MBNA Charges - refused

[AndyOrch]

You can refer to case law within a Witness Statement but dont include it..always exhibit it by reference.

 

Sec69 interest shall run from date of claim up until judgment or payment.

 

Regards

 

Andy

[Mike_hawk]

There may be some logic in providing an explanation to the judge that the charges are inherently demanded within each and every statement of account for something in the region of 20 years post transaction due to the manner in which the business allocates payments. I had a similar (ish) problem a couple of months ago and fortunately the DJ took the common sense approach that it did not seem sensible to allow a high street bank to rely on the LA as a defence but brought numerous claims for accounts which it knew contained historical charges, each of which could/would be barred in their own right if not contained within a future inflated demand.

[steampowered]

I strongly agree with Mike_hawk. The argument described in post 327 is a different argument than the mistake point and not reliant on s32, so treat them separately, but I think legally it is probably a better argument.

 

On the s32 point I have to think you need to briefly mention what the mistake was, presumably the mistake was that both sides were mistaken as to the fact that these charges were not legally due, and the mistake was only discovered less than 6 years ago.

[up2meears]

Thanks guys.

 

I've had some great advice all round and the WS has been sent to the Court and other side.

 

Will keep you updated as the final chapter is hopefully written

 

Thanks again all

 

Up2

[Mike_hawk]

Up2

 

The courts (esp for cases allocated to the SCT) tend to play a little dumb on running credit. It may prove useful to search the internet for examples and calculators capable of reconciling your position that the penalty (contractual service charge) persists well into the future and cannot be barred by limitation.

 

Think of each charge as a sofa or armchair, each are a transaction and regardless of the date each were applied to the account they are purchased on terms which allow for repayment ad infinitum. Its demands and your payments continually update & extend the bar, if its position were correct any account holding a debit balance would rewrite the principal balance every 6 year cycle.

[up2meears]

Up2

 

The courts (esp for cases allocated to the SCT) tend to play a little dumb on running credit. It may prove useful to search the internet for examples and calculators capable of reconciling your position that the penalty (contractual service charge) persists well into the future and cannot be barred by limitation.

 

Think of each charge as a sofa or armchair, each are a transaction and regardless of the date each were applied to the account they are purchased on terms which allow for repayment ad infinitum. So in theory, as the charges are applied to the account one month, they incur interest the next as they change from a charge to a transaction? Unless I pay off the balance in full each month these get bunged in with the months spend, making them last longer than the month I was penalised for Its demands and your payments continually update & extend the bar, if its position were correct any account holding a debit balance would rewrite the principal balance every 6 year cycle.

 

Thanks Mike, I will be swotting over the next few weeks, although work is quite full on at the mo, I will be looking for as much ammo as I can find

 

Up2

[AndyOrch]

Up2

 

The courts (esp for cases allocated to the SCT) tend to play a little dumb on running credit. It may prove useful to search the internet for examples and calculators capable of reconciling your position that the penalty (contractual service charge) persists well into the future and cannot be barred by limitation.

 

Think of each charge as a sofa or armchair, each are a transaction and regardless of the date each were applied to the account they are purchased on terms which allow for repayment ad infinitum. Its demands and your payments continually update & extend the bar, if its position were correct any account holding a debit balance would rewrite the principal balance every 6 year cycle.

 

Excellent post Mike and very applicable to running credit.

[Mike_hawk]

Thanks Mike, I will be swotting over the next few weeks, although work is quite full on at the mo, I will be looking for as much ammo as I can find

 

Up2

 

Your bit in red seems to the understand the position.... Bear in mind DJ's tend to be in a position to settle credit cards every month interest free and without penalty, the idea that a small fee may still be 'live' 20 years into the future is a little lost on them.

[up2meears]

Up2

 

The courts (esp for cases allocated to the SCT) tend to play a little dumb on running credit. It may prove useful to search the internet for examples and calculators capable of reconciling your position that the penalty (contractual service charge) persists well into the future and cannot be barred by limitation.

