Angry Cat v Alliance & Leicester

[angry cat]

Thank You So Much Caro:)

 

Your Right, I will not let let this go, until I win..!!!

 

As I previously stated, I have all of my A&L mortgage statements. However, I have decided to send off for a full SAR then I will be able to disprove any suggestions of manual intervention. I actually have a tweaked preliminary letter waiting to be mailed, but I will wait now for the SAR...I don't want to fall at the first hurdle.

Hopefully I will receive that before the stat. 40 days.

 

I would gratefully receive any info. from anyone, that is in, or has any experience with claiming back mortgage penalties + ERC's.

 

I also thank kingliam for your interest:)

 

Love AC

[angry cat]

Sorry to jump in on your thread but... MOD NOTE - POST MOVED TO YOUR THREAD

I have been looking at the prelim. letter to claim back ERC's

 

I am at the first stage of claiming back an ERC from A&L and would like to use the above mentioned prelim letter. However, I also wish to claim mortgage charges/penalties. Can I use just the one prelim. by tweaking it a bit, or would it be more prudent to send two letters- one for the charges, one for the ERC?

 

Thanks

AC

[alanfromderby]

Best to keep it in the same letter, otherwise it will get confusing and could cause problems when you get to the claim.

[angry cat]

Oh my God Alan...!

I thought that I'd done something wrong!???

3 pm's saying thread removed....Phew...obviously all is Okay.

 

Now I have calmed down:)

 

Yes, I thought as much. One letter would be better; it is hard enough to get these guy's to read one conveyance of thought, let alone two!!

 

I just wanted to make sure that I am/will be absolutely correct, for when I have to Issue my Claim.

 

Have decided to send off my preliminary tweaked letter, to incorporate both ERC & Charges tomorrow and at the same time I will request the SAR. I have all my statements, therefore the SAR is just belt & braces and then of course, I can amend my Claim to incorporate any extra charges.

This whole issue has been on the boil for sometime, I then put it on the back burner to simmer, because I was concerned about A&L's actions. However, if I don't deal with it, the pot's lid will blow off very soon.

 

I really need you Goy's support.....

because I will take this matter to the very bitter end.

 

Love AC

[alanfromderby]

Will be keeping an eye on progress - all the best.

[zootscoot]

Hi AC,

 

Welcome to the mortgage forum!

 

Click the link on my signature which will probably proveide you with most of the answers to any questions plus template letters and particulars of claim.

 

In my case I have been charged £295.00 for redeeming my mortgage with the A&L early and I believe the charge is a penalty.

 

 

That sounds like the adminn fee they apply to end you mortgage early. Several people have been successful in claiming these back.

 

Best of luck

 

Zoot

[angry cat]

I had to wait a little while before sending my prelim off. However, the time is now right, so here goes:-

 

 

Customer Relations Department

Alliance & Leicester plc

Carlton Park

Narborough

Leicester

LE19 OAL

 

 

Dear Sir or Madam:

 

REVISED REQUEST FOR REPAYMENT OF CHARGES – ACCOUNT NUMBER XXXXXXXX

 

Request

 

We are writing to ask Alliance & Leicester to refund the early redemption charge of £235.00, (19/10/2006) we are also asking you to refund the charges which you have levied from the account over the last 6 years, in respect of late payment fees to the sum of £625.00, the sum of £136.21 representing the contractual rate of interest applied by yourselves in respect of the said charges (Please find enclosed schedule of charges, detailing dates, amounts and interest. We now understand that the regime of fees, which Alliance & Leicester have been applying to the account in the form of penalty fines and the early redemption charge, which are Unlawful at Common Law, Statute and recent Consumer regulations and are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Subsection 1(e) of the said regulations gives a non complete list of terms which may be regarded as Unfair; such as a term which requires the account holder / consumer who fails in his / her obligation, to pay a disproportionately high sum in compensation.

 

Having taken legal advice on this matter, it is very clear, as you no doubt will be aware, that English contract law requires such charges to be a genuine pre-estimate of your losses. In the Scottish 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. In the English cases of Wilson v Love [1896] Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79; Ford Motor Co v Armstrong [1915]; Bridge v Campbell Discount Co Ltd [1962]; Murray v Leisureplay [2004]. In addition to this, your charges represent unfair terms (see; Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083), reference paragraph 1(e) of Schedule 2).

Your penalty charges/early redemption charges are disproportionately high. Therefore they are contrary to the Unfair Terms in Consumer Regulations 1999. In addition I understand that your charges are a penalty and thus unenforceable under English Law.

 

We would also draw your attention 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 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 at Common Law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations.

The fact, that we signed the mortgage offer containing the term relating to the early redemption charge/penalty charges does not make these terms enforceable as I’m sure your legal department are fully aware.

 

Your responsibilities

We would draw your attention to the terms of the contract which you agreed to at the time that the account was opened. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner that complies with UK Law.

 

We are frankly shocked that you operated our account in this way as we had always reposed confidence in your integrity and expertise.

What is required?

