Excel Contractual Interest Spreadsheet

[Mindzai]

As there seems to be some issue with signatures I'm posting this thread as a place to point to this spreadsheet:

 

Download v1.9

 

It works with most versions of Excel for calculating statutory and contractual (compounded) interest and printing a scedule of charges.

 

Any questions feel free to ask.

[Guest ian cognito]

Do we have a release date for CC one yet? ;-)

 

What a cheek - excellent spreadsheet well done!!

[JonCris]

Min when attempting to download getting the message user has exceeded their bandwith wotsit..................?

[Mindzai]

Hi JonCris - thanks for that. I've hosted the file on my ISP web space now I have broadband back so hopefully this will be more stable.

 

janquinny - I will attempt to find out the differences involved (if any) in credit cards. I'm not sure the way charging etc works for them at the moment but I will find out and upload a credit card version.

[Guest ian cognito]

Cheers for that, I've had a look and a think and can't see what the difference could be as it makes no difference if your balance is always in debit I don't think? Brain not what it used to be, maybe after the season of godwill!

[e28bigalbexley]

im sure i read somewhere it due to the way/stage they apply the interest to the penaties

[bill-k]

I've been helping out with some of Vamp's spreadies, and learning as I go. From what I can make out so far, the penalty charges, and the statutory or contractual interest on them are calculated the same way for CA's & CC's.

 

It seems that the difference is in the calculation of the interest charged by the bank on the penalty charges. A CC charges interest on debited items after one month has elapsed, I believe, and continues to do so until the monthly balance owing drops below the cumulative total of penalties charged to date (or to zero). At this time, the penalties are then partially (or fully) paid off, and the clalculation is re-set from then.

 

A CA only charges interest on these penalties if the account is overdrawn, or being charged interest for any other reason. However, there is no 30-day interest-free period, so interest is applied instantaneously to each penalty. The rate applied may vary, though, if the account slips from an authorised to an unauthorised O/D state, or is taken back into credit (ie. non O/D). If, however, the account returns to an O/D state after being in credit, then these penalties are once again being charged interest on (whereas a CC account balance will not still include these if it was cleared, and then started to become debited again).

 

I'm afraid my understanding of this is still sketchy, and my ability to explain it is even worse, but hopefully if I chuck it into the mix, Mindzai might be able to use it !!

[e28bigalbexley]

Although I had to read it four times:o (not i think due to the way you wrote it, i was refering to my over indulgence last night), I think that was an excellent response Bill. Although i have not used the new ss's yet im sure with some trial and error and you guys i'll get by im determined to bash B/C with my contractual mallet.

[Guest ian cognito]

Thanks Bill, really glad I didn't have a drink last night now.

 

2 observations from me:

 

This spreadsheet doesn't allow for a variable interst rate, to do this you would have to enter the given interest rate at any particular date? am I right?, also I assume the unauthorised borrowing rate would only be applied to that portion of the outstanding balance over the authorised amount, which means you would need 2 calculations for any date with an unauthorised balance to be absolutely accurate?

 

The only difference to calculating a CC interest rate would be to add 1 month to the start date of the interest charged on the penalties, the penalties would have to reduce pro rata to balance/payments for this to be accurate?

 

The above would only be relevant if you were claiming interest on the charges only as opposed to charging them for the whole period they had 'borrowed' your money, in which case the calculation would just be their % rate on the whole of the penalties for the whole of the period?

 

OK thats probably more like 6 points but obviously maths isn't my strong point!!!

[JonCris]

Hi bill not entirely sure what your saying (thick) but I would point out that the compound contractual rate CAN continue to be charged after settlement or even if the account is closed.

 

The basis for this is reciprocity.Your charging them the same rate of interest for their unlawful, therefore unauthorised borrowing of your money in the form of penalty charges & interest

[FairlyNiceChap]

My understanding is that this is quite simple.

 

Bank charges are unlawful and therefore unauthorised whether resulting in an overdraft, whether the account is in credit, whether you have paid off the charge or for any other reason.

 

Record anything the bank has taken from you unlawfully (including any interest at whatever percentage rate so long as it relates to unlawful charges), ignore all other transactions (normal debits credits, interest on normal balances) only reduce from this tally refunds of unlawful bank charges and refunds of unlawful interest.

 

From the time that the bank takes anything unlawfully it is chargeable at the contractual rate for unauthorised borrowing due to a) you did not authorise them to take what is lawfully yours b) reciprocity (thats the deal)

 

Simple example with 33% unauthorised borrowing rate

 

You have £30 in your bank and a dd for £101 is rejected due to insufficient funds

So due to a failed dd they charge you £30 on day one so you now have £0, you have no overdraft facility, you pay no interest, you receive no interest

 

You however can charge them 33% on the entire amount they have taken unlawfully = £30

 

Now suppose you deposit £1Million in your account and never pay a bank charge again - indeed you even get some interest (much more than your charges)

 

I repeat - You can still charge them 33% on the entire amount they have taken unlawfully = £30 Even if you never had an overdraft!!!

