Court action against Nationwide

[sam1967]

Hi, I've been in dispute with the Nationwide for the last 12 months, regarding unfair charges and incorrect data on my credit files. We have not been able to come to an agreement so I am considering starting court action in the next few weeks. First I will list a history of the account:

 

2008 Open an account, asking for a "kiddie account" with no credit facilities

 

2010 Hit with a couple of unauthorised overdraft charges due to weekend transactions not registering and then being taken out on the Monday. Charges refunded when I called to complain and informed them of my financial situation.

 

2010 Stop using the account leaving it £0.44p in credit. I receive no further communications from Nationwide.

 

2010 Small value (

 

2010 Over the following months, "unauthorised overdraft" fees and interest are charged on the £150 DD fees, until the "debt" rises to over £350. The account is then terminated and defaulted.

 

2010-2014 I receive no communications from Nationwide and have no knowledge of there being any issue with my account. I was turned down for a job and a loan during this period due to my credit file, but I presumed that this was due to missed payments on another account from many years ago.

 

2014 Apply for Business account with my current bank. Credit facilities are refused due to my credit file. Now I know for sure that there's an issue because there should be zero adverse info at that point.

 

2014 April Apply for credit file and see default from Nationwide. I submit dispute with the CRA's to have the data corrected. Request is refused as Nationwide inform them that the data is correct.

 

2014 I submit an e-mail complaint to Nationwide. They pass this complaint to MKDP debt collectors who happen to have just purchased the debt from Nationwide. MKDP reply and inform me that they now own the debt and that I must pay.

 

2014 I call MKDP who are surprisingly helpful when I call to explain. They put all collection on hold and agree to obtain all the statements for the account which takes several months. Meanwhile my new business is struggling due to cashflow and I still have default on my credit file, now listed twice as MKDP have entered their own default.

 

2014 I have to close my business as despite it being profitable, the cashflow issues were too great. I receive statements from MKDP and piece together what happened. I write a letter of complaint to Nationwide.

 

2014 Nationwide agree to recall debt from MKDP and write off charges, but not cancel them. This means that I'm not chased for the "debt" but that they stay on my credit file.

 

2014 I write further letter of complaint saying that their response is not acceptable.

 

2015 I receive reply where they admit that they have no record of me being issued a default notice, so they now offer to remove the default, write off charges, but not cancel them and offer me £100 compensation for the incorrect default. I reply telling them that this is not acceptable.

 

2015 Feb They remove default from my credit file, but then mess up the update and change my account to being "code 6" delinquent for every month up to Dec 1014! MKDP remove all their records from my credit file.

 

2015 I call up Nationwide to inform them of the new issue they have created on my credit file. They send out a letter promising to correct the new error within 6 weeks. They offer a further £100 compensation for the new error, but they state that to accept the total £200 compensation, it must be in settlement of all my complaints, including the unresolved complaint of the original charges. I offer to accept the £200 in settlement of the two errors, but that I reserve the right to continue the complaint regarding the original charges, because although Nationwide has written off the "charges debt", the record of it on my credit file will remain. Nationwide refuse this offer and I receive no compensation.

 

2015 I write letter of complaint to the CEO. This is passed to head of collections, who recommends complaining to the FOS and that they will ignore further letters from me.

 

2015 Six weeks have passed and incorrect data is still listed on my credit file. I am now a full time student in financial difficulty and I cannot get access to student overdraft facilities due to this current adverse data, which is causing me considerable stress and difficulty.

 

Sorry it's so long, but it does cover everything. I've only got around to making a SAR request in the last few days, so I can't submit a claim until I receive the paperwork as I want to double check exactly what letters they sent me. But even before I receive the SAR paperwork, I want to prepare my claim and make sure that I submit everything 100% correct. The laws which I think they've breached include:

 

Unlawful termination

Unlawful default

Breach of contract

Unfair treatment

Unfair terms

Data protection act (passing on letter to MKDP)

Data protection act (Incorrect data on credit file)

 

As a starting point, exactly which laws should I read into more and are there similar cases that it's worth looking into? Also I would really like to claim defamation because that's what they're doing, but I've read elsewhere that defamation cases are highly risky and expensive, so I guess I'll leave that.