 

A calculation of what Alliance & Leicester plc, have taken is £860.00 plus the compound interest calculated on a daily rate, which you have charged as interest for the sum which you have taken, which makes the total amount claimed £996.21

 

Resolution

It is hoped that you will respond with a sincere dialogue about this most serious matter and this letter has been written on the assumption that Alliance & Leicester plc, will prefer to respond personally, rather than attempting to answer with standard and/or computer generated type letters.

Please reply with in 14 days, accepting unconditionally this request in principle and advise a date by which payment will be received.

If you do not respond or you do not respond positively within this time period, we will send you a letter before action giving you a further 14 days in which to reflect. We believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

Yours faithfully,

 

AC".

 

The above letter will be posted on Monday, unless someone suggests amendments,

 

Love AC

[caro]

235.00 seems quite a small amount for an early redemption fee AC. Could it have been an exit admin fee? If so, there's a temurtplate for that here. http://www.consumeractiongroup.co.uk/forum/mortgage-companies/71299-mortgage-exit-admin-fees.html#post613959

 

If it is definitely an early redemption charge, you should know that people lost cases in court fighting these, so you can't really claim them. http://www.consumeractiongroup.co.uk/forum/mortgage-companies/62003-important-mortgage-claimants-please.html?highlight=maroonfox#post523486

 

I would advise you not to claim contractual interest either unfortunately.http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost.html?highlight=halliday#post907281

[angry cat]

235.00 seems quite a small amount for an early redemption fee AC. Could it have been an exit admin fee? If so, there's a temurtplate for that here. http://www.consumeractiongroup.co.uk/forum/mortgage-companies/71299-mortgage-exit-admin-fees.html#post613959

 

If it is definitely an early redemption charge, you should know that people lost cases in court fighting these, so you can't really claim them. http://www.consumeractiongroup.co.uk/forum/mortgage-companies/62003-important-mortgage-claimants-please.html?highlight=maroonfox#post523486

 

I would advise you not to claim contractual interest either unfortunately.http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost.html?highlight=halliday#post907281

 

 

Hi Caro,

It's an exit fee! although A&L call it 'Redemption and Sealing of Deeds'

 

I have taken your advice and will send the following letter re the exit fee. I am just drafting another letter, in which I will re-claim the Arrears Charges.

 

"Alliance & Leicester plc

Carlton Park

Narborough

Leicester

LE19 0AL

 

Dear Sir or Madam:

 

MORTGAGE ACCOUNT NUMBER XXXXXXXXXXX

 

Following the publication of the FSA’s statement of good practice regarding mortgage exit fees. I now believe that the exit fee we paid is both unfair and unenforceable.

 

At the time we took out our mortgage on 16 July 1991, the published rate for exit fees was £60.00. However, when we redeemed our mortgage on 19 October 2006 the fee charged was £295.00. According to the FSA this variation in price can only be sustained where there exists a valid reason such as increase in providing the service.

Furthermore the FSA states:

 

“If a MEAF term is drafted to enable the lender to recover the cost of the administration services which a lender provides when a customer exits the mortgage, the lender should ensure that the MEAF represents in fact the cost of the cost of the lender’s administration services. A failure to do so is also likely to be a breach of contract”.

 

We thus require you to provide us with a breakdown of the costs in administrative services in terminating our mortgage in order to ensure us that the fee we paid was in fact lawful and fair. In the event that you have over charged in relation to your actual costs we require you to refund the difference.

 

Yours faithfully,

 

AC".

 

Is there a specific template for reclaiming mortgage penalties? I was going to use the regular penalty charge one. Also I realise that one cannot claim back the compounded interest due to the high court case, but surely one can claim back the interest that was in relation to the charges.

 

Love AC

[angry cat]

I am also sending this letter which is in relation to the mortgage charges.

 

Customer Relations Department

Alliance & Leicester plc

Carlton Park

Narborough

Leicester

LE19 0AL

 

Dear Sir or Madam:

 

MORTGAGE ACCOUNT NUMBER XXXXXXXXXXXXX

Our Request

 

We are writing to ask you to refund the charges which you have levied from our account in respect of late payment fees to the sum of £625.00, the sum of £136.21 representing the interest applied by yourself in respect of the said charges (Please find enclosed schedule or charges detailing dates, amounts and interest) and. We now understand that such fees are unlawful at Common Law, Statute and recent consumer Regulations.

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 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 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). Our account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as we are consumers. 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 which have the object of requiring any consumer who fails his obligation to pay disproportionately high sum in compensation. We would vigorously contend that this is the position regarding the fee £625.00 which you deemed fit to apply to our account.

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.

We believe that the charges you have levied of £625.00 far exceed any true cost to yourself as a result of our breaches and any genuine pre-estimate you could conceivably reach. If you disagree, then will you please demonstrate this by letting us have a full breakdown of the costs to which you have been put to as a result of our breaches, in order to reassure us that your charges really do reflect your costs.

