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Schnide vs Egg

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I'll start my own thread rather than hijacking someone elses. After sending the following letter to the OFT:

http://www.consumeractiongroup.co.uk/forum/egg/39955-egg-its-wild-claims.html

 

..this is the reply I received:

 

"Dear Mr [schnide]

 

Thank you for your e-mail regarding the charges imposed on you by Egg. You state that Egg are misinterpreting the statement made by this Office about the level of charges which we would consider acceptable.

 

I should explain that the £12 threshold for intervention is not a price cap. We are not saying that default fees should be set at £12 or that a court will consider a default fee to be fair just because it is at or below £12. We expect and are calling on the market to apply the principles of fairness set out in our statement, which leave room for different levels and models of charging provided they are based on limited administrative costs, and to recalculate their own fees.

 

In line with its current enforcement policy, the OFT will investigate the fairness of any fee set above the threshold. In limited exceptional cases, a card issuer may be able to show that it is fair and consistent with the principles set out in our statement to charge higher default fees.

 

In relation to Egg's claim that we have approved a charge of £16, that is not exactly the case. What we have said in our statement of principles at para 1.6 is:

 

On the analysis we have undertaken we have concluded that generally credit card default fees have been set at a significantly higher level than is fair for the purposes of the UTCCRs. The level of a fair fee will, however, be dependant on the precise business circumstances. Some exceptional factors, for example whether a card issuer requires (not merely allows) customers to give it direct debit authority to ensure a minimum payment is made, may lead to a lower level of instances of default.

 

A card issuer operating a policy of this kind may be able to justify a higher level of default fee than one that does not because its relevant business costs are being recovered from a proportionately smaller number of defaults. However, even in the circumstances of this kind the card issuer may only recover the relevant limited administrative costs arising out of those defaults.

 

In other words there may be circumstances in which a charge in excess of £12 will be considered fair by a court if it can be shown to have been calculated in line with our principles and a true pre-estimate of the costs they have entailed in recovering losses.

 

In this context, we are grateful for the information that you have provided and we have logged it on our records in order to further our understanding of this market.

 

Yours sincerely.."

 

So how useful is this? I received my allocation questionnaire in the last few days as well, will I be able to use any of the above? I also have a few other questions about the questionnaire, which I'm hoping someone can help with.

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No replies to the above yet.. But okay, this is the defence that Egg have entered:

 

"1. [Claimant entered into agreement with Egg on..]

 

2. It is admitted that a charge was added to the Claimant's Egg account during the course of the Agreement. The charge was made pursuant to clause 7.1 of the Defendant's standard terms and conditions as a result of insufficient funds being available from the Claimant's designated current account to cover the amount of the direct debit payment due on the Egg Card in breach of the Terms and Conditions. Clause 7.1 clearly states "If you break the terms of this Agreement we may charge you the following, where relevant, to cover the additional cost to us: ..£20 if you do not keep up the payments of the Account.."

 

3. It is denied that the charges represent a "penalty" as alleged. The Defendant recognises that customers, such as the Claimant, exceed their Credit Limit or fail to make or are late in paying the required repayments and the Defendant therefore puts in place systems and processes to deal with the same. Such systems and processes include the use of computers, staff and other necessary overheads. The charges set out in clause 7 of the Terms and Conditions are calculated by taking into account the total costs incurred by the Defendant in maintaining those systems and processes and the estimated number of customers (such as the Claimant) who will fail to make or are late in paying the required repayments. The Defendant avers therefore that the amount of the charges applied under clause 7 represents a genuine pre-estimate of the loss and expense caused to the Defendant in respect of such customers exceeding their Credit Limit or failing to make or being late in paying the required repayments.

 

4. [section about putting a direct debit in place to make sure repayments are made]

 

5. Accordingly, it is denied that the charges are unenforcable at common law.

 

6. The Claimant is put to proof that his loss as a result of the charges is £21.60 as alleged.

 

7. In the event that the Court finds the default charges levied on the Claimant do constitute an penalty and are thus unenforcable, the Defendant asks the Court to assess the actual cost to the Defendant of dealing with the Claimant's breach of contract in failing to make his repayments."

 

Do they have a leg to stand on here? My case seems pretty straightforward, and I'd really appreciate some advice on how to fill out the Allocation Questionnaire in light of the above two posts.

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It seems to me to be the usual old tat,but hey im no expert.If you cant find any threads that deal with your querry,type in allocation questionaire in the search box at the top of the page.

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I'm aware of the general help offered to fill in allocation questionnaire's, but I was particularly hoping that the information in the first post from the OFT could be of use. Anyone?

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Schnide,

 

I had a similar challenge from Egg, all fairly standard defence.