 

One problem is claiming damages. I've read elsewhere that you have to show a breach of contract and law and the hardest part is that you have to show quantifiable damage. How do I quantify the damage to my business and credit rating? When I submit a claim, do I have to state a maximum that I am claiming, because if this is a high value, then isn't the court fee really expensive? Can I claim damages for the stress and hassle that this has caused?

[citizenB]

Moved to the correct forum - you need do nothing, it is purely administrative.

 

Someone will look in on you soon as they can

[steampowered]

Hi

 

Do you have it in writing that the default was correctly issued? Did the bank tell you why it offered to refund the charges but not remove the default?

 

The bank will probably argue that your account was technically in default so it might be difficult to convince a judge that the default was wrongly applied.

[sam1967]

The whole "debt" is made up from their charges

- without their charges the account would still be £0.44p in credit,

my original complaint was to remove the charges, which would then result in the default being removed anyway.

 

 

Nationwide later admitted that they had no record of a default being issued and I have this in writing.

And they never have offered to refund the charges

- which is really what has created the issue.

 

 

They have only agreed to write off the charges, which means they won't try and collect them from me, but they stay on my account.

 

 

This means that they stay on my credit file as an unpaid debt, even so the default has now been removed (after 4.5 years and numerous complaints).

I can also show that the default caused me financial loss and distress but not that clearly.

 

The recent incorrect data they've added almost seems to be out of spite and they still haven't made any request to the CRA's to correct it,

despite telling me via letter that they would.

 

 

I've been through all their complaints procedure and sent a letter to the CEO,

so I can now either wait another year for the FOS to slap their wrist,

or I can take it to court and hopefully get it resolved much quicker.

[steampowered]

Hi, sorry to be so slow responding to you on this. Busy week.

 

If nationwide have agreed to write-off the charges wouldn't it show as satisfied? It seems odd to me that it would be marked as still outstanding.

 

For inspiration you can have a read of https://www.supremecourt.uk/decided-cases/docs/UKSC_2012_0135_Judgment.pdf. With this in mind your claim should allege that the incorrect data is a breach of your bank's duty of care. You can also look up Foster-Burnell v Lloyds Bank.

 

On the grounds you have suggested, I would take out unlawful termination as I don't understand what you mean by that. I'd also forget about the data protection stuff re: passing to MKDP as you would have consented to the bank passing data to collection agencies in your contract with the bank. The items which you do include need to be researched and properly thought through; don't just throw a bunch of random buzz-words at the court because the judge is not going to research things for you.

 

As a starting point, exactly which laws should I read into more and are there similar cases that it's worth looking into? Also I would really like to claim defamation because that's what they're doing, but I've read elsewhere that defamation cases are highly risky and expensive, so I guess I'll leave that.

It is not necessary to claim 'defamation' as you can claim for breach of the bank's duty of care not to make false statements (also known as negligent misstatement). You don't want to claim defamation because that begins to take you out of small claims territory, and if your claim is not treated as a small claim you will have to pay the bank's legal costs if you lose.

 

One problem is claiming damages. I've read elsewhere that you have to show a breach of contract and law and the hardest part is that you have to show quantifiable damage. How do I quantify the damage to my business and credit rating? When I submit a claim, do I have to state a maximum that I am claiming, because if this is a high value, then isn't the court fee really expensive?

In theory, yes you have to show quantifiable damage. However the courts have been quite lenient in applying this concept. If you have suffered some genuine financial loss or inconvenience but can't put a number on that, such as difficulties obtaining credit, then you have to claim something that is reasonable in the circumstances considering the seriousness of what you have suffered. Read the Durkin case I linked to get an idea of how this works.

 

You will have to make a reasonable estimate and pay the court fee accordingly. It is pointless claiming something sky-high - keep it realistic as otherwise you lose credibility.

 

Can I claim damages for the stress and hassle that this has caused?

No, you can't. In theory you can claim for time spent on the actual litigation at £18 an hour if successful, but this would usually only be awarded if the court finds that the bank behaved unreasonably in conducting the litigation.

 

The other point to mention is I wonder how old these defaults are? They should drop off your credit record after six years.