 

This being the case I am even contemplating slowing down one of my claims

because I cant get 33% anywhere else - loving it!!!

[Mindzai]

My understanding is that this is quite simple.

 

Bank charges are unlawful and therefore unauthorised whether resulting in an overdraft, whether the account is in credit, whether you have paid off the charge or for any other reason.

 

...

 

That's correct but it's not really the issue at hand - the existing spreadsheet does this, but there is a difference between this and credit card accounts.

 

Bill - that certainly seems to make sense. I'll have a think about that and see if I can come up with something. My understanding of CC charges is also pretty sketchy so I'm reluctant to upload anything untill I'm sure it's correct. The previous spreadsheet was checked by someone much better at maths than me, so I'll do the same with the CC one and then upload it if it gets the all clear.

[bill-k]

OK - HOLD IT - HOLD IT - HOLD IT!!

 

I think we're still getting confused over the two DIFFERENT types of interest, here. My inability to explain myself doesn't help, I have to admit. So please bear with me - one more time for luck !!!

 

BigAl first of all - a hair of the dog might actually have been a better way to tackle this !! Well done for attitude in the face of my appalling command of grammar !! Yes, mate, persevere with the old "suck it and see" and trial & error. Just keep that bottle of Glenfeckit out of reach until you're done.

 

Jan (loved your Saddam T-shirt BTW !!!) I believe you have grasped something that even JonCris might not have (although had I managed to speak in plain English, he may well have). Yes , indeedy, there are two DIFFERENT types of interest, here. The first is the interest which we were actually charged by the bank on each and every penalty charge deducted. So, yes, that £20 overlimit fee attracted xx% interest each month. And yes, it was charged at various rates throughout our history with them. But the amount actually charged was a PRO-RATA proportion of the interest charged each month as a whole. The spready works this out for each month (if you enter in the figures !!), and automatically takes into account the different interest rates applied, as it actually works out the interest on each penalty from the actual amount the bank charged each month (at whatever rate that was). By way of an example, if I may:-

 

Let's say you're O/D by £100 and paying 15% authorised rate. Now let's say the bank charges £20 for a bounced DD. So you are now O/D by £120. So the bank charges you their interest for your £120 O/D at the end of the month (or whenever your statement is due). Well, out of that interest charge, one sixth (the £20 penalty) is reclaimable, isn't it ? So, regardless of what the bl**dy interest %rate was, you have been charged one sixth of that month's interest unlawfully (by implication or association, or as an accessory after the fact !!). So, if the bank ACTUALLY charged you (eg) £6.00 that month, then you can claim back £1.00 of that. Capice ?? The same applies to the following month - etc., etc., etc. So let it be said - so let it be written.

 

Sounds complex, but the spready actually does all that for you. YOU just have to punch in, the cumulative charges each month, the balance each month, and the total interest charged each month. The spready works out from that how much of that interest was unlawfully charged on penalty charges. You don't need to concern yourself with the interest rate - just the interest amount !!

 

OK - so we now have a list of penalty charges which we're claiming back. Easy-peasy. And we now also have a list of the different amounts of interest charged on these throughout the period. We're claiming this back, too. In my own experience, though - this interest hasn't amounted to much, so I haven't bothered claiming it. But so far, this is ALL stuff which has been previously charged to us by the bank, and is detailed on our statements.

 

Next step - Statutory or Contractual interest. Whichever you choose to claim, THIS is added on to what we have so far calculated above !! It is NOT a part of that calculation so far !!!

 

OK - seein' as I ain't much cop as a lecturer, let's take a break....

[bill-k]

.....Yeah, Milk & 2 sugars please.

 

Rich Tea, anybody ?

 

...............

[Mindzai]

Yes makes sense bill, so I assume the only difference then is that all interest calculations on amount incurred due to unlawful charges are made one month in arrears?

 

As I dont have a credit card though, I'm not sure if the one month interest-free 'grace period' relates to each and every charge individually, ie if you get charged £30 (unlawfully) on 15th December, do you not pay any interest until 15th January? Or is it done on a basis whereby you have until the end of the month (or whenever) at which point any charges incurred in that month start accruing interest? I'm guessing the former is more likely, but just to be sure...

[bill-k]

So, we have The charges themselves all totted up. And we have the interest which we were charged on those charges all totted up. And now we have a spreadsheet with a load of money that the bank has taken from us a while ago. So we're going to claim that back, as they have effectively "borrowed" it from us without our authority (with no authority whatsoever, as it turns out !!) We could call this "nicked" perhaps, but let's be civilized and call it unauthorised borrowing. Now that rings a bell !!

