Mattfromnotts vs. Halifax PLC

[mattfromnotts]

Hi - I paid £2,394 to get out of a 5-year fixed mortgage with Halifax last year. On top of this, they charged me an extra 'admin' fee and another £50 to post the deeds, which weren't sent by courier. I have researched Zootscoot's successful claim against Halifax on this site and have also tried Penalty Charges website, but I have a couple of questions you may be able to help with:

On the statements I have from Halifax breaking down the mortgage there are actually two loans - A & B - with A being the actual amount I borrowed. Is the B loan a MIG? Is this also unlawful? Can I try and claim this back as well as the exit and admin fees?

Can I add the standard 8% interest onto my total claim?

Should I start by asking them how they calculate the fees or just send them the claim letter outlining the fact that I know the charges to be illegal?

Thanks.

Mattfromnotts

[mattfromnotts]

As I want to get moving on this and have had no response, I assume nobody is sure whether Mortgage Indemnity Guarantees are recoverable. I have therefore sent the letter below, which is a slightly amended version of Zootscoot's standard to the Halifax.

 

Re: Request for repayment of charges

 

ACCOUNT NUMBER: XXXX

Dear Sirs

 

We are writing to ask you to refund the charges levied on the above mortgage account in respect of redemption fees to the sum of £2820.09, the sum of £201.09 representing the contractual rate of interest applied in respect of the said charges (please find enclosed schedule of charges, detailing dates, amounts and interest). We now understand that such fees are unlawful under Common Law, Statute and recent consumer Regulations.

 

In the 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, as opposed to a charge which represents a penalty. This law was confirmed and upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. A charge will be held to be a penalty, if the stipulated sum is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach. A penalty clause is void in its entirety and unenforceable. Since the Bank of England base rate, which dropped to 3.5% shortly after taking out our loan, remaining at or under 4.50% for the majority of the 3 years, 3 months we held the loan, was substantially less than the interest rate Halifax PLC applied to the loan, this weakens even further any argument that Halifax PLC incurred a loss due to our breach of contract.

In addition, your charges represent an unfair term of contract, contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Since we are consumers, our account falls within the ambit of Regulation 5 of the Regulations. Your charges constitute an unfair penalty under Schedule 2 of the said Regulations, which provide an indicative and non-exhaustive list of terms that may be regarded as unfair. Paragraph 1(e) of schedule 2 specifically includes terms that have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation. We would vigorously contend that this is the position regarding the fee of £2619.00, which you deemed fit to apply to our account.

 

Furthermore a fee levied requiring us to indemnify you against any commercial risk to yourself in offering us a reduced interest rate in order to attract our custom is also contrary to s.4 Unlawful Contracts Terms Act 1977. We are confident that a court is likely to consider this clause to be unreasonable within s.11 of the said Act, as a large commercial institution such as Halifax PLC is in a far better placed position than us as consumers to bear the burden of the vicissitudes of business.

 

We would like to bring your attention to 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 terms 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 both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement."

 

We believe that the charges of £2619.00 that you have levied for early redemption and associated ‘sundry administration fees’, such as deeds despatch and account closure fee, far exceed any true cost to Halifax PLC as a result of our breach and any genuine pre-estimate you could conceivably reach. If you disagree, then kindly demonstrate this by providing a full breakdown of the costs incurred as a result of our breach of contract, in order to prove that your charges are a true reflection of your costs.

 

Your responsibilities

 

We would draw your attention to the terms of the contract, which you agreed to at the time that we took out the loan. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner that complies with UK law.

 

We consider your assertions that your charges are fair and reasonable to be deceptive and that the manner in which you have operated our account is unlawful. Your concealment of the true nature of your charges has prevented us from asserting our rights until now.

 

Our targets to resolve this matter

 

We really hope that this matter can be resolved amicably and without the need for redress to the courts. Thus we are asking that you refund, in full, the charges levied unlawfully on our account. Failure to refund all the money unlawfully taken from us will result in us taking further action. We will give you 14 days from the date of receipt of this letter to reply, accepting, unconditionally, our request in principle and advising us of the date by which we will receive payment. If you do not respond within this time period, or the response is not positive, we shall send you a letter before action giving you a further 14 days in which to reflect. We believe that these targets are more than sufficient for a large company such as Halifax PLC with its dedicated staff and departments.

 

After that, there will be no further communication from us and we shall issue a claim at the expiry of the second deadline. Thus, take this letter as 28 days written notice of our intention to issue a court claim should you not comply with our request. I hope that you will enter into a sincere dialogue with us about this matter and we are writing this letter to you on the assumption that you will prefer to do this, rather than merely responding with standard letters and leaflets.

 

Yours faithfully,

 

 

[mattfromnotts]

Oh well - the letter has gone now, so we will see what the Halifax replies. Hopefully they won't be as clued up as the Kensington...

[mila]

Hi Matt,

 

I have also started my claim for ERC (£2700).

 

In your prem letter, the claim you are making, is that for ERC, because as per your letter, what did you use for your shcedule of charges, the standard spreadsheet?

 

please help

[mattfromnotts]

Hi Mila

 

Yes - the charges broke down as follows:

ERC - £2394.00

Exit 'Administration' Fee - £175.00

Deeds despatch - £50 (this one actually annoyed me the most!)

Total - £2619.00

 

I then just applied the dates and amounts to the standard spreadsheet to arrive at the total I claimed.

 

Hope this helps.

 

You may want to look at Zoot's sticky re ERC claims though before going ahead.

[mila]

Thanks Matt

 

I have read Zoots sticky too, but wanna go ahead.

 

Is it ok to use your letter above,

and did you send it to the Trinity road address?

[mattfromnotts]

Good luck!

 

Feel free to use the letter - it was a variation on Zoot's standard one anyway. Send it to the Trinity Rd. address but send it special delivery - that way you can track when and to whom it was delivered and start your count from then.

 

Matt;)

[mattfromnotts]

p.s. don't forget to start a thread so we can keep track.

 

Matt

[mila]

Thanks Matt,I have already started a thread - mila v Halifax (ERC)will keep you posted

[mattfromnotts]

Does anyone have a copy of Halifax's terms and conditions covering the period 2002-2006 that can be uploaded to the site?

[mattfromnotts]

After sending two reminder letters, I received a fob-off letter from Halifax, albeit a polite one, in which the now standard defence of "it's not a breach of contract" was traipsed out. Funnily enough they claimed not to have my first letter, even though I sent it next-day registered and got proof of signature from Royal Mail!

 

Is it worth sending a further letter to argue this point based on points in draft directions or just wait for the winds of change? No proceedings have been instigated at this point.

 

matt