Interest Calculation

[Mogullen]

Hi

Sorry to raise this but has anyone thought about the differnce in interest if they impose the £12 charge. I knnow this is daft but if they change the amount to this and back date it does this mean we will be able to get the banks/credit cards to reissue all our statements with this taken into consideration.

I have charges with capital one going back 6yrs and can only claim 8% but they have been charging me interest at 27.9%. Although we are starting to hurt all these institutions they are still winning in the long run.

Thanks for your time with reagrd to this matter.

 

Len:-)

[Guest Lueeze]

If they were to change to £12 (which is unlikely) They wont refund the difference, imagine the cost!!!!

 

The interest, are you not confused?

 

The 8% cannot be claimed until you issue a County Court claim. Any interest you claim in the meantime has to relate specifically to interest accrued by each individual charge. To callculate this you need a degree in applied mathematics - and it usually does not amount to much.

[Mogullen]

Hi

 

Am not confused at all. If they can charge me interest on charges from the date they are applied. Example Capital One 27.9%apr but I can only claim the 8% if and when it goes to court. They have earnt at least double the charge amount in interest which you I and all the others are paying.

Surely there must be a way to claim this back as well.

[Guest Lueeze]

No, when you borrow, you agree to be charged at this rate, so this is legal, its the interest applied to the charges that are unlawful.

 

However if you have charges applied, you can claim a portion of this interest against the charges, for instance a charge of £30 on top of borrowing of £1000 would be £1030, if the interest was added for that month, you would need to work out what % the charge was in comparison to your borrowing, and add that to your claim.

 

If this makes sense, the 8% is set by the court, but currently Dave it looking into claiming back Interest at 19.9% that they use on his account, the reasoning on this is that if its good enough for them its good enough for us. However it has not been tested yet.

 

Lou x

[Mogullen]

It is only the interest on the charges that I am concerned about. I agree that the rest is lawful. But when they apply a charge and keep charging us it is criminal. Hopefully someone can work out a formula for this.

As it is only it seems the credit cards that do this at such a high rate it is about time I think that we hit them for all we can.

 

Len

[Guest Lueeze]

I agree, but as the interest is a lump sum added on wether monthly quarterly or annully, its near impossible for us to work a formulae out for it.

 

As the interest added and the % that relates to charges versus borrowing varies for every case.

 

Most people just dont claim it, as usually it works out not to be that much. Its a shame but the only other alternative it to guess, add it to the claim as an estimate and then get bank to give us the exact figure.

[Geraintheath]

This seems to be a great point of confusion.

 

You cannot claim the 8% apr until it goes to court. That is now pretty much known by everyone who has read the FAQs. However, as some of us have been charged £25 upto 6 years ago then we have been charged interset at a very high rate on our debts. Possibly the unauthorised overdraft rate of 25%+. Calculating how much they owe you for this is extremely difficult - no-one, to my knowledge, has come up with a method for calculating this as yet.

 

From what I understand, so far, it is for the bank to prove they don't owe you this money and prove it should be a different amount. Personally, I am adding an assumed amount of £400 in intersest accrued on my £1100 charges. Could be more!!??

[Mogullen]

I can understand that this is a very difficult calculation to undertake. And I agree it is probably best to just add a lump sum figure to your request for repayment and let them prove otherwise.

I think that as I have charges of £1067 that a figure of £300 is a starting point.

[Geraintheath]

In response to Lueeze's last point 'usually works out to be not that much'!?!

 

My overdraft (authorised) is charged at 9.9% per annum. If I had had £1000 in illegal penalty fees this time last year then I have been charged £99 pounds. Compounded, over 6 years, this is could be a huge amount of money!! If you have an unauthorised overdraft this figure could be collosal. Again, stealing from those who can least afford it!

[Guest Lueeze]

Well if that £1000 was 6 years old then yes, but people are finding its works out to be a very small proprtion in comparison to the total claim.

 

However I suspect that the 1st charge may be 6 years old and then it would go down the scale from there.