 

So, we NOW charge them for having had this money from us all this time, by applying interest to this money at the rate specified in our contract with them. THIS - at last - is the contractual interest we have been wittering on about. So now we add interest to each and every penalty charge, AND each and every bit of interest that was charged on that charge. AND we ad it at the current rate, NOT at any older rate - WE are charging them NOW - at the rate they are currently applying.

 

So - now we have:

1. The original penalty charges;

2. The interest we have been charged on those penalty charges;

3. The interest that we are NOW charging the bank for taking those penalty charges from us:

4. The interest that we are NOW charging the bank for taking interest on those penalty charges from us.

 

And that is the sum total of our claims.

 

Jan - hopefully that made sense.

 

JonCris - please read the above. If it still doesn't gel, then I truly am sorry because I KNOW you guys ain't thick, and it is all down to my inability to express myself clearly and concisely. I can only say.....chew your food slowly to avoid indigestion.

 

FairlyNiceChap - I hope it worked for you !!

 

Mindzai - I reckon you're several steps ahead already, with this !!

 

God -I love this place. You can talk down, across and up to people of all sorts, and come away with all sorts of riches if you respect each others' good & bad points, and their motives for being here !!

 

Hope that has helped.

 

If not, then I hope I've given you a bloody headache !!!

 

Message ends.

 

Bill.

 

er...xxx.

[Guest ian cognito]

Yes, cheers for that chaps, with you now.

 

Personally (and this is just ME, not a reflection on what anybody else thinks or does) I am only interested in charging them back the interest they charged me on their charges so with the 1 month interest free period, I'm happy (see an easily pleased woman here!)

[FairlyNiceChap]

So, we NOW charge them for having had this money from us all this time, by applying interest to this money at the rate specified in our contract with them. THIS - at last - is the contractual interest we have been wittering on about. So now we add interest to each and every penalty charge, AND each and every bit of interest that was charged on that charge. AND we ad it at the current rate, NOT at any older rate - WE are charging them NOW - at the rate they are currently applying.

 

Message ends.

 

Bill.

 

er...xxx.

 

Bill - Very nearly I think

 

I hate to say this but to be correct I think we need to do distinguish between what we might get away with and what is correct.

 

Typically contractual rates of interest can vary over time however , So, while many companies fix a contractual rate of interest say 29% for unauthorised borrowing ,some do not eg my mortage lender fixes my contractual rate of interest vs a varying base rate

 

BUT (and this is why contractual rates of interst are such a strong card to play ) if you were to (perhaps incorrectly ) fix on a rate at the current unauthorised borrowing rate, and it ever gets to court, they will wish to debate principal before they debate quanta - in otherwords ...

 

They could I suppose get to the position of saying in defence "without prejudice to our case that we owe nothing at all, if (hypothetically) the court decides we do owe anything at all then we don't owe X we actually owe Y " - but wouldn't you love to read this defence

 

The day banks start defending on details of schedules is the day they have conceded the case in law.

 

Do you see fob off letters saying "We will settle as a goodwill gesture/ admit nothing but , while we admit nothing, we cannot accept your calculation of how big a nothing we should be admitting " - its too lame and they know it. So they don't send them

 

FNC

[bill-k]

Bill - Very nearly I think

 

I hate to say this but to be correct I think we need to do distinguish between what we might get away with and what is correct.

 

Thanks, FNC. I was merely concerned with getting the maths right first, but as you suggest, what follows is another battle altogether !! If the maths is wrong to start with, though, then one is wrong-footed already with regard to any subsequent skirmishes.

 

I know that contractual rates of interest change over time, but the rate we are charging THEM is the rate currently in force under the contract to which they are a party. I take the stance that, when the court awards statutory interest, it does not determine what the various rates of stat. int. were over the years - it awards it at the current rate - on ALL of the claim. That being so, then the principle must surely apply to our claim for contractual, at the current contractual rate.

 

With regard to the bank actually paying us the compliment of arguing about the rate of interest, then they must first, surely, successfully argue against the principle of reciprocity and mutuality. In the event that they might successfully do so, I always recommend claiming a lower contractual rate, and then the statutory rate, both in the alternative. This, to me, gives us the chance of claiming the maximum rate (which we otherwise may have denied ourselves, through fear of losing everything) - but allows two fallback positions, both of which are simply put forward as simple choices for the Judge to make. This, to me, makes their job simpler by not forcing a debate about percentages, etc. All credit to Mindzai & Lucid for that, BTW, as I indeed took them to task over it a while back !!

