Son of Steven4064 vs GE Money **WON**

[sarah13]

Alternatively you could wait a couple of days and then ring Sarah Wainwright to ask if she has received it via the customer services general number 0870 124 2446 or the Trent House switchboard 0113 280 7080

 

Steven

 

when banks are asked if they have received something sent normally by post it gives them the option of saying no and so would delay the claim further. From my own experience with the institutions i have pursued - all of them like to delay as much as possible so to avoid this i would send the letter again recorded.

 

Steven- i have never been lucky enough to speak with Sarah Wainwright, i didn't think she actually existed until now!

[DELACEY]

Thanks both, what I will do, is wait four days then ring the elusive Sarah Wainwright to see if she has received the SAR, and I will let you know if I am succesful. But yes, Sarah, I see where you are coming from, however, like I say I will wait four days first before re-sending recorded delivery, you never know, they just might admit they have received them?

[steven4064]

In another neck of the woods, about 4 mojnths ago, we sent an SAR recorded delivery to HSBC who responded within a couple of days with all the statements, and the Post Office STILL don't admit to delivering it!

 

My experience is that they respond to SARs OK. I think recorded delivery is more important when it comes to prliminary letters and LBAs

 

IMHO

 

Steven

[Parkvale]

steven, If you can get the post office to admit to anything that would be a wonder.

[steven4064]

What I meant was that it doesn't show up on "track and trace" and I can't get proof of delivery - £1.10 well spent, then!

[bailey54]

Seems this Royal Mail service does'nt work very well! I have 5 items sent this way which have not been signed for , therefore Royal Mail can't prove they have been delivered!

 

Don't forget there is a £34.00 compensation for non-delivered items payable by Royal Mail included in this service - easy to claim the form is on their website!

 

Have claimed on all of my 'no signature' items and they have paid. If more of us claimed the compensation R. M. might buck their idea's up!

[steven4064]

What do you do when the mail wasn't signed for and doesn't appear on 'track and trace' yet was delivered because the bank sent the statements requested?

 

Out of 8 'signed for' letters sent, the PO have 'lost' 3.

 

Steven

[bailey54]

To be honest as RM haven't bothered to get the signature that I have paid them to get I have pushed my luck and claimed anyway. They have no proof that they have delivered.

 

Once they cheekily asked me to contact the recipient and ask if it had been delivered! I told them that is what they are paid for and not my place to check up!

[steven4064]

I've just spoken to Salan's - they have decided to lodge a defence. So not quite there yet

 

Steven

[tanglewood]

Hi everyone. I am new so please help. My son has an account with Burtons and they have charged for not setting up a direct debit etc. He owed about £50 but with the charges it is now £258. Not a lot but he hasn't got it. Can he make a claim like the bank charges. I read about an SAR letter. Where will I find one?

[Parkvale]

Tanglewood, You need to start your own thread then it is easier to follow you and answer questions. http://www.consumeractiongroup.co.uk/forum/bank-templates-library/516-1-data-protection-act.html

http://www.consumeractiongroup.co.uk/forum/site-questions-suggestions/53182-cant-find-what-youre.html#post436526

Good luck.

[steven4064]

Quick update and request for advice.

 

Just under 2 weeks ago, Salans (GE Money's solicotors) indicated that they intended to defend. If you remember we agreed to an extra 28 days after the original claim for them to get their act together. The extra 28 days expired 10 days ago and there is no sign of a defence. So I can request judgement.

 

However, there is the danger that Salans would then request judgement to be overturned and continue trying to put off the inevitable. So.....

 

Could I write to the court, not requesting judgement but respectfully suggesting that, in light of Salans not lodging a defence within the agreed extended deadline, the court issues the direction in the revised AQ strategy (http://www.consumeractiongroup.co.uk/forum/bank-templates-library/11644-allocation-questionnaires-guide-completion.html) for me to provide a schedule and other documentation within 14 days or lose by default and for them to provide details of their costs within 14 days or lose by default. By doing this we should be able to preclude Salans from any more messing about.

 

What does anyone think?