 

I've just gone onto this website http://www.cardcosts.org.uk/ to have a look at a calculator.

 

I typed in a £100.00 for the amount I owe and put a monthly spend of £12 which is the average default charge nowadays at a modest interest rate of 18.9%, paying the minimum (2.5% or £5) and the results say:

 

Based on the figures you have entered, you would never clear your balance. Please change these figures and try again

 

So for a balance of say £3000 and fees being added regularly (most cases would be paying the minimum with maybe a little extra on top each month) these charges do indeed go on forever

[Mike_hawk]

I think that's probably the extreme, the calc doesn't satisfy the simple interest element for charges. It does however illustrate the point quite well when you look at no further spending on a small balance at low compound interest rate, I tried 1k at 5% APR and min repayments of 2.5%...... the term extended beyond 10 years!

[up2meears]

It's quite an eye opener

 

I would imagine that the most recent spend (transactions or charges) get added to the bottom of the long list of older ones so technically if you pay the 2.5% min like you suggest you wouldn't start paying to clear them until the older ones are gone maybe many years later.

 

Is this something I would be able to mention in court? for example if I wrote an explanation to read out (so I don't forget with nerves) and provide an example demonstrating the length of time these charges actually take to disappear?

 

Thanks

Up2

[Mike_hawk]

There's so many variables to consider I'd try to keep it as straightforward as possible. To show any accuracy you'd need to know the interest rate, any variations and when applicable, your payment history, it's contractual term/s regarding allocation of payments..... Interest first, cash second, new transactions third etc etc. The court is unlikely to be interested in exact figures but should consider the very high probability that an element of the charges persist and have continued to be demanded and serviced

 

If you have any record of interest rate ( I'd be inclined to use the highest) and any record of minimum required payments (use the lowest) it may be enough for the DJ to allow your argument against a limitation bar. The cardcost site is an industry member portal so I can't see why a hard copy example shouldn't be presented to illustrate the issue.

 

If your min required payments were 2.5% and the interest rate applied to default fees were 25% applied simply the argument is fairly clear to in that you would only be servicing the principal charge at pennies per month.

[up2meears]

 

If you have any record of interest rate ( I'd be inclined to use the highest) and any record of minimum required payments (use the lowest) it may be enough for the DJ to allow your argument against a limitation bar. The cardcost site is an industry member portal so I can't see why a hard copy example shouldn't be presented to illustrate the issue.

 

If your min required payments were 2.5% and the interest rate applied to default fees were 25% applied simply the argument is fairly clear to in that you would only be servicing the principal charge at pennies per month.

 

I don't have any statements, just a transaction history. But on the application form I signed says that the min payment is 2% and cash interest after the first 6 months will be 20%. It then says the APR does not take into account any of the following alterations. We may from time to time alter the interest rate on any item, alter any charge under this agreement and alter the basis on which any interest is charged or any charge under this agreement is made?

And also: We will charge interest on the outstanding amount of - (b) any interest at the rate then applying to the relevant transaction or charge?

 

And - We will charge interest on the outstanding amount of: (b) a Cheque transaction, charge under condition 13.1 and interest, starting on the date when the amount is first debited to the account, and ending on the date of full payment.

 

When translated into proper English, is there anything relevant I can use here? especially the last part

 

Many thanks

Up2

 

ps, there is no 13.1 contained within this app

[Mike_hawk]

I'd try to keep it simple and let the other side argue against. The is purely to overcome limitation at trial, if the judge finds it plausible the case proceeds regardless of the other sides protests of limitation bar. It would be interesting to know if the original app form contained the terms relating to default charges.

 

Use the figures you know and can evidence, £25.00 charged at 20% annual simple interest with min repayments of 2% gives an initial payment against the charge of about 8p after the first months application of interest. At that rate the repayment period would be something in the region of 15 years allowing for the declining balance.

