Fullyskinted vs Bristol & West - ERC charges.

[Fullyskinted]

Well, I sent them the following letter on 2/1/07 re ERC of just over £3k.:

 

 

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34 Skints Row

 

Skinton

Skintonshire

 

SK1 NTS

Mrs C A Tucker

Bristol & West

PO Box 27

One Temple Back East

Temple Quay

Bristol

BS99 7AX

 

2nd January 2007

 

 

 

Request for Repayment of Early Redemption Charge

 

 

 

Dear Mrs Tucker,

 

Account Number: XXXXXXXXXX

 

I am writing to request a refund of the early redemption charge of £xxxx.xx which was debited to my account on 20/11/2006. I now understand that this charge is in all likelihood disproportionate to the costs that you actually incured. As such, this penalty is unlawful at Common Law, Statute and recent consumer regulations. Such disproportionate charges are considered to be unfair per se by the OFT who reported on 5th April 2006 and are therefore presumed to be unlawful in the absence of specific proof to the contrary.

 

If you believe that this charge is proportionate to the costs you have incured as a result of the early redemption of my mortgage, could you please demonstrate this by providing a full breakdown of those costs or a pre-estimate of your losses. Please note that I do not require an explanation as to why this charge was made; I am fully aware of the terms and conditions of my mortgage. What I require is a breakdown of your costs in order to reassure me that the charge is justified.

 

Having taken legal advice on this matter it is very clear, as you will no doubt be aware, that English contract law requires such charges to be a genuine pre-estimate of your losses. In the case of Castaneda and Others v Clydebank Engineering and Shipbuilding Co Ltd., (1902) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incured from a breach of contract as opposed to a charge which represents a penalty. This was upheld in the case of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. In addition to this, your charge represents an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SL. 1999/2083). Your charges constitute an unfair penalty under Schedule 2 of the said regulations which provide an indicative and non-exhaustive list of terms which may be regarded as unfair. Under paragraph 1(e) of schedule 2 this specifically includes terms which have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation.

 

I would also like to bring to your attention the following statement by the Office of Fair Trading:

 

A term in a mortgage agreement which requires the borrower to pay more for breaching the contract than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable at Common Law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations.

 

The fact that I signed the mortgage offer containing the term relating to the early redemption charge does not make this term enforceable, as I’m sure your legal department are fully aware.

 

I will now give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If you do not respond, or if you do not respond positively, within this time period, I shall send you a Letter Before Action giving you a further 14 days in which to reflect. While I would like to settle this matter amicably and without the need for court action and the attendant publicity this will receive, you can take this letter as 28 days notice of my intention to issue a claim should you not comply with my request. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

Yours faithfully,

 

 

Fullskinted

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Today, I recieved the following response from Mrs Tucker:

 

 

Following your recent contact with us I can Confirm that your compalint is being dealt with in line with out Internal Compaliants Procedure. A copy of our leaflet entitled 'A Helping Hand' which surmises this, is enclosed.

 

I am sorry that is has been necessary for you to make a complaint and having investigated the issues you have raised I would like to set out my findings.

 

I understand that you believe that the Early Repayment Charge of £xxxx.xx debited to your above mortgage account on 20th November 2006 is unlawful and as such you have requested that we refund these charges to you.

 

You have fully detailed the basis of your claim in your letter of 2nd January 2007 and have allowed us 14 days iun which to respond favourably. You state that if we fail to do so, you will issue a court claim for a rull refund of these unlawful penalties.

 

I ote your comments 'this penalty is unlawful at Common Law, Satute and recent consumer regulations'. However, we are not aware that there has been any rulings around these claims, if you are able to provide appropriate literature with this regard, we will review and consider accordingly.

 

You go on to say that we should not refer to your contract, howver, this is impossible as you make reference to the Unfair Terms in Consumer Contracts Regulations 1999 (SL.1999/2083). You also refer to your motgage agreement which itself is your contract with us. At the time you entered into this contract all terms were clearly set out. You also had legal representation, so you would have been advised of these terms.

 

The mortgage product which you agreed to take, gave you a beneficial interest rate which if repaid earlier resulted in the Early Repayment Charge and this was made transparent at the outset. At any time prior to completion of the loan you had the opprtunity to withdraw. The benfits of the mortgage payments were obviously less than they would have been under this product, to that of a mortgage based on the Standard Variable Rate.