[sam1967]

 

If nationwide have agreed to write-off the charges wouldn't it show as satisfied? It seems odd to me that it would be marked as still outstanding.

 

They haven't written them off and that's the issue. They've only agreed to stop chasing the charges and therefore they are saying that the data on my credit file is correct. If they removed the charges, then my account would never had gone overdrawn, and my credit file would be clean.

 

 

On the grounds you have suggested, I would take out unlawful termination as I don't understand what you mean by that.

 

They closed the account without me asking them to. Is that not classed as breach of contract and unlawful termination of contract?

 

 

 

In theory, yes you have to show quantifiable damage. However the courts have been quite lenient in applying this concept. If you have suffered some genuine financial loss or inconvenience but can't put a number on that, such as difficulties obtaining credit, then you have to claim something that is reasonable in the circumstances considering the seriousness of what you have suffered. Read the Durkin case I linked to get an idea of how this works.

 

You will have to make a reasonable estimate and pay the court fee accordingly. It is pointless claiming something sky-high - keep it realistic as otherwise you lose credibility.

 

I don't have proof of losing the job offer due to adverse credit as it was all done via letter and I didn't keep the letters

 

I have proof of my bank refusing credit facilities for my business account due to adverse marks on my credit file.

Then I have financial records which can demonstrate the cashflow issues that the business suffered

and the lengths I had to go to in obtaining short terms from family and friends.

 

 

The business had an underlying profit of around £1500pw, but every few weeks I would be in a situation where

I had a large staff bill but was awaiting payment from customers.

 

 

I had to lay off staff twice, due to calculating that I wouldn't be able to pay them the following week.

I took most of them on again when the payments came through,

but after the second time it basically ended the business despite the underlying profit.

 

I have proof of being refused credit for a TV which was on sale with £750 off the RRP at the time.

 

I have proof of recently being refused student overdraft and loan facilities - money which I was relying on to live on while I study.

 

I also have a load of costs from signing up to the CRA websites.

 

 

You will have to make a reasonable estimate and pay the court fee accordingly. It is pointless claiming something sky-high - keep it realistic as otherwise you lose credibility.

 

I'm not intending to claim more than £5000. Does that seem reasonable considering the above? The fee for starting a claim for £5k seems to be around £200

 

 

 

The other point to mention is I wonder how old these defaults are? They should drop off your credit record after six years.

 

Well the data was due to drop off at the end of next year but since their recent error which they still haven't corrected,

it changed the account to being closed on Dec 2014, so unless that's corrected, then it's on there for another 6 years.

 

Also just to be clear they have removed the default, but left the delinquent account markers caused by the charges which they wont remove.

Now their recent mistake has made my account have a code 6 delinquent marker for every month up to Dec 2014.

[dx100uk]

BCOBS?

 

 

dx

[sam1967]

The BCOBS looks useful, but I can't find many examples of other cases actually using it. I read the Durkin case and there's some useful stuff in there. It seems that he was awarded £8000 for damages for the inconvenience, but where he made specific claims for damage, it seems they were thrown out for not being quantified enough? Also I think I may of read somewhere that because the Durkin case was in a Scottish Court, there's other cases in the English courts that carry more weight? I think I will increase the claim to £10000, because's less than two months earnings from the business I closed.

 

I think I have a pretty strong case, because they've wrecked my credit file for the past 5 years and for at least the last 12 months I've tried numerous times to correct it without success. Now they're ignoring my letters, I feel that court is the only option. The recent mistake that they've made has made my credit file worse than ever and yet without those marks my file would be clean. The £2000 student overdraft which I was intending to live on, is offered to all students provided they have a clean credit record so Nationwide are directly causing me substantial hardship.

[steampowered]

The Durkin case can still be cited. Scottish and English contract law take the same approach on this, and the appeal was ultimately heard by the Supreme Court.

[sam1967]

I've received the SAR documents today. As I suspected, Nationwide made no contact with me regarding the returned DD's and default, which seriously strengthens my case.

 

So to summarise:

 

• They applied excessive charges for returning very low value DD's and these charges then made me overdrawn.
  
• They did not inform me of this or make any contact.
  
• They snowballed additional charges for being overdrawn (due to their original charges)
  
• They closed my account and did not inform me of this or make any contact.
  