 

It may have an immediate response if it could show a zero balance at any period post charge/s (I couldn't see any instances within your attachments) or it could argue that having assigned its rights the last transaction on its records would set the bar.....although I think the cca definition of creditor and its rights and duties at assignment would swiftly overcome that one.

[up2meears]

Hi Mike,

 

No, the app doesn't contain anything about default charges, apart from what I typed in post #338. It does say near the beginning that these are provisions contained in 1 & 2 of the MBNA t&cs . The other conditions referred to in these paragraphs can be found in these t&cs. Needless to say it's been like trying to wade through syrup getting the rest of these terms from them. They did however provide me with ones post 2006 (the charges are listed at £12) and informed me that this is completely adequate. None of the terms referred to in the app match the new t&cs

 

I'm going to try and work out one charge like you mentioned above, so I will be back with the result or for help and more hair - bet you can guess what will be first lol

 

Up2

[up2meears]

So I have had a bash at one charge. I only did a year as I wanted to make sure I was on the right track.

 

Also, when it comes to assigning accounts to third parties does the OC have to default the account before selling it on?

 

Thanks

Up2

[Mike_hawk]

Simple interest only for charges so the 20% would be divided by 12 charging cycles in a year based on mbna's usual terms for interest... £25.00 charge would incur something like 42p interest in the first charging period so if you repaid at 2% you'd pay circa 50p and reduce the principal charge by 8p. Even without interest applied an element of the charge would still persist at month 55 (reducing effect of balance/min payment).

 

I think if you could view each charge as a purchase you would see how ridiculous it is for a creditor to use the LA as a shield when the 'purchase' repayment continues to be demanded (and paid at relatively small instalments) long into the future.

 

If pressed on the issue it will need to show any/all notices of variation and those at issue of new credit token containing the contractual charge. If it's charging £25.00 where is your agreement or meeting of minds agreeing same?

 

Defaulting account, not necessarily.... you only have to look at the Egg saga's on here to see that perfectly serviced accounts can be assigned without defaulting.

[up2meears]

Morning all,

 

Unfortunately, my day job has felt like a 24 hour job and time has slipped away all too quickly, but the hearing is in a couple of weeks and I have spent the last two days researching how charges are allocated and trying to work out how much interest I have paid on each and how long it has taken to pay off each one (not quite there yet) but I have found the following:

 

As previously mentioned, MBNA have been unable to provide me with t&cs from 2000 when the CC was taken out. They have provided me with post 2006 (as the default charges are shown at £12 a pop) but not sure what year exactly - these t&cs do not coincide with the t&cs mentioned on the application form I signed.

 

Right, to start with in section 2 of the post 2006 t&cs the standard interest rate for card purchases, balance transfers, cheque transactions, money transfers cash transactions is 21.9%. It does not mention default charges. In 2d it says 'we will charge interest on all transactions, handling fees, and on interest you already owe, at the interest rate which applies to the relevant transaction set out in para 2. We will always charge interest on any card fee, service charges and default charges at the standard interest rate which applies to card purchases. We will not charge interest on the card purchases shown on your statement if you pay off the whole balance shown on that statement, and the statement before by the date payment is due. We will not charge interest on default charges until we have told you we will do so. We will not charge interest on interest you already owe in relation to default charges. We will charge interest on all transactions, handling fees, service charges, default charges (where applicable) and interest starting on the date they are incurred and ending on the date you pay the bill in full. We work out interest each day, so the earlier you make a payment, the less interest you will have to pay. If interest is payable on your account other than just for default charges, then the minimum interest charge we will make in any statement period is £1.00.

 

It then goes on to say:

We will use your payments to pay off balances at lower interest rates before those at higher interest rates (this includes any transactions you have made between the date of your last statement and the date we actually receive your payment) We also pay off any promotional offer interest rates before any standard rates. We will pay off any remaining balances in the following order: default charges and interest on default charges before other charges, fees and card purchases. Then balance transfers, cheque transactions, money transfers and finally cash transactions.

