JGSmuzzy v HSBC**WON***

[brazed]

Hi,

 

Quick question, I received an offer letter from HSBC before I sent out my LBA (offer is 1/2 of what I am claiming). Do I still need to send the LBa and wait 14 days, or can I launch straight into the filing of the claim online?

 

Many thanks

 

James

[nettyg]

hi

you could contact the bank saying that you'll only accept what they are offering as partial settlement only as you are about to file a claim... see if they offer the rest!! whatever their response, get in writing not just a phonecall. send off the lba, so it shows that you are giving a reasonable time for them to respond with a satisfactory offer.

good luck

netty

[brazed]

thanks Netty, LBA will be sent out tonight. My wife has won against HSBC, so I think that they will know that I am serious, hopefully they will offer me the full amount.

[brazed]

Just received the transfer notice and a sheet saying that no AQ is neccessary. The claim is for a total of over £1000, so is there an AQ fee payable?

 

I am off to read in more depth regarding this new development.....hopefully, I am getting near the end of this!

 

Thanks

 

jgsmuzzy (brazed)

[lateralus]

had the aq been required then no fee is payable unless the claim is over 1500 -so no, no fee.

i wrote this thread one month ago when they started this business of dispensing with aq's.

it's made it a little more complicated in that each local county judge now has several options of how to deal with each claim - so - if you like, get back when you hear from the local court and we should be able to help.

in the meantime - remember the best case scenario is a full offer from dg - and to that end - send them a nudging letter - there are some letters to copy or tweak in post one of the new - 28 day thread in my signature below.

did you send dg a breakdown earlier on - even if you think they have one - if you haven't sent them one - do so - with a nudge letter - a nudge and breakdown every 10 days until they offer is my best advice.

[brazed]

Thanks Lateralus. I will get the letter sent to DG today, and wait to hear from the court.

 

Will let you know how it progresses.

 

J

[brazed]

Well I have a court date of the 6th July. The letter says I have to submit all documentation (statements etc) 14 days before the court date, which is a bugger.

[lateralus]

yes, it is - but don't be late with it - it's an all day job of copying - so leave time for it. and also, send dg a nudge letter telling them you'll be sending yours in on time - will they or would they like to resolve it now.

[brazed]

Thanks again Lateralus, most helpful. I will be sending yet another letter to DG tomorrow.

[brazed]

Right, no joy from DG and I need to have the bundle sent in for Friday. I am sending the following :

 

A statement of charges

All statements that include charges for the period

The following "Statement of Case"

The few letters I have relating to this case.

 

Please can someone read the following and let me know if you believe it to be ok?

 

Also, do I still need to send all of the unabridged stuff from the claim bundle?

 

Many thanks in advance.

 

James

 

1. The Claimant has the account xxxxx ("the Account”) with the Defendant which was opened in February 2002.

 

 

2. During the period when the Account was opened and 17th December 2006, the Defendant debited forty-six charges to the Accounts in respect of purported breaches of contract on the part of the Claimant.

 

3. A list of the charges applied is attached to these particulars of claim.

 

4. The Claimant submits that the charges levied to his bank accounts, as set out in the attached schedule, are, notwithstanding the contention of the Defendant, penalty charges arising from and relating directly to breaches of contract 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.

 

5. It is admitted that the Defendant’s 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, by virtue of the legislation cited in paragraph 4 above, exercises the contractual term in respect of such charges with a view to profit.

 

6. The Defendant avers that the charges levied are legitimate fixed price contractual services, unrelated to breaches of contract, which are therefore not required to be a pre-estimate of loss incurred on the part of the defendant. The Claimant further submits that this contention is merely an attempt to ‘cloak’, or disguise, their penalties in order to circumvent the common law and statutory prohibition of default penalty charges with view to a profit.

 

7. The Claimant believes the definition of a 'service' to be a provision of knowledge, skill or other transferable facility that benefits the consumer, and one that the consumer agrees is at a reasonable market rate commensurable with the service provided. The Claimant believes it to be inconceivable that the charges levied to his account by the defendant could be any form of ‘service’, rather than a penalty.

 

8. I understand the definition of 'breach of contract' to be the failure of a party, without legal excuse, to perform a contractually agreed obligation pursuant to any or all of the terms agreed within that contract. I have overdraft facilities with the defendant. These overdraft facilities have a contractually agreed limit, which is an express term of the bank account contracts between myself and the Defendant. When I exceeded the agreed overdraft limits, therefore breaching an express term of the contracts between myself and the Defendant, I was consequentially penalised for each such breach by way of a monthly charge of between £10 and £72.

 

9. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79, Lord Dunedin stated that a clause is a penalty if it provides for;

 

"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part;”

I.e. if it is designed to scare or coerce or is used as a threat. It is submitted that the charges applied are not representative of any 'service' provided by the Defendant, but instead are punitive, and held "in-terrorem".

 

10. The Claimant further submits that the Defendant’s contention that the charges are now a legitimate service charge represents a contradiction to materials published by the bank previously.

