Halifax refuse to refund charges after snotty letter

starkey444 · February 22, 2006

Hi all,

This is my forst post on this forum and I am hoping someone might offer advice on what I do next. My wife was charge Â£178 in overdraft fees as detailed in the letter I sent them below. I found the sample letter on the internet and duly sent it to the Halifax on 2nd Feb hoping for a successful outcome.

Unfortunately, we received a reply from Halifax on 8th Feb stating that under the Terms and Conditions of the account, they were within their right to levy the charges and refused to refund any charges as there had been no error on their part.

Having been a good customer of Halifax for many years, you'd have thought this two day slip-up (where the charges levied were THREE TIMES the amont my wife went overdrawn) might have warranted a good-will gensture on their part -but no.

My feeling next is that I should follow through on my threat to commence Court proceedings, but I havent a clue A) how to go about this B) what it would cost me if I failed C) should I be considering this as the next step anyway.

Any thoughts would be gratefully received.

Chris

PS, my letter to them was as follows (was this the right thing to do?)...

Halifax plc

PO Box 101

Halifax

HX3 0TA

Dear Sir/Madam

Penalty & unfair charges â€“ request for refund for Sort Code xxx, Account yyyy

I am writing to complain about the unfair charges which have been levied on my account. On 23rd January 2006, I was expecting my account to slip into the red. I noted this and immediately transferred Â£100 from a Barclays account using on-line banking. This payment was debited from the Barclays account on the 25th January but was not credited to the Halifax account until the 27th. I also transferred Â£50 from another Halifax account on 26th January to play safe. However, in this very short time, 5 debits were made from the Halifax account totaling Â£173.86 and according to my statement, the maximum my account went into the red was Â£65.02. Despite my best efforts, due to the timing of payments and debits my account slipped into the red on 25th and 26th January..

I then received three letters from yourself detailing that I was to be charged Â£30 for each debit (ie Â£150) plus Â£28 as an unauthorized overdraft charge. I immediately contacted your telephone banking hotline and was treated indifferently. With my good track record and the length of time I have been with your bank, I fully expected a little more help in this matter. But given the completely cold and unsympathetic treatment I received I now feel it necessary to take this matter further.

I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. Your charges do not reflect any actual or real loss, instead they appear to represent a lucrative profit-making scheme.

On a separate note, your charges appear to represent an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under reference to paragraph 1(e) of schedule 2 of the said regulations:

â€˜Indicative and non-exhaustive list of terms which may be regarded as unfair - 1. Terms which have the object of effect of - (e) requiring any consumer who fails his obligation to pay a disproportionately high sum in compensationâ€™.

0n 26 July 2005 the OFT stated that 'a charge is likely to be disproportionately high if it is more than a court would be likely to award if the lender sued the cardholder for breach of contract'. Because your charges include a lucrative profit margin, in addition to actual loss, they are irrecoverable as an unfair term in contract.

I believe that your charges require me to pay a disproportionately high sum in compensation for being overdrawn without mutual agreement.

Please refund these charges to my account within the next 7 days, or I will commence court proceedings without any further notice.

starkey444 · February 22, 2006