 

Steven

[steven4064]

I spoke to the court this morning and Salans submitted a defence right on the last day (18 April) but still in their backlog. The court will send AQ this week they say. I asked whether they are dispensing with AQs but the clerk didn't know but thought not.

 

Steven

[steven4064]

AQ and defence now received. Defence is brief and consists of 5 points:

 

1) Yeh, we had an account

2) Yeh, they put charges on it

3) They paid us the charges back

4) Nevertheless, the charges were fair

5) So push off, you are not getting any more money

 

I am now preparing my Statement of Evidence - see next post:

 

Steven

 

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[steven4064]

STATEMENT OF EVIDENCE

 

 

- The Claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges arising out of and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

 

- It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendant’s charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

- It is admitted that the Defendant had repaid £372.00, being the sum of charges made to the account but has not repaid interest of £168.05 added to the charges once applied.

 

- The Defendant contends that the charges levied are genuine pre-estimates of the cost to the Defendant of dealing with the Claimant’s defaults and are reasonable.

- The breaches of contract in this case relate to late (monthly) payments to the account. For example, a payment of £9.32 was due on 11 January 2003 but unpaid until 3 February. I was then penalised for this breach by way of a charge of £15.00 on 29 January 2003. Subsequently, charges were increased to £18. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.

 

- In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915], Lord Dunedin stated that a clause is a penalty if it provides for “a payment of money stipulated as in-terrorum of the offending party”, i.e. if it is designed to scare or coerce or is used as a threat.

 

- The Credit Card Agreement (copy attached), which covers this account, states in relation to these charges:

KEY INFORMATION

We may make the following charges for administering your Account:

·£12 if the minimum monthly payment does not reach us on or before the payment due date;

·£12 each time a cheque, Direct Debit or other payment request is not paid when first presented to, or is recalled by, the relevant financial institution;

·£12 each time that you exceed the Credit Limit or Cash Limit;

·£25 if you do not inform us of a change of your details in accordance with Condition 8 and we have to trace you.

You must pay the amount of any other losses and reasonable costs which we incur as a result of your breach of this Agreement. These may include, but not be limited to costs associated with notifying you of the breach, communicating with you about the breach and enforcing payment of any amount due under the Agreement.

- The Claimant contends that this Key Information forms an integral part of the credit agreement and constitutes a term requiring that, in the proper running of the Account:

a)Payment must be received by the due date. This includes the requirement that funds must be maintained in other accounts kept by the customer at other financial institutions so that payments requested from that account by GE Money are honoured at the first presentation (ie on the due date);

b)Credit and Cash limits must not be exceeded

OR the result will be a charge.

- Further, the Claimant contends that, although these charges are referred to as “charges for administering your account”, the Key Information is a clear statement that a charge will be imposed if the customer breaks either requirement that payments to be received on time or that credit and cash limits are not exceeded. The term itself sets out that the charge arises purely on the occurrence of the event and, as such, is a penalty or default charge rather than an adminstrative fee.

- The sentence “You must pay the amount of any other losses and reasonable costs which we incur as a result of your breach of this Agreement” is ambiguous in that it is not clear from the context whether “other losses” refers to other losses by the Credit company resulting from these same breaches or losses from other breaches. In the first case (losses are caused by the same breach), the sentence confirms the fact that the charges listed are in the event of “breach of this Agreement” and are thus penalties. Even in the second case (losses are caused by a different breach), the Claimant contends that there is a very strong argument that these charges constitute “disguised penalties” – the OFT report “Calculating fair default charges in credit card contracts - A statement of the OFT's position”, April 2006, says,

“4.21 Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for 'agreeing to' or 'allowing' a customer to exceed his credit limit is no different from a charge for the customer's 'default' in exceeding his credit limit.) The UTCCRs are concerned with the intention and effects of terms, not just their mechanism. “

 

- As pleaded above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties. The Claimant refutes the Defences contention that they are genuine pre-estimates of the cost to the Defendant of dealing with the Claimant’s defaults and are reasonable.

 

- However, and without prejudice to the above, in the event that the charges were accepted as being a fee for a service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.

