/s bal) was payable. I called ME direct and they confirmed to me an ERC of £702 which they agreed to confirm in writing. I am now waiting for that written confirmation. Any advice on this matter would be very much appreciated as I will probably hear from them shortly. My solicitor is priming me to cough up in full with daily interest since 6th! I have not yet paid so cannot yet ask for a refund, but was simply hoping to pay the £702 via the solictor once they had confirmed it in writing so the account can be closed. We shall see. I will keep you updated.

 

On the earlier historic ERCs which have actually been paid, I have framed a letter copied below. It includes everything I cobble together and is supposed to be a one hit request to ask for my refund and preclude any of their standard time wasting responses.

 

The letters are ready to go to the registered addresses for each company.

 

I am ready to go to court based on what I have learned to date. Those

 

1) Before I send them off would very much appreciate any comments.

2) Is the registered address the correct place to send the prelim letter/ then LBA 14days later please? I am so tired now, I am getting a bit confused.........

 

Hope I have done the right thing starting a thread and putting them all on the same one.

 

Sample letter to claim back ERCs

 

ACCOUNT NUMBER:

 

Dear Sir / Madam

 

Request for repayment of charges

My request

I am writing to ask you to refund the Early Redemption Charge of £ you levied on when I redeemed my account (referenced above) with you.

 

I hope that you will respond practically to this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

The Early Redemption Charge (ERC) imposed amounts to a penalty clause imposed for my breach of contract in terminating the mortgage before the contractually agreed period.

 

In the case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract, as opposed to a charge which represents a penalty. This law was confirmed and upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. A charge will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach. A penalty clause is void in its entirety and unenforceable.

 

In addition your charges appear to represent an unfair term of contract, which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under Schedule 2 of the said Regulations, which provide an indicative and non-exhaustive list of terms, which may be regarded as unfair. Under paragraph 1(e) of schedule 2 this specifically includes terms that have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation.

 

Also it has now been confirmed that such penalties are considered to be unfair per se by the OFT who reported on the 5th April 2006 and are therefore presumed to be unlawful in the absence of specific proof to the contrary.

 

I would like to bring your attention to the following statement by The Office of Fair Trading:

‘A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations.

 

A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement

 

The fact that I signed a mortgage offer containing any term relating to the ERC does not make such a term enforceable. In all the cases regarding penalty clauses there is no dispute that the term was agreed to. However, a court finding of a penalty clause as opposed to a liquidated damages clause renders the clause unenforceable in its entirety even if it has in fact been agreed to.

 

Please do not attempt to deny a breach of contract. The charge you have levied in the form of an early redemption fee represents a charge in relation to a breach of contract on my part in that I terminated the mortgage contract before the end of the contractually agreed number of years.

 

This term of the contract was clearly stated in the written mortgage offer signed by myself. The terms of which were incorporated by reference into the mortgage deed, which was not only signed by me but also witnessed. There is clearly no room for doubt that such a clause existed in the contract. Similarly, there is no question that I in fact redeemed the mortgage as stated above. This date is clearly well before the agreed end date stated in our contract and thus represents a clear breach of the contract.

 

I will not accept any assertion that the ERC and fees were levied to reduce the impact to yourself of a long-term financial commitment and I draw your attention to the fact that an innocent party to a breach is under a legal duty to mitigate their loss. This would also make any ERC levied to indemnify a loss to you, contrary to S.4 Unfair Contract Terms Act 1977, as outlined above.

 

Furthermore a charge or fee levied requiring me to indemnify you against any commercial risk to yourself by offering me a reduced interest rate in order to attract my custom is also contrary to s.4 Unfair Contract Terms Act 1977. I am confident that a court is likely to consider this clause to be unreasonable within s.11 of the said Act as a large commercial institution such as you is in a far better placed position than myself as consumers to bear the burden of the vicissitudes of business.

 

Further, I will consider any representations that your charges are fair and reasonable deceptive and designed to deceive me into agreeing to pay them. Your concealment of the true nature of your charges has prevented me from asserting my rights until now.

 

I believe that the charges you have levied for early redemption far exceed any true cost to yourself as a result of my breach and any genuine pre-estimate you could conceivably reach.. If you disagree, then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put to as a result of my breach, in order to fully disclose that your charges really do reflect your costs.

 

Your responsibilities

I would draw your attention to the terms of the contract that you agreed to at the time that I took out the mortgage. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner, which complies with UK law.