 

They are, in essence, doing a lot of the work for you - para 3 is almost offering standard disclosure, this is the route which I have taken. Request, on the AQ that the judge orders Egg to divulge a thorough breakdown of costs. I went a stage further and requested that the judge order Egg to divulge the profit from overlimit charges over the last 6 years (if it is a genuine pre-estimate then the profit should be negligible).

 

Section 4 will be an important part of the defence and an attempt to justify the disproportionate charges by weasling around the OFT comments of issuers with direct debits may be able to charge slightly higher - countered with the comments from the OFT in response to Ema Clayton's threats in the offer letter.

 

Section 5 - well thats clearly not true. You also need to point out that this penalty charge area is also well covered by the UTTCR in respect to dispropotionate charges as Egg will claim that this extortion is offered as a service (for which you pay exorbitant fees) rather than a genuine penalty charge clause.

 

Section 7 sets out fall back positions if they get trounced - and is countered by a request for standard disclosure.

 

I was recently chatting to a friend of the family who is also a prominent barrister. In the conversation, I mentioned my fears of being out gunned and out manoeuvered by the legal big wigs, and she said that the judge will make sure that the lay individual will not be disadvantaged during the trial. Whilst it is unusual ground for you, I'm sure you'll be fine. You have the law on your side.

 

Let ma know if I can help further.

 

Regards,

Chris.

  • Confused 1

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Let's say that, as I predicted, a close friend has recently been offered full payment in return for dropping the case.. and a confidentiality clause.

 

My friend is very happy with all of the above except the confidentiality clause - I feel that my friend should be able to acknowledge his/her case on this forum to encourage others against this particular organisation.

 

How within their rights are Egg to request this clause - would it be worth my friend pushing harder, in whatever capacity?

 

I of course expect a similar letter to arrive to my home in the coming days, if of course it hasn't done so already.

 

Victory against the Egg!

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hi schnide i am also excpecting this and a confy clause too here is what i would do i will not except it but if they want to pay say £500 for me to accept it then i will of course do that i am easily pleased but it is entirely up to you.

if the founders of this bank charges thing all accepted the confidentiality clauses set out by the banks we all would not be claiming our money back now.


SETTLED CASES

LTSB (CC) £20 21-8-06

HSBC (CC) £600 19-10-06

HSBC (Ac) No.1 £1900 25-10-06

RBS (CC) £900 25-10-06

Smile (Ac) £1300 17-11-06

A&L (Ac) No.1 £400 23-11-06

A&L (Mortgage ERC) £3900 4-12-06

LTSB (Ac) £200 13-12-06

A&L (Ac) No.2 £120 19-12-06

HSBC (Ac) No.2 £650 29-12-06

LTSB (Business) £1700 13-2-07

RBS (Ac) £4500 + Default Removal 17-3-07

Barclays (Bus) Warrant of Execution 10-3-07 not used yet

ONGOING CASES

Egg (CC) N1 Filed £1300 + Default Removal Judgment Order 9/1/07 In my Favour

Barclays Business loan & 2 accs. S.A.R N1 filed Judgment in Default isued 15/2/07

HSBC (CC) have failed to produce Credit Agreement

TO DO CASES

Egg (Loan)

LTSB (Ac Ltd Company)

LTSB (Loan)

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schnide-

 

Do NOT accept the Confidentiality Clause!

 

Any District Judge would take an extremely 'dim view' of the Defendants attempt of imposing Unfair Terms upon the Claimant, in what is a simple monetary Claim.

 

Love AC

  • Haha 1

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schnide-

 

Do NOT accept the Confidentiality Clause!

 

Any District Judge would take an extremely 'dim view' of the Defendants attempt of imposing Unfair Terms upon the Claimant, in what is a simple monetary Claim.

 

Love AC

 

Thanks for the advice - so what would my friend do, reject the offer? Is it likely they'll offer the amount again without the clause?

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yes i have done this on a couple of times with differant banks writing back and saying you will accept the offer but without the conditions, remember you are in controll here not them, i know it seems strange but that is the case.

best of luck CB

  • Confused 1

SETTLED CASES

LTSB (CC) £20 21-8-06

HSBC (CC) £600 19-10-06

HSBC (Ac) No.1 £1900 25-10-06

RBS (CC) £900 25-10-06

Smile (Ac) £1300 17-11-06

A&L (Ac) No.1 £400 23-11-06

A&L (Mortgage ERC) £3900 4-12-06

LTSB (Ac) £200 13-12-06

A&L (Ac) No.2 £120 19-12-06

HSBC (Ac) No.2 £650 29-12-06

LTSB (Business) £1700 13-2-07

RBS (Ac) £4500 + Default Removal 17-3-07

Barclays (Bus) Warrant of Execution 10-3-07 not used yet

ONGOING CASES

Egg (CC) N1 Filed £1300 + Default Removal Judgment Order 9/1/07 In my Favour

Barclays Business loan & 2 accs. S.A.R N1 filed Judgment in Default isued 15/2/07

HSBC (CC) have failed to produce Credit Agreement

TO DO CASES

Egg (Loan)

LTSB (Ac Ltd Company)

LTSB (Loan)

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My friend's case is almost at a close - I suggested to them that they allow the 14 day deadline of the payment and confidentiality clause expire, and then write to Egg after this date to say they are willing to accept payment without the clause.