 

An observation, how can you now therefore suggest these terms are unfair. On what basis can you argue, as you have signed your Offer of Loan and Mortgage Deed, both documents of which are enforceable in the Courts.

 

The Mortgage Deed itself would refer you back to the terms under which the mortgage was granted, which would also refer to the fees payable.

 

With regard to your statement concerning possible court action, I can confirm that if this matter should proceed for a hearing, this letter will be produced to the Courts.

 

In closing regrettable, I am unable to comply with your request to refund the Early Repayment CHarge.

 

I hope that I have clarified the situation and explained our position on this matter. However, if you should have any further comments or issues you would like to raise I would be grateful if you could contact me.

 

In line with the complaint handling rules issued by the Financial Servies Authority, if we do not hear from you within eight weeks of the date of this letter, we will assume that you have accepted the position and close our file.

 

Yours sincerely

 

Mrs C A Tucker

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Thoughts and way forward please

 

Im not so clear on thsi claim as I was on the Bank Charges claim - too many long words LOL

 

Thanks in advance!

 

FS

 

(ps, forgive me for the spelling errors in the type up of thie letter - I was in a rush LOL )

[zootscoot]

Hi Fullyskinted,

 

An original letter! They start by telling you what you wrote to them and then ask how the ERC is unfair when yothey've just quoted all the legal reasons from your letter that they are unfair!

 

Wait for the 14 days to expire and send your LBA!

 

There are a few taking on B & W now and they're not the easiest company to deal with but stick with it!

 

Best of luck

 

Zoot

[Fullyskinted]

Zoot I sent the LBA off yesterday - but now Im beginning to think Ive done a BOO BOO!!!

Some guys are telling me to wait a while and 'cover all the bases' (see Biffas thread with B&W).

 

What say you?

[biffa1965]

i think what it is skinted,is the fact that alanfromderby had an epic with them, i have a massive amount of charges to reclaim, but i need to get an explanation off them re the shedful of litigation fees theyve charged me. as for the ERC iam dealing with that as a seperate claim. but got to be honest not expectin an easy ride from this lot

[Fullyskinted]

I think I need to do some more reading up - the main thing is once the 14 days expire, I can issue a MCOL at any time. i.e. when I feel ready.

 

Any advice (other than readign Alans thread, but to be honest, it goes off at a few tangents due to the specifics of his case).

[biffa1965]

to be honest Skinted we re all pioneers in this ERC claiming business especially with Bristol and West as you know Alan is the only guy to have tackled em. But what i find encouraging is the fact that despite all the obsticles they put in his way, at the end of the day THEY DIDNT WANT TO GO TO COURT. so thats what gives me encouragment. go for mcol and show em you mean business, there s a few of us backing you up now biffa

[alisonf]

Hey there,

 

Hows it all going? I am now terrified, Ive just read jamorgans thread.

 

Maybe if we both file at the same time we can hold each others hands so to speak!

[Fullyskinted]

Biff - You say Alan is the only guy to have tackled them -do you mean successfully, or as in the only person to have gone against B&W?

 

Are there any more letters I can write to them - i.e. ask for a breakdown of their costs etc.

 

 

Alison - no probs. I think Ill be MCOLing next week. I have big hands too if that helps LOL

[alisonf]

I love you for saying that!!!!!! Im terrified after reading jamorgans thread...

[alisonf]

Alan is the only want to have tackled them so far and he was successfull

[Fullyskinted]

I love you for saying that!!!!!!

 

 

Yeh - the chicks love the big hands Heheheehe :D:D:D

[biffa1965]

yep alison, up to now alan has been the only one successful agaisnt them, mind you i think hes been the only one up against em, think alot of us waited to see what would happen,before gettin involved. dont think theres nothin to be scared of tho....biffa

[alisonf]

The bit I'm scared of is that I will be fast track, my claim is £5500, i will be liable for their costs~ IF ~I lose.. I also come out in sweats just thinking of filling forms in. Going to court does'nt scare me

[alisonf]

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/62003-important-erc-claimants-please.html

 

Now what???

[Fullyskinted]

I have a few more questions to ask them. Bit held up at the mo with other stuff, so this is taking a back burner for a week (which is when Im due to send the MCOL.

[Fullyskinted]

Ive decided to drop it for now after recent events...

[zootscoot]

Wise move FS

[alisonf]

Good move fullyskinted.