Is this extortion?

[Farmerman]

I have had a business account with Barclays for in excess of 10 years.

 

When I bought my second machine 4 yrs ago I requested a 3 month extension of my £1500 overdraft to £4000 to cover extra running costs etc.

 

They refused on the grounds that I had not previously kept within the £1500 limit.

 

Yes I had been over it occasionally but certainly not excessively and nothing was ever returned unpaid.

 

During that 3 month period my account went to £4100 OD and back to within its set limit again.

 

They never bounced a payment but charged me a fortune in paid referral fees and unauthorised OD interest. My charges that quarter were over £700.

 

Do I have a case for extortion against them as its obvious they were prepared to lend me the money required, but wanted to charge me more for the priviledge.

 

I was origionally prepared to let it go but I am now in the process of switching banks as they have got increasingly difficult to work with

and have literally turned their back on me and my business which last year doubled its turn over and could do the same again this with the support that Barclays are refusing me.

 

Hope someone can shed some light for me Thanks

[slick132]

Hi Farmerman and welcome to CAG

 

It certainly looks like extortion !! But whether you can get any of the fees back is another matter entirely.

 

Let me seek some input from the Site Team on this and we'll get back to you asap.

 

[Farmerman]

Ok thanks.

[dx100uk]

BCOBS???

 

 

dx

[slick132]

Have a look here - http://www.consumeractiongroup.co.uk/forum/announcement.php?f=7&a=220

 

Then look at "Examples of Unfair Treatment" - http://www.consumeractiongroup.co.uk/forum/content.php?827-Examples-of-unfair-treament

 

I assume you are a sole trader but not a Limited Company - is that right ?

[slick132]

Hi FMan,

 

Site Team Martin3030 has commented :-

 

As far as I know BCOBS gives some recourse for smcs

There is also scope for the test under s140 if there are elements under CCA.

Barclays won all of the challenges around the time of the test case because they maintained that terms and conditions for business accounts were materially the same as their other accounts.

Its only the tariffs that are different.

Edited July 15, 2012 by MARTIN3030

[Farmerman]

Thanks for that so far folks.

 

Yes I am a sole trader.

 

The charges themselves I have never disputed, they are written into my account contract with them. My argument with them is they had several options available to lend money to me, they left me with no other choice but to take the most expensive one, by means of unauthorised OD. In my opinion this was unfair treatment. As far as I can see BCOBS was put in place to stop this kind of unfairness happening, although I cant seem to find any cases similar to that of my own.

 

I was also given a business loan 18mths ago in which I was misled on the interest rate. part of the loan was for clearing an older loan at 10.9%. The new loan I was told would be the same. My own fault I know for not checking the paperwork when I signed the agreement at 22.9%!!!!!!

 

I have opened another account at a different bank in preparation for a move. My accountant thinks that given my current business circumstances, along with their previous treatment of my account, I should be able to get half of my £20k loan forgiven. . . . But this may mean proving that the above was unfair and using it as leverage.

[slick132]

Hi FM,

 

The use of BCOBS against the banks is relatively recent so there are very few cases which can be used as guidance.

 

If you hover over the BCOBS link, in the box that opens there are several more links that you can follow to research the subject further.

 

Re the loan 18 months ago, have you raised the issue of the interest rate difference with the bank at all. If not, you could start by speaking to whoever helped set this up and remind them of what they said about the 10.9% rate that would apply. See what they say and then follow up your complaint in writing. It would do no harm to mention BCOBS and the banks obligations in your letter.

 

Your accountant may or may not be right but I think your only chance of redress is using BCOBS to your best advantage.

 

[MARTIN3030]

Re: Help claiming business charges

 

recourse for

smcs

 

Sorry this was a typo and should have been smes

(Small and medium sized enterprises)

[Farmerman]

I have complained about the interest rate by telephone only so far, This was logged and I was given a reference number. Having had no reply I followed it up only to be told that their investigation found the loan interest was in accordance with the contract that I signed and the case was closed. Big suprise there... I've reopened the case on friday, also logging my disgust at the unauthorised OD mentioned above and I will be following up with an appropriate letter this week, As soon as I find an address to send it to.

[MARTIN3030]

Barclays Bank Plc

1 Churchill Place, London, E14 5HP

[slick132]

Make sure you head the letter, Formal Complaint, which should ensure they deal with it in the required manner.

 

[Farmerman]

Ok, I think I've probably got enough to be going on with, just one last quick one; Will it matter that my main cause for complaint with them happened before BCOBS was introduced?

 

Thanks very much for your help.

[slick132]

Yes, if the original issue arose before 2009, the older Banking Code of Practice would have governed events at the time.

 

However, you may be able to rely on BCOBS regarding the bank's treatment of you now, in response to your complaint.

 

Keep us informed please.

 

[Farmerman]

Further progression.

 

I was given a token gesture payment of £200 in response to my complaint.

 

I requested that they put the loan on hold till October when I will be able to clear the arrears in full.

 

They declined this request but would instead accept a £100 monthly payment till end of August to be reviewed then.

 

I have been working away this week and have just returned to letters from barclays telling me the £100 payment has been returned unpaid due to insufficient funds.

 

Ok I thought I will transfer some from another account and pay it on Monday. Today is Friday, 7pm.

 

I opened the next letter to find they are terminating my accounts with them and the full amount is to be repaid immediately ( before 21/9 ).

 

My account balance is £ -122. ok, no probs I can clear that.

 

My loan account, which started at £22k and has received £6875 in payments from me over the last 19months, is £22449.

 

I obviously am in no position to clear this, nor do I have any assets with any significant amount of equity.

 

When I get harvest monies in in October/ November....it keeps raining, harvest is late.

 

I should be in a position to make a settlement offer of around 40 - 50% of that total.

 

Is there any stalling tactics I can use?

[slick132]

Hi FM,

 

Given the banks decision to terminate, you need to ensure you have alternative facilities in place.

 

In your first post, you said you were in the process of doing this. Do you have new banking facilities in place and will they be more farmer-friendly.

 

Is it possible to get a new loan (from the new bank) to pay off the Barclays debts, or at least some of them.

 

Re their decision to close your a/c's, are they closing all a/c's you have with them.

 

How long have you banked with Barclays as this may help determine how "fair" they are being with you.