 

I have also found this website which talks about Positive Payment Allocation http://www.choose.net/money/guide/faqs/allocation-payments-clause-credit-cards.html

Which explains that until mandatory measures were put in place in 2011, CC companies could breakdown the allocation of your payments however they wanted, usually paying of the lowest interest parts first, leaving the higher ones to accrue more interest.

 

And surprise surprise MBNA were one of the companies highlighted yet again - it amazes me that wherever there are underhanded practices MBNA seem to be one of the companies mentioned and yet they still have a credit license.

http://www.choose.net/money/guide/news/mbna-payment-allocation-masks-hidden-costs.html

 

Is this information I could use in court to show that a default charge does in fact continue to live beyond the date it was applied?

 

Also, I know I probably have more chance spotting a yeti bareback riding the Loch Ness Monster, but if anybody has or knows where I can get a hold of MBNA t&cs for around Aug 2000, I will be truly grateful

 

Many thanks

Up2

[slick132]

Hi Upto,

 

I hope others will comment about what you need to include in your submissions.

 

I will also repeat your request for anyone to supply MBNA T&C's for August 2000 or anywhere near that date.

 

[up2meears]

Hi Upto,

 

I hope others will comment about what you need to include in your submissions.

Thanks Slick, appreciated

 

I will also repeat your request for anyone to supply MBNA T&C's for August 2000 or anywhere near that date.

Funnily enough, I have received the other sides WS and included were terms that look like they could possibly be from around that time (I wonder if they have been following my thread and are answering my request lol) I have scanned them and will convert them to PDF to post as I can not see anything contained within them regarding default charges or anything similar to what I posted in #343 above.

 

 

Thanks Slick

[up2meears]

My mistake. It looks like there should be more pages of the t&c and they have only exhibited the first page - so the hunt is still on please

 

I do not believe this company - I have just been going through their WS again and they refer to term 13 on the t&c regarding the charges (although they have not directed it to the exhibit) - when I've looked at the numbered pages their exhibit goes from page 3(1st page of t&c) to page 5 - No page 4, which I presume is page 2 of the t&cs with the info I actually need to know!!!!!!!!!!

 

Can I send an email to them requesting this missing page? Years on and they are still playing games it seems

 

MBNA beggers belief.

 

Up2

Edited July 16, 2014 by up2meears
Additional info

[suvin50]

I have T&Cs from 1995 when the charges were £5 for OL and late payment.

[up2meears]

I have T&Cs from 1995 when the charges were £5 for OL and late payment.

 

Thanks Suvin, but the charges where £18.00 so t&cs probably changed alot in that time. Many thanks though

 

Up2

[Mike_hawk]

Seems sensible to ask your mate at MBNA to supply the missing data. I wouldn't be inclined to compile a history of how you believe payments reconcile with balance demands, it is relying on limitation and/or the terms applied, you only really need show the DJ that no bar exists (and for him to agree) to reverse the burden of showing whether the contractual term/s were fair and not penury at application.

[up2meears]

Hi Mike,

 

So, do you think it will be okay to use a well drafted explanation of how they prioritise the interest on transactions rather than compiling examples? I will however need sight of the elusive page 2 of the t&cs to see how they applied them back then. I would imagine going by the terms used in post #343 that it was pretty much the same until the positive payment allocation came in to play, but I can't assume anything at this point.

 

I sent an email to them explaining that page 4 of their exhibit was missing and asked if she could send me a copy asap. The more I think I need this 2nd page to help with my argument, the more I am starting believe it was omitted on purpose. I have been asking them for these t&cs for years, and when they finally decide to provide them, they have left out the important bit. I know people make mistakes but this company seem to make too many 'co-incidental' ones

 

Do you think the Court would provide a copy if I asked?

 

Up2