 

It really is so much hassle that its not worth the effort over cost.

[Geraintheath]

I really don't mean to try and be argumentative, but I genuinely believe that attitude is not helpful to those of us who are owed money, or is not being properly considered. A mere resignation that it is not worth the effort is contradictory to the point of this website and campaign. We are making an effort to reclaim our money after all!

 

My point is that I am owed an extra £99 in flat interest accrued in only one year on an amount of £1000 in penalty charges between 2000 - 2005. As this will have been compounded year on year the amount is considerable. e.g. If you were charged £200 per annum every year since 2000 in illegal fees this is how your debt would increase merely through being charged 9.9%.

 

Year..... Illegal money owed O/d..... interest @ 9.9%.... End of yr

2000..... 200..... 19.8..... 219.8

2001..... 419.8..... 41.56...... 461.36

2002..... 661.36..... 65.47..... 726.83

2003..... 926.83..... 91.76..... 1017.76

2004..... 1217.76..... 120.56..... 1338.32

2005..... 1538.32..... 152.29..... 1690.61

 

So, 5 years of £200 fees per annum will result in a debt of £1690.61, nearly seven hundred pounds more than the £1000 you have been fined!!!! No wonder I can't clear my overdraft!!

 

 

I have heard, but am willing to defer if someone can confirm otherwise, that it is for the banks to prove they don’t owe you the money. Adding a theoretical ball-park figure is not tricky and is for the banks to prove wrong. Veering towards conservatism will ensure you are being seen as reasonable and not pushing your luck.

[Guest Lueeze]

Its a shame but the only other alternative it to guess, add it to the claim as an estimate and then get bank to give us the exact figure.

 

Im sorry If you do not find my attitude helpful, I am being realistic and the above statement offers a solution to this but no promises attched! Most users here have problems just getting to grips with the procedure, let alone applied Mathmatics.

 

We are all volunteers, and unfortunatly have not go the resources to try and work out a formulae for this, as we have already provided spreadsheets and suport for the rest of the claim.

 

We say it is difficult to calculate because it genuinely is! Not because we are defeatest or unsupportive, I wouldnt be here if I was. Im merely stating facts that other users have found....

[Geraintheath]

Didn't mean to be rude or abrupt, sorry

 

You're correct it is nigh on imposisble to work out. What I have done is a mere paper exercise, merely illustrative, and far too simplistic to stand up to any scrutiny. If it were possible I'm sure we'd have been provided with a method for calculating how much we're owed. My point is not to ignore this interest. It can be significant amount as I've demonstrated.

 

As previously stated, I'm adding £400 to the £1100 I'm owed. Using the data I've just knocked-up it seems to be a good guess and is for them to prove it's wrong.

 

The work people have done on this site and for the campaign is fantastic and much appreciated. A marvellous resource. Thank you

 

Personally, I am going to donate as I wouldn't have been able to do this without your help. Plus, I know too many law students from Plymouth which is where a lot of this work has been done.

[Guest Lueeze]

I understand, Honestly we are always looking for new ways in which to earn money for this site, and imporve our ideas, to help people claim the maximum possible.

 

 

If we were able to work this out for people accurately, then we would have, but it really is a brain teaser, so for now Im afraid people will either have estimate the amount and hope the bank doesnt defend because of this (some may over compensate, some may be braver than me!) or just leave it off. Im owed alot of money, but when I tried to work it out I just had to give up. Each month when my Interest was added, it was a small amount and only say 5% of that interest related to the charge they had applied as oposed to my Overdraft.

 

Generally Current accounts are impossible just because of the % ratio for the overdraft spend against the % charge.

 

CC are slightly easier as all of it is at the same rate...

 

I just worked out 1 month for my Capital 1 card....

 

I had £40 fees in that month and was charged 80p for them in comparison to £28 Interest for my Borrowing.

 

Im not sure how this is worked out from then till now, but this is why i say its a small amount...