 

- Further, under the UTCCR:

 

5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was.

 

 

Schedule 2 also includes such clauses (to define examples of unfair clauses) as:

 

(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

 

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract.

 

- The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract.

- The Claimant also refers to the the OFT report “Calculating fair default charges in credit card contracts - A statement of the OFT's position”, April 2006, in this context:

 

“3.23 We consider that in a consumer contract, where the parties are not of equal bargaining power, any estimate that included costs which could not legitimately be claimed as damages from an individual consumer in a case brought at common law, and which made a material difference to the overall charge, is likely to constitute a penalty in law “

- Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as an administrative charge. It is not disputed that the Defendant is entitled to recover its damages following the claimant’s breach of contract, and it is entitled to include a liquidated damages clause. A penalty however, is unenforceable.

 

- The law states that a contractual party cannot profit from a breach and the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred. This means that Liquidated damages should be charged. This is backed up by case law – Robinson Vs Harman 1848.

- It is settled law that the charge for loss or damage arising from a breach of contract must be proportionate to the loss incurred.

 

 

- Lord Dunedin stated in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co 1915 –

“the sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach”

 

- Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as:

 

(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;

 

- In order to ascertain whether the Defendant’s charges are an unenforceable penalty or are liquidated damages, the true costs incurred by the Defendant need to be thoroughly examined to establish whether or not the charge truly represents a genuine pre-estimate of its likely loss incurred by my contractual breaches.

 

- On numerous occasions, the Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of my contractual breaches. Each time those requests were rebutted or ignored.

 

- The Claimant refers to the report “Calculating fair default charges in credit card contracts - A statement of the OFT's position”, April 2006, by the OFT who conducted a thorough investigation into default charges levied by the British financial industry:

“1.13 We will in general be careful to ensure that the concerns we have raised are effectively addressed. We cannot be tolerant of strategies which seek to avoid the substance of these concerns, for example by merely changing nomenclature or re-characterising the charges. We deal with this again below.”

“5.3 As a practical measure, to help encourage a swift change in market practice, we are setting a simple monetary threshold for intervention by us on default charges. The threshold is £12.

“5.4 Our presumption will be that credit card default charges set above this level are unfair unless there are exceptional factors that legally justify the higher charge. Where we see a fee above the threshold, we are likely to challenge the charge but will have regard to all the business circumstances and any exceptional factors in deciding whether to do so or not. We will regard charges set below the threshold as either not unfair, or insufficiently detrimental to the economic interests of consumers in all the circumstances to warrant regulatory intervention at this time

“5.5 We regard the setting of the threshold as a provisional practical measure to move the market towards compliance. We should make it quite clear that we are not inviting the banks to align their charges at such a threshold figure. We are not proposing that default fees should be equivalent to the threshold, and a court will certainly not consider that a default fee is fair just because it is below the threshold. ... This approach leaves scope for different models of charging, provided they are cost-related.

“5.12 We expect all credit card issuers to take on board the principles contained in this statement and to recalculate their default charges accordingly. Credit card issuers are being asked to confirm by 31 May [2006] their response to this statement and their willingness to make any necessary adjustments to their credit card default charges. We are mindful that changes to a default charge may require IT system and other business changes by the credit card issuers. Some of these changes may take some time to fully implement, for example updating documentation for consumers. Nevertheless, in view of the scale of consumer detriment involved in the imposition of unlawful default charges, we consider that steps to reduce charges should be taken as a matter of exceptional priority even if this means that consequential changes occur at a later date …”

- On 22nd May 2006, the house of commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house discribed such default charges as "exorbitant" and "excessive".

 

 

- The Claimant refers to recent work where estimates of actual costs to banks through customer breaches of contract have been assessed. Whilst not directly comparable in that the charges assessed relate to bank current accounts, the Claimant contends that the IT systems used are sufficiently comparable to make a comparison reasonable:

- In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. The study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.

 

- Further, in an American study (Consumer Federation of America “Bounced Cheques: Billion Dollar profits II”) it was estimated that the American banks’ cost to process a returned direct debit payment was between US$0.48 and US$0.65.