 

I am frankly shocked that you have operated my account in this way as I truly had confidence in your integrity and expertise.

 

Action to resolve this matter

I would like to give you the opportunity to settle amicably without the need to take the time of the courts in accordance with my duty under the Overriding Objectives of the Civil Procedure Rules. This option will of course save yourselves the time, trouble and costs of defending the claim.

 

Thus I am asking that you refund the total charges, which have unlawfully been levied on my account. Please be assured failure to refund all the money unlawfully taken from me will result in me taking further action.

 

I will give you 14 days to reply accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment. If you do not respond, or you do not respond positively, within this time period, I shall send you a letter before action giving you a further 14 days in which to reflect.

 

I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that, there will be no further communication from me and I shall issue a claim at the expiry of the second deadline. Thus take this letter as 28 days written notice of my intention to issue a court claim should you not comply with my request within 28 days of receipt.

 

I am aware of the costs risk associated with court action but am fully prepared to take that risk. Firstly I am unlikely to lose - it is increasingly evident that the banks are operating an unlawful regime of penalties so it would be very unlikely that the judge would award costs against an ordinary person merely trying to recover their charges against a large commercial institution such as yourselves - (In Stephen Hone's case, though he lost, the court refused to order £117,000 costs against him even though he himself had forced the matter onto the multi-track).

 

Should you choose not to attend to this matter, I look forward to a court appearance with as much attending publicity as I can muster, when the bank will be obliged to make standard disclosure and this means disclosing all of the evidence of your penalty charges regime even if the information is damaging to you.

 

I will issue proceedings on at the end of the 28-day period on 26th October 2006, to reclaim the ERC / fees levied and legal costs, plus statutory interest at 8%.

 

On the other hand, should you choose to settle in full, I would be more than happy to let the matter drop without further comment.

 

Yours faithfully,

[ukaviator]

Hi..What a great amount that would be to get back.Go for it.I have filed a claim for £5285 with Moneyclaim against Birminham Midshires. Good luck with the claims.

 

Ukaviator

[paddym]

great letter best of luck !

[nathal]

really, its a mix up with ME. They think you owe 5% to redeem but are only liable for 702

am i getting that right

[gizmo111]

BOS - 3369 claim is over 6 years old - that may give you problems in it self.

[zootscoot]

Hi Saraunia

 

Wow what a lot of lolly!

 

 

Zoot, you are a revalation and I am in awe!!

 

Ahhh your soo kind!

Hope I have done the right thing starting a thread and putting them all on the same one.

 

It might be easier for you and others following particular institutions to start a separate thread for each one otherwise things can get very confusing.

 

Good letter covering all bases although perhaps leave out the following paragraph.

Further, I will consider any representations that your charges are fair and reasonable deceptive and designed to deceive me into agreeing to pay them. Your concealment of the true nature of your charges has prevented me from asserting my rights until now.

Asking them to provide a breakdown of charges and how they reached them, then telling them you won't believe them if they do is a little antagonistic?

I know where you are coming from with this ... to cover the six year rule and concealment issues. But best to leave that til they raise it in their defence.

Should you choose not to attend to this matter, I look forward to a court appearance with as much attending publicity as I can muster, when the bank will be obliged to make standard disclosure and this means disclosing all of the evidence of your penalty charges regime even if the information is damaging to you.

Again perhaps a little too antagonistic for a preliminary letter. At least give them a chance to say no first! Realistically they are not going to settle before you issue a claim no matter how strong your arguments are in your letters. They are far more likely to dig their heels in if provoked. They are feeling pretty much backed into a corner and the only way they can get back at us is by delaying the payout. Also it is still early days with ERCs and not all are convinced that they are in fact unlawful.

Best of luck with all the claims

Zoot

[paddym]

regarding claims over 6 years old what ive taken out of some of the advice zootscoop has had in some of her threads is that the limitations act covers mortgages for a 12 year period counting back from date of first letter requesting refund !

[gizmo111]

regarding claims over 6 years old what ive taken out of some of the advice zootscoop has had in some of her threads is that the limitations act covers mortgages for a 12 year period counting back from date of first letter requesting refund !

 

What zoot has said is that penalty charges that were added to the principle debt would be covered for 12 years, but ERC's would not be they are only covered for 6 years.

[maroonfox5]

Saraounia.......

 

Welcome to the ERC club and good luck.