• They applied a default to my credit record and did not inform me of this or make any contact.
  
• The default was on my credit file for 5 years and had a significant effect on my ability to obtain credit and employment.
  
• I have proof of the damage caused by my inability to obtain credit.
  
• It took 12 months and numerous letters to remove the default once I became aware of it.
  
• After recently removing the default, they then made a further mistake on my credit file which has made it even worse.
  
• After promising to rectify the recent mistake, they have failed to do so and it has further affected my ability to obtain credit which is causing me significant hardship.
  

 

I'm thinking of claiming under the BCOBS regulations. Would I break down each of the points above explaining the unfairness and breach of each point, or would I just submit it all and claim the unfairness of the whole situation (if that makes sense)? Also I'm sure they have broken other regulations other that the BCOBS, so should I also use these other regulations as part of the same claim?

 

Also if I was to use the Durkin case as guidance for compensation, I presume I would have to claim on the same legal points as the Durkin case? Durkin was claiming under the CCA regulations.

Edited April 13, 2015 by sam1967

[nellyj99]

Hi Sam,

 

I'm going through litigation on something very similar. You may find this document useful for DPA breaches.

 

http://www.experian.co.uk/www/pages/downloads/compliance/guidance_on_defaults.pdf

[sam1967]

Thanks nelly, I happened to find your thread last night and it does seem like a similar situation. I'm really not sure how to make the claim, as it looks like they're in breach of all kinds of things such as CCA, DPA, BCOBS and UTCCR. I want to make the claim as concise as possible, but I also want to make sure that I cover everything to improve my chances of success.

[nellyj99]

I'm not the best for advice as I've had a lot of support from this site.

 

Have you issued a letter before action?

 

Have you sent a subject access request if not do that today.

[BankFodder]

On the face of it it looks if you have a good basis for bringing an action for breach of contract – in that your account has been mismanaged.

 

Breach of the Data Protection Act and also breach of the Banking: Conduct of Business Regulations – (BCOBS)

 

There has been only one case that I know of which has been brought in the County Court under BCOBS and which has resulted in a judgement. This was brought by our user – madpriest – against Santander because they started bouncing his cheques when he had money in the bank.

 

However, that was a default judgement because Santander are as incompetent about litigation as they are about running a bank. Nevertheless, they coughed up £4000 plus also they paid the costs of putting the sheriffs in which came to about another £2500.

 

We have had a couple of other cases based on BCOBS – but they never got to court because the banks paid up in order to avoid the hearing. I can tell you that the settlement figures were quite spectacularly large.

 

BCOBS has been around since 2009 and despite lots of efforts on this forum to get people to take BCOBS actions against their banks, almost nobody has bothered. Yet it seems to me that the banks would rather pull their own nails out then get a BCOBS judgement.

 

You can try if you want. We will help you.

 

Are you sure that the SAR is complete?

 

In terms of these job refusal letters, you could send an SAR to the companies who turned you down and this could be a very good idea.

 

The final thing is that although it seems that you might be in a position to claim a high level of damages, I think that you should be very careful to keep it less than £10,000 – and comfortably so. You really don't want to risk your claim being fast tracked – although once it is allocated and you start to get more dirt, you can think about amending the claim and increasing the amount and it is unlikely to be reallocated. However you have to tread with care.

[sam1967]

Aghhh I wrote a big long post and then accidentally clicked a link and lost it!

 

Anyway, I'm happy to go all the way with this and I'm confident dealing with legal matters and going to court, though I'm under no illusions about the amount of research and time and it will take.

 

 

Are you sure that the SAR is complete?

 

In terms of these job refusal letters, you could send an SAR to the companies who turned you down and this could be a very good idea.

 

I'm not convinced the SAR includes everything, as it's just statements and then the details about my recent complaints. There's no info from their call centre logs etc, but what can I do - the SAR request was worded correctly to obtain all data.

 

Regarding the job offer that fell through, I can't remember the details and I have no records, but I note that in the recent Oliver Foster-Burnell case, he also had no evidence. The main part of my claim for loss/damage is the effect on my business. The business was closed due to cashflow problems being insurmountable despite the underlying profit in the business. Loss of future profits is hard to quantify and they could certainly argue over the figures, but I do have accounts showing the underlying profit and the cashflow problems. I also have proof of the bank refusing credit and also proof of small loans I was forced to take off people, but after a while I needed more than they could offer.