 

- The Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.

 

- For their recent BBC2 documentary “The Money Programme” (broadcast 12 December 2006) , the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.

 

 

 

- It is submitted that the Defendants charges are applied by an automated and computer driven process. No letter is sent and no other communication from the Defendant received, the computer system merely adds the charge to the next statement. It is therefore impossible to envisage how the Defendant can incur costs of £15 or £18 by carrying out this completely automated process.

 

- Additionally, I asked the Defendant to provide evidence of any manual intervention that may have occurred in relation to my account, under a Data Protection Act 1998 right of subject access request. In the Defendant’s reply dated 4 January 2007, the Defendant explicitly states that “there has been no manual intervention on this account”.

 

- As set out previously, it is submitted that The Defendant’s charges can not be considered to be an administrative charge. In arguing that they are, they also effectively admit that they make profits from these fees. As set out above, the charges cannot be considered to be liquidated damages. They are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, and unduly and substantially enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

 

 

I, the Claimant, believe all facts stated to be true.

 

Signed, dated.

Documents attached in support of this statement

·Account Contract

·Office of Fair Trading report, April 2006

·House of commons early day motion, May 2006

·BBC commission conclusion

·Australian Default charges report, Nicole Rich

·Data Protection Act Subject Access Request for evidence of manual intervention and reply

·All pre-litigation correspondence between the parties

Any comments gratefully received

 

Steven

 

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[Parkvale]

steven as usual excellent post. GEdo tend to treat people with alot of contempt. You will certainly show them you are not going to be messed about. Good luck mate.

[steven4064]

Thanks Parkvale.

 

I have read through the statement again and I am going to modify it slightly to make the argument clearer -

 

1. There is a contract and charges are directly related to breaches of the contract

 

2. Therefore the charges are either liquidated damages (LD) or they are penalties

 

3. The fact that they call the 'administrative charges' does not alter this

 

4. OFT says that if charges are 'unfair' then they are probably penalties

 

5. The charges are unfair because they were not negotiated, they are one-sided and they are not proprtional to costs.

 

6. To be LD they must be proportional to costs but

 

7. Defendant has been very coy about their costs, so

 

8. Lets estimate them using other info - OFT threshold, Australian study, US study, moneybox programme - all come to the conclusion that actual costs are very small

 

9. Charges are levied by the Defendant automatically - there are no letters, or any otehr communication, the charges are simply added to the next statement by the computer which means

 

10. This cannot cost £18 (or £15 or £12)

 

11. Therefore the charges are not LD but penalties as contended.

 

Steven

 

[Parkvale]

(3) The fact that they call them a charge and not a fee.Is also significent.

(5) This would be covered by the UFCC regs 1999.

(10) Back to square one.Is the charge preportional to the actual cost ?

(11) ANSWER COMPLETE.

[steven4064]

(3) The fact that they call them a charge and not a fee.Is also significent. - Good point, I'll add that

(5) This would be covered by the UFCC regs 1999. in fact I quote from the regs at length in support of this - in fact the 3 points come form the regs

(10) Back to square one.Is the charge preportional to the actual cost ? I'll make that link back clear (I have also note that they actually say there was no manual intervention)

(11) ANSWER COMPLETE. QED

 

Thanks Parkvale - extremely useful as usual

 

Steven

 

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[Parkvale]

Steven you are like a little terrier. Once you get your teeth into something you will not let go.

[steven4064]

PArkvale,

 

If you are online could you have aquick look at the last post on this thread http://www.consumeractiongroup.co.uk/forum/natwest-bank/91443-day-court-help.html#post848799

 

Mymoney has to get it in the mail before 5pm

 

Steven

 

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[steven4064]

Received an

 

UNCONDITIONAL OFFER

 

today for the full amount

 

It is worth hanging in there!

 

Steven

 

 

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[sarah13]

Well done- excellent news. all that hard work definately paid off

[zootscoot]

Fantastic news...

 

:D

Congratulations!!!!!!!!!!!!

[steven4064]

Thanks Sarah, Zoot

 

Steven