12. The Claimant refers to the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair within their interpretation of the Unfair Terms in Consumer Contracts Regulations 1999. With regard to the ‘cloaking’ or disguising of penalties, the OFT said this;

 

“4.21 The analysis in this statement is in terms of explicit, transparent default fees. 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’ or ‘allowing’ a customer to exceed a credit limit is no different from a customers default in exceeding a credit limit.) The UTCCR’s are concerned with the intentions and effects of terms, not just their mechanism”.

 

13. As submitted above, the Claimant believes the charges levied to his accounts to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the account contracts between itself and the Defendant. The Claimant vehemently refutes the Defence’s contention that they are legitimate contractual service charges.

 

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

 

15. 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 cost of HSBC's charges have increased on more than one occasion during the period in which my accounts have been held, at no time was I given the opportunity to negotiate, or even notified of these increases. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage

 

16. Following on from the above, the claimant does not accept The Defendant’s contention that the charges are enforceable as a service charge. It is not disputed that the Defendant is entitled to recover its damages following my breaches of contract, and it is entitled to include a liquidated damages clause. I accept without reservation the bank’s right to recover its actual losses or a genuine pre-estimate thereof. A penalty however, is unenforceable.

 

17. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850 which states that a contractual party cannot profit from a breach and that 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.

 

18. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. One of these principles being -

 

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

 

19. The Claimant will further rely on numerous recorded authorities dating throughout the 20th Century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

20. 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;"

 

21. The Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of my contractual breaches, including a written request in December 2007. This request was rebutted or ignored.

 

22. 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. By reviewing the charges against the above figure, 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.

 

23. 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.

 

24. For their recent BBC2 documentary “The Money Programme”, 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.

 

25. It is submitted that the Defendant’s charges are applied by an automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. It is therefore impossible to envisage how the Defendant can incur costs of between £10 and £72 by carrying out this completely automated process. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

 

26. 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 described such default charges as "exorbitant" and "excessive".

 

27. The Claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states bank charges are used to fund free banking for all personal customers as a whole.

 

28. As set out previously, it is submitted that The Defendant’s charges can not be considered to be a service charge. In arguing that they are, they also effectively admit that their charges make profits. The Defendant seemingly contends that their charges are not subject to any assessment of fairness whatsoever. This implies they can set these fees at whatever level they like without limit or regulation. Similarly, as set out above, the charges cannot be considered to be liquidated damages. They, by The Defendant's own admission, are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, held “in-terrorem", and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

 

29. Accordingly the Claimant claims:

 

a) the return of the amounts debited in respect of charges in the sum of £ 1,484;

 

 

b) Court costs;

 

c) The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year, from 17/05/2002 to 17/12/2006 of £300.78 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £0.39.

 

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

jgsmuzzy

 

20/06/2007

[freakyleaky]

Hi, sorry but I get dizzy reading the whole thing but at a quick glance it looks ok so far. Please have a look at lateralus's new thread court bundles for dummies. It really does explain everything in simple terms.

[brazed]

Thanks mate.

 

Another quick question. Do I send my bundle to HSBC in London, or DG in Brum?

[freakyleaky]

Dg in brum!

[brazed]

Well, court bundle delivered to the court today, and also sent to DG by recorded delivery. See what happens now, I suppose!

 

J

[freakyleaky]

Me thinks you will get an offer Tomorow, Saturday or Monday! ( just an eductaed guess so don't shoot me if I'm wrong)

Fingers crossed!

Good luck mate!

[brazed]

I have received a (nearly) full refund including statutory interest and court costs! I was £72 light because I hadn't seen that they had refunded a charge in 2003.

 

Please can someone point me to the letter that I send to the court to cancel proceedings? I am meant to be in court at 10am tomorrow!

 

Donation will be forthcoming very soon!

[livelylad]

Congratulations

[freakyleaky]

Firstly

CONGRATULATIONS

 

[lateralus]

as it is tomorrow - it seems a courtesy to ring them inthe morning - and then follow it up with a hard copy just saying your claim (give the number) has been resolved.

 

do you mean you have actually received the money? - if so - this is the way to go -

if you mean you've been offered a refund and have accepted but haven't yet received it - then you need to ask the court to excuse you from attending and tell them you have received an offer and are awaiting payment and you will tell them as soon as it arrives. but ask nicely for it to be kept active until you receive the money.

[freakyleaky]

Now if you are due in court at 10 tomorrow then a letter is no good. You will have to ring the court and tell them that your claim has been settled. People advise waiting until the money is in the bank before informing the court it has been settled. If you have not got the money yet then you might want to ask the court for a stay of a week in order to recive the funds.

[freakyleaky]

Lat you still put me to shame! Now why could't I have said it like that?:o

[lateralus]

wisdom comes with age - that's why i'm so smart!

[brazed]

Thanks Chaps. I have actually received the money. I rang the court today, and they asked me to fax my letter over to them. Apparently that is enough. (I have the fax confirmation).

 

Thanks again for the help

 

J

[lateralus]

CONGRATULATIONS!!!!!

all's well that ends well!

good on ya!

[livelylad]

Thread moved to success forum.