 

I have proof of being refused credit on a £1500 TV which was on offer at £730.

 

My current situation of being refused a student overdraft might not be considered a loss, but in a way I was relying on it as a form of income as many students do. This is having a serious and ongoing effect on me - I literally have no money to live on due to this.

 

The final thing is that although it seems that you might be in a position to claim a high level of damages, I think that you should be very careful to keep it less than £10,000 – and comfortably so. You really don't want to risk your claim being fast tracked – although once it is allocated and you start to get more dirt, you can think about amending the claim and increasing the amount and it is unlikely to be reallocated. However you have to tread with care.

 

As the majority of my claim is related to my business closing and therefore loss of future profits, how should I do this. Also I feel I should expect a fair bit of compensation for distress and inconvenience.

 

One 'benefit' of being completely skint is that I shouldn't have to pay any court fees. Should I make the claim for £6k, so that I can then up it without the court fee being increased? How can I justify increasing the claim amount once the claim has been made? To be honest, I would much rather leave the whole assessment of level damage to be made by the judge, unless you can show me how a damage claim such as mine would be calculated. Is there some kind of guidance anywhere?

[BankFodder]

... but what can I do - the SAR request was worded correctly to obtain all data.

 

If there is data missing then I don't understand why this is your attitude – what can I do? –

 

You should write to them and complain and tell them that the data disclosure is not complete and that they have not complied with their statutory duties and that you want everything and that at the very least the call logs are missing as well as screen notes and internal memoranda.

 

Tell them that if you don't have the material you will be writing a letter of complaint to the information Commissioner as well as including their statutory breach in your particulars of claim when as you expect you bring the matter before the County Court.

 

It's not hard. If you up for it, then this is part of what you have to be up for.

[sam1967]

Okay I will write a further letter regarding the SAR. What I meant by 'what can I do' is that if they have already not given it, then maybe they don't have it or maybe they will continue to not send it. The SAR documents are actually quite well organised compared to some I have received from other companies in the past. It does include screenshots and other basic account data, but no call logs.

 

Also to correct an earlier post where I said that they didn't inform me of charges, on the statements the charges are listed, but I was not sent specific letters informing me of bounced DD's etc.

 

EDIT: When I say call logs, I mean historic call logs. They have sent the data from a system they seem to use in the complaints dept, and this does include call logs but nothing from before last year. I've just had a re-read through this data and it says the following (I think that 'collect' and 'portrait' are names of their internal systems):

 

"reviewing Collect & Portait for contact, there are many calls from collections but no contact ever made and many letters from us also. Looking at Portrait there is no record of any calls received from the member ever with the call centre either. So unsure what call centre the member discussed hardship with."

 

This shows that she can see call logs and records of letters - something that I have not been given via the SAR request. Also they have admitted in writing that I wasn't informed about the default, so it will be interesting to see if they send any historic letters.

Edited April 15, 2015 by sam1967

[BankFodder]

Okay. Now you need to understand that because by and large no one has dared or has been bothered to bring a BCOBS action against any bank, it is all rather experimental.

 

Some of the areas for action are very clearly within BCOBS and there is very little doubt of success.One example this this one here http://www.consumeractiongroup.co.uk/forum/showthread.php?442013-I-have-issued-a-Court-claim-for-an-incorrect-default&p=4720756#post4720756 where basically the NatWest bank is over a barrel, the claim has been issued, it hasn't even yet been transferred to the claimant's local court and yet the bank has upped their offer from an initial £250 to several thousands.

 

Read the thread.

 

Some of your claim is fairly straightforward. However, the part that I think is worth considering, is there initial decision to levy charges against you.

 

This strikes me as being very fundamentally unfair.

 

You had a basic account – which means that no overdraft is permitted.

They bounce to direct debit and applied a charge against the account which immediately put into overdraft. They kept on doing this. They levied charges on charges.