 

Regards

 

MF

[saraounia]

Hi UKaviator, paddym, gizmo111, nathal, zoot......

 

Thanks for the general review and comments. Most useful. Yes, the letter was perhaps a bit over the top for a preliminary letter, but I really wanted them to feel my anger....Best not to cut off my nose to spite my face though eh. Have had some sleep now and will make some of the changes suggested by Zoot.

 

I will amend to say that any general i.e non specific representations are not acceptable.

 

I know I should ask nicely, but frankly I cannot bring myself to do so. We know they have a set of stock answers they use to fob us off and scare people and I want them to know I am willing and able to test this in court and I won't be frightened off.

 

But Zoot, would you please clarify on the 6year rule? Is the BoS claim out of time because it entirely ERC and not a penalty added to the principle?

 

I will set about starting a new thread for each one as suggested. Please bear with me, I am still working out how the forum works etc.

[saraounia]

Nathal,

I don't think it is a mix up. I think they know they are claiming an extortionate amount and are not sure if they can still get away with it. They confirmed no, then yes to my solicitor for the entire amount. Then when I called up to find out myself, they told me it was only £702. That is 3 different amounts in a week. Seems dodgy to me. I guess I will have to pay up then re claim. Unless my solicitor can question them on the pre estimate quote, with their written confirmation of £702 as back up. But I doubt it, as he has been much more of a hinderance than a help all the way through.

 

I expect they will dig their heels in for the full amount, I will pay out, then I will claim.

[saraounia]

Am I right sending the prelim letter to registered offices please?

[saraounia]

Okay, have amended the letter to take out the last three paragraphs entirely and made the change above too - Zoot is quite right of course, will save something for LBA letter.

 

And have now started seperate threads on each one.

 

Hope that is all ok?

 

~~~~~closing down this thread~~~~~~~~~~~~~

[zootscoot]

But Zoot, would you please clarify on the 6year rule?

 

What zoot has said is that penalty charges that were added to the principle debt would be covered for 12 years, but ERC's would not be they are only covered for 6 years.

 

That is correct, however, unless you want to invoke s.32(1)(b) deliberate concealment of the facts relating to the cause of action on the part of the mortgage co.

 

or s.32 (1) © You paid the money out in the mistaken belief that the charge was lawful.

[saraounia]

Thank you Zoot. Much obliged. Will keep forum posted.

[Joons2]

Zoot,

 

I may have an old ERC from about 8years ago, I am also sure that some old penalty payments were added to the mortgage. I am unsure whether to claim because of the time limits you mention. Can you explain me why I can't claim for an ERC but can for penalties. I have found a copy of the Limitation ACt but don't really understand it.....

 

Help please....

[saraounia]

Hi there Joons2,

As I understand it you can claim for ERCs from up to 6 years back normally. But you can claim for ERCs from more than 6 years ago where you invoke s.32(1)(b) deliberate concealment of the facts relating to the cause of action on the part of the mortgage co.

or s.32 (1) © You paid the money out in the mistaken belief that the charge was lawful.

 

So says Zoot.

 

If in doubt, go to the main page and start your own thread. You should get the full sparkling range of opinion.

[essjaysea]

I think you will find that mortgage related contracts have a 12 year limit under the Limitation Act 1980

[martin2006]

""I won't bore you with details on how I got myself into such an filthy, appalling mess (troubles... ) but I am now going to try to claw back multiple ERCs totalling an incredible £45,568 from 4 lenders over 5 mortgages (for two properties over the last 10years).""

 

 

 

Whats that coming over the hill...............................IT IS A MONSTER!!!!!!!!!

[gizmo111]

I think you will find that mortgage related contracts have a 12 year limit under the Limitation Act 1980

 

yes but i think that 12 years is the principal debt secured - and any thing else is a simple contract statute of limitations. Think there was some high court case on this a few years ago - zoot will know definetly

[Guest peed orf]

Saraounia, I notice you have two with I Group, did one run into the other? If so, was there anything odd about it from their end?

[saraounia]

Hello P'Od,

 

Sorry, have been away. No there wasn't anything odd about it. I needed to raise some new capital and was adivised that was the best way to do it.

[Guest peed orf]

Hi, I think they took me for a right plonker, knowingly and probably unlawfully, (I believe I have to put an "allegedly" in there) only I didn't have any fight left at the time, and now I don't have the paperwork. Just like to know how many different people they conned (allegedly).