 

But, yes, the bottom line for me is that I have yet to have this tested in court. However, I do believe that one of the reasons why it does not get taken that far may well be that the bank can see at the outset that I have at least got some idea what I am talking about, and am therefore not going to be a pushover for them. Which is why - again - I consider it very important to be sure that we know our figures are right, and that we know how we got them. They are banks - and will pick up on any errors here, well before they get their solicitors looking at a defence, methinks !!

 

First things first - JMHO, of course.

 

Bill.

[bill-k]

Yes, cheers for that chaps, with you now.

 

...'eck as like, Jan !!!

[FairlyNiceChap]

Bill - I agree with you on all points, and certainly in terms of being sure we understand the basis of our position and can sustain it (i also think the precautionary reduction of the contractural rate is a good idea)

 

However , please can you clarify re the following

I know that contractual rates of interest change over time, but the rate we are charging THEM is the rate currently in force under the contract to which they are a party. I take the stance that, when the court awards statutory interest, it does not determine what the various rates of stat. int. were over the years - it awards it at the current rate - on ALL of the claim. That being so, then the principle must surely apply to our claim for contractual, at the current contractual rate.

 

Are you saying that the current rate must relate retrospectively to the breached contract as the defacto means of calculation for any currently made calculations (i like it especially during rising interest rates)

 

I can see a sort of argument for this as follows:

 

At the time a historical charge was made, the then current contractual rate would perhaps have been different (higher or lower) but now that that we (making the calculation under todays conditions with todays market knowledge) cannot determine what todays known rate would have been as an equivalent under historical prevalent market conditions (and given todays knowledge) and so we must conservatively assume no change. It would only be safe to apply the historic rate if we could prove that changes in the rate arose as a result of changing market conditions rather than being different perhaps as a RESULT OF DIFFERING BANK POLICIES or attitudes to knowledge inflation etc and hence implicit contractual terms.

 

FNC

 

As will be apparent I am not a lawyer, but I love a good argument!

 

Am probably disappearing up my own proverbial but ... never been there before so why not give it a try

 

 

[e28bigalbexley]

Would the bank not charge its current rate (normal or higher), ingnoring the fact that some of your penalties may have been incurred at a lower rate, and the more recent incurring a higher rate (or vise versa), as they do on a credit card when the rate goes up, or down it applies to the whole sum + their higher (cash rate % on penalties) would the bank really seperate out the individual rises and falls of interest rates, i know their good with figures but the computing power would be massive would'nt it

 

AL;)

[bill-k]

Am probably disappearing up my own proverbial but ... never been there before so why not give it a try

Never been there myself, and no intention of, either !!!

 

I think I get what you're saying FNC, and I guess you're playing Devil's advocate here. I agree that we may well find that a defence gets put forward along the lines that you detail. The interest we are charging them is on a range of penalties over a period of time, but I don't believe that, as Personal Litigants, we should be expected to work out every individual charge and rate. We are making what I consider to be a fair and reasonable claim, and the bank indeed has a right to refute it in part or in full.

 

If the bank wishes to do so, then let them, and perhaps we - or the court - shall accept their figures. But I still believe that, unless the court sees fit to apply the statutory rate of interest to these charges at various rates over the years, then the court cannot accept the banks' argument. I also believe that claiming the alternatives puts a simple 3 choices before the court, and haggling over any one of those would not be something the Judge will like to see, methinks.

 

Had they been honest and decent and refunded the penalties earlier with interest, then they could have done so at whatever rate was current at the time. They did not, IMO, so they forfeited this option, I believe.

 

And, yes, it does seem to work to our advantage at present doesn't it ? If the reverse were true, however, then I guess this would be a totally different argument - but then again, so would the bank's !!!

[bill-k]

...i know their good with figures but the computing power would be massive would'nt it

 

AL;)

Yeah - agreed, AL. It would be difficult enough for them to do, without us being expected to. Let them do it if they so wish, but I reckon they wouldn't consider it worth the effort just to save a few quid. After all, that is all it would achieve - it wouldn't get the claim thrown out, nor the interest. Just an adjustment. Let them bl**dy work for it, for once !!!

[FairlyNiceChap]

Bill - Agreement found

 

If it ever gets there (which I doubt), I see your strategy as pick abc is strong especially if a is statutory (we could win no less), b) is contractual rate c) is a just in case very slightly reduced percentage still well above a) and compound but just below b)

 

At this point in the discussion, the judge has ruled on the unlawful elements, they have lost their negotiation chips wholly and have wrongly taken from clients (and then contested that they were right to) and charged interest (probably) and caused hardship/ distress etc

 

I imagine most judges would be pretty p***ed off with the banks playing silly b******s and woukld relish giving them a slap