 

It seems to me that where they make a decision to pay the direct debit and then levy a charge, they might conceivably claim that they are offering a service. However simply to bounce a direct debit seems to me to be no service whatsoever.

 

You might consider bringing a BCOBS action for this – and because your overall losses seem to be fairly high, it seems to me that it might be an idea to try and claim simply for this initial unfair treatment with a very modest claim for damages – maybe less than a couple of hundred quid.

 

I expect that they would probably want to settle and it would be up to you to refuse to settle and to insist on going on to get a judgement. If you manage to get a judgement then the rest of your claim would fall into place without any problem at all and you could be confident about winning the amount of damages that you are looking for. Also course it would be a stunning victory further the thousands of other people who have been caught in exactly the same trap.

 

This is one way forward. If you lost the case then you wouldn't of loss very much. It would put the bank in a difficult position to defend on this apparently very small issue for a very small sum but the principle which will be established would be enormous.

 

You can treat this as a suggestion – and also the beginnings of a discussion about it if you like

[sam1967]

Firstly I've written the SAR follow up letter and just got back from the post box, so it's on its way. It was quite a long letter questioning them on specific points and also directly asking them if they have letters or any proof of letters regarding the 'debt'. I also referenced the sections of the SAR which suggest that they do have more data.

 

Secondly regarding the above post, I'm on exactly the same page as you, the thing that needs work is disputing the charges in the right way. I know it's unfair, you know it's unfair and I'm certain that presented the right way and District Judge will agree that it's unfair. My main concern is making some schoolboy error and giving them some kind of technicality to get it thrown out.

 

Also I've just noticed something else on my statements which might be useful, but will also make it a bit more complicated. A couple of months before I stopped using my account I paid a cheque into my account to cover a DD. I paid the cheque in 4 days before the DD was due to leave my account. The DD bounced as the cheque hadn't cleared, but according to this http://forums.moneysavingexpert.com/showthread.php?t=606491 it should have been okay after 4 days. That bounced DD, created it's own little snowball of charges which cost me £90. Without that little snowball, my account would have been £90.44 in credit rather than £0.44p and therefore the latter snowball wouldn't have occurred because the DD's would have been covered. (actually I would have withdrawn it as I'd stopped using the account, but hopefully you get my point!). I hadn't noticed this earlier because the statements show a cheque as being cleared straight away.

[BankFodder]

Thank you. That is very interesting.

 

Please can you check the source for this 2-4-6 scheme and post the link here and also the relevant extract.

 

Also, can you check the dates and make sure that your four days were four business days and that generally speaking the time period you are referring to qualified for the scheme.

 

Does 2-4-6 refer to clear days – in other words full days? Starting from midnight to midnight?

 

You need to be very careful that the bank doesn't find some little technicality such as – you presented the cheque on the morning of day one and this is why it hadn't cleared by the morning of day four when the direct debit was presented.

 

Go over the dates very carefully and let us know.

[sam1967]

I just found that link randomly from a google search when I was trying to find Nationwides cheque clearing timescales. It's a moot point anyway because after checking the dates on a calender, the period in question covers a weekend. It's still unfair though because my account at that point was only £16 short of covering the DD and yet it caused £90 of charges.

[sam1967]

Firstly I've written the SARicon follow up letter and just got back from the post box, so it's on its way. It was quite a long letter questioning them on specific points and also directly asking them if they have letters or any proof of letters regarding the 'debt'.

 

Well, I calculate it as 41 days today. Typical as it's one of the only letters that I've sent unrecorded and no doubt they've 'lost it'. Looks like I'll have to resend it tomorrow and wait even longer.

[sam1967]

I resent the SAR letter and the extra data they have sent me, confirms that they don't have copies of any letters. What should my next step be? I presume I should send a letter before action, but I need to make sure that I cover everything in it. Are there any useful templates?

[honeybee13]

I resent the SAR letter and the extra data they have sent me, confirms that they don't have copies of any letters. What should my next step be? I presume I should send a letter before action, but I need to make sure that I cover everything in it. Are there any useful templates?

 

Have you looked in the library, Sam? Top of this page in bluey green.

 

HB

[SabreSheep]

regarding the letters

 

they may not have copies but if you did a SAR you should have received a communications log that would mention if they were sent