We really hope that this matter can be resolved amicably and without the need for redress to the courts. Thus we are asking that you refund the charges which have been unlawfully been levied on our account. Failure to refund all the money unlawfully taken from us will result in us taking further action. We will give you 14 days to reply accepting, unconditionally, our request in principle and letting us know a date by which we will receive payment. If you do not respond, or you do not respond positively, within this time period, we shall send you a letter before action giving you a further 14 days in which to reflect. We believe that these targets are more than sufficient for a large company such as yours with dedicated staff departments.

After that, there will be no further communication from us and we shall issue a claim at the expiry of the second deadline. Thus take this letter as 28 days written notice of our intention to issue a court claim should you not comply with our request. We hope that you will enter into a sincere dialogue with us about this matter and we are writing this letter to you on the assumption that you will prefer to do this, than merely respond with standard letters and leaflets.

 

Yours faithfully,

 

AC".

 

Love AC

[angry cat]

Hi Guy's

 

Well, I have received a cheque from A&L for £285, which is in relation to the Redemption & sealing of deeds fee. The actual charge was £295, so they have deducted £10 from that fee, which is a more appropriate amount and refunded me the difference. Step 1 completed.

 

Re the other charges of £625 + interest, I will be sending a LBA on Wednesday 15 August '07.

 

Love AC

[dpick]

Hi Guy's

 

Well, I have received a cheque from A&L for £285, which is in relation to the Redemption & sealing of deeds fee. The actual charge was £295, so they have deducted £10 from that fee, which is a more appropriate amount and refunded me the difference. Step 1 completed.

 

Re the other charges of £625 + interest, I will be sending a LBA on Wednesday 15 August '07.

 

Love AC

 

Nice one for first part will be watching part two

dpick:D

[zootscoot]

Well, I have received a cheque from A&L for £285, which is in relation to the Redemption & sealing of deeds fee. The actual charge was £295, so they have deducted £10 from that fee, which is a more appropriate amount and refunded me the difference. Step 1 completed.

 

 

Congratulations

[caro]

Congratulations AC.

[angry cat]

Thanks Guys!

 

Now to stage 2, the claiming back of charges.

As you know I sent off my prelim and today I have received a response, which shows that this next step is not going to be so easy

The A&L letter reads as follows:-

 

"Dear AC

In line with other lending institutions, it is our policy to charge for letters when accounts are in arrears. Our right to make charges for the additional administration that results from accounts in arrears, is stated in the Terms & Conditions of the mortgage.

 

The copy of the Terms & Conditions was supplied at the time the mortgage offer was made. These state that payments are required each and every month. On accepting the loan, you accepted and agreed to adide by those terms. By not maintaining payments you defaulted in the agreement.

 

As the charges were not made in error, I am unable to justify your request fro any charges to be refunded.

 

I will keep your complaint file open for 8 weeks to give you time to consider my response; if I have not heard from you by then, I will regard your complaint closed.

 

At Alliance & Leicester we aim to resolve all complaints internally; however we recognise that there may be occasions where this is not possible. If we are unable to agree a way forward, you may be able to ask the Financial Ombudsman to review your complaint. For information, I enclose a copy of our leaflet, which explains how to do this and would be pleased to help you if you wish to take this step.

 

Yours sincerely

 

Pam Green - Customer Relations Manager, Collections Department".

 

Okay, well I expected to receive the bog off letter!

Letter Before Action going off today.

 

Love AC

[dpick]

Hi AC looks like a standard stop bothering us we will try and bluff you letter just carry on with LBA now I would say.

I wanna see how they justify £25 for a letter to me just another way of applying a penalty charge

all the best dpick:)

[angry cat]

Yes, I agree standard bog off letter, well they were hardly going to refund the charges just because of my prelim!

I have sent off my LBA asking them to justify fees of £25 - £35 for sending letters and...if they can't, then refund me the money!

A&L have 14 days after that I will issue a county court claim.

 

Love AC

[angry cat]

Hi Guy's,

 

Well as you know I sent off the template LBA re Mortgage Penalty Charge.

Clearly A&L won't play ball as I have today received the following letter in response to my LBA-

 

"Dear Angry Cat

 

Thank you for your letter of 16 August.

 

The issue of charges has been covered on several previous occasions. You were aware for a number of years of our policy to charge when letters were issued requesting outstanding monies. Opportunities were given for you to avoid arrears letters and the possibility of charges.

Unfortunately, you chose to ignore or disregard all offers.

 

The charges were not applied in error and there is no justification for them to be waived.

 

However, I note your intention to pursue recovery of the charges.

 

Yours sincerely,

 

Pam Green - Customer Service Advisor, A&L."

 

An odd and very short letter. I asked A&L to justify the charges, or refund the money.

 

So, now it is time to issue an N1. I note that there is a template for a MCOL here:-

http://www.consumeractiongroup.co.uk/forum/show-post/post-694353.html

 

Does anyone have a full POC suitable for an N1, or is the above sufficient.

 

Also, I was going to claim the interest as well as the charges but that looks dubious now? Is this correct, that we cannot claim the interest that accrued on the charges now?

 

However, I will claim the County Court Stat interest of 8% in addition to the charges.

 

AC

[angry cat]

Bump

[angry cat]

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