 

I assume it was safe for them to do this, rather than reject the offer within the 14 day period?

 

Regardless of the outcome, I have already made a donation to this site, and long may it continue.

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I suggest such passive silence for 14 days would put your friend at a psychological disadvantage. Egg could come back and paint a picture suggesting insouciance, stalling tactics and unhelpfulness on the part of the cardholder.

 

I would write a polite and most correct letter to Egg, saying that whereas you have heard that the district judge would be furious about the confidentiality clause, you are not well versed on the law. Would Egg have any objections if before signing or not signing this agreement, that you take it to a national newspaper financial journalist for consultation and advice. Whether he has heard Egg as a matter of policy conducts cover-ups. If Egg were now to repudiate and withdraw aforesaid offer, does Egg wish to show contempt for public opinion, as well as for the law of England?


 

 

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Well needless to say, my friend referred to earlier was me. The reason I let the 14 day period expire wasn't because on purpose but because I forgot about it over Christmas :)

 

Nevertheless, I wrote to Egg shortly after saying that I could not accept their unfair terms of confidentiality, but that I would be happy to accept the full amount by itself for £52.02 to settle the case.

 

Last week, I received the separate cheque and letter and the case has been filed for dismissal.

 

So..

 

It could have cost you £20 Egg but you had to fight it didn't you? Then I took you to court and your threats didn't frighten me off. A sincere thank you to everyone on this forum, donation already made.

 

I have WON! I have BEATEN you Egg, just like I said I would!

 

*** VICTORY FOR SCHNIDE! ***

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Cheers for Schnide at the end of a long and winding road. Schnide joins the roll of honour in VE Day thread.

 

It lifts the spirit to witness a principle vindicated,

and justice restored in this green and pleasant land.


 

 

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well done fantastic news schnide,

all the best CB.


SETTLED CASES

LTSB (CC) £20 21-8-06

HSBC (CC) £600 19-10-06

HSBC (Ac) No.1 £1900 25-10-06

RBS (CC) £900 25-10-06

Smile (Ac) £1300 17-11-06

A&L (Ac) No.1 £400 23-11-06

A&L (Mortgage ERC) £3900 4-12-06

LTSB (Ac) £200 13-12-06

A&L (Ac) No.2 £120 19-12-06

HSBC (Ac) No.2 £650 29-12-06

LTSB (Business) £1700 13-2-07

RBS (Ac) £4500 + Default Removal 17-3-07

Barclays (Bus) Warrant of Execution 10-3-07 not used yet

ONGOING CASES

Egg (CC) N1 Filed £1300 + Default Removal Judgment Order 9/1/07 In my Favour

Barclays Business loan & 2 accs. S.A.R N1 filed Judgment in Default isued 15/2/07

HSBC (CC) have failed to produce Credit Agreement

TO DO CASES

Egg (Loan)

LTSB (Ac Ltd Company)

LTSB (Loan)

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yeah,really good news, Schnide, WELL DONE!!


Woolwich won in court/default removed Barclaycard Settled Halifax settled

Capital 1Settled GE Money Settled

Egg Settled-court action re.default 4th hearing!

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I can honestly say I couldn't have done it without this forum, so thank you again to all those who offered very useful advice and also to those such as yourself Yasmin who opened the floodgates and inspired others.

 

This is exactly the kind of grass roots action that I very much hope will only become more common. If consumers realised that the power lies with themselves in where they take their money, this country could change over night.

 

Tell your friends to close their bank accounts and move to an ethical provider (I recommend the Co-Operative, who refunded my charges instantly).

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Well said and WELL DONE!!!


FIRST DIRECT: £4751.86 SETTLED IN FULL 5/07/06 :-)

 

TESCO VISA CARD: £90 SETTLED IN FULL 12/08/06 :)

 

LLOYDS TSB: £4403.59 SETTLED IN FULL 17/08/06 :)

EGG: £451.52 SETTLED IN FULL 18/01/07 :)

 

 

Opinions and advice of kazzaw are independent, offered informally, without prejudice, without liability, and not endorsed by the Bank Action Group. If in any doubt, seek the advice of a qualified, insured professional.

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