 

Lou xxx

[Spiceskull]

I believe that the proven, and supported, option is the best route to take.

 

Prelim and LBA: Penalty Charges and Penalty Interest (as itemised on statements) - as someone else noted, unless the bank can demonstrate what elements of interest they are entitled to, claim the lot. The best argument for claiming the lot is that cumulative penalty charges over the years (and prior to your claim dates) have put you in the position where interest is being levied now. You coud argue that without the charges, the bank would not be entitled to charge interest, and therefore they should refund it.

 

Claim: All of the above, plus costs, plus interest 8% APR, pursuant to section 69 of the County Courts Act. Again, you could argue that the bank applies much higher rates, but the 8% is supported by law, and therefore easy to enforce and argue.

 

If someone manages to win a case using a different rate, then the details will be available to others. However, this is unproven, and therefore risky, and the intention of the forums is to enable people to reclaim their charges in a proven and realistic way.

[bram stoker]

Please take a look at my spreadsheet in the bank templates library and let me know if it answers your questions.

[norvernrob]

I've just used your spreadsheet vampiress, and there's something some people may not realise with regards to working out their o/d interest. I was paying around £10 a month on a £1000 o/d, so interest on charges of £27.50 is around 27p of that £10.

 

However the next month, assuming you are overdrawn pretty constantly like I was you should add the previous months interest (27p in this case) and add the interest each month to the previous months figure.

 

I'm not sure if some people have just used the same small amount every month in the columns and come to a tiny amount like £9 or £10 (which is what I got first time around and was sure that was far to small a sum), but I have just done it by accumulating each months interest (27p, 54p, 15p etc depending on charges, some may be a few pence out but it's near as damn it) into the next months box, and I have come to a figure of £125.63 interest + £14 @ 8% should it go to moneyclaim.

 

Here is how I did it if it will help anyone to do theirs, obviously for it to be accurate you need to have been overdrawn roughly the same amount pretty constantly, but I would guess that isn't going to be a problem for most on here!

 

The reason for the differing amounts being added is that the amount of charges varied, from £10 - £75 and I worked around a figure of 27p on a charge of £27.50, assuming an o/d of £1000 and interest of £10 a month on that.

 

Date charged Interest on 8% interest

charges

01/01/2002 0.25 0.09

01/02/2002 0.50 0.17

01/06/2002 0.75 0.24

01/07/2002 1.00 0.31

01/08/2002 1.25 0.38

01/10/2002 1.50 0.44

01/11/2002 1.75 0.50

01/12/2002 2.00 0.55

01/01/2003 2.25 0.61

01/05/2003 2.42 0.59

01/07/2003 2.59 0.60

01/10/2003 3.10 0.65

01/11/2003 3.27 0.67

01/12/2003 3.37 0.66

01/02/2004 3.72 0.68

01/05/2004 4.23 0.69

01/06/2004 3.57 0.56

01/08/2004 3.92 0.56

01/09/2004 4.28 0.59

01/10/2004 4.45 0.58

01/11/2004 4.92 0.61

01/12/2004 5.28 0.62

01/01/2005 5.68 0.62

01/04/2005 6.08 0.55

01/10/2005 6.38 0.32

01/11/2005 6.78 0.29

01/12/2005 7.50 0.28

01/01/2006 7.82 0.23

01/02/2006 8.09 0.19

01/03/2006 8.29 0.14

01/05/2006 8.39 0.03

01/06/2006 0.25 0.00

TOTAL £123.63 £14

 

This I believe is as close as anyone is going to get and I can't see any bank arguing with it. It isn't difficult to work out once you work around a basic figure (the 27p on a £27.50 charge for me)

 

Good work Vampiress. :O)

 

P.S I am almost at the moneyclaim stage and I haven't added this on. Is it too late or can I add it to the moneyclaim?

[Spiceskull]

If you are going to put a different amount on the moneyclaim form it might be prudent to let the bank know. You could word it to something like: 'I have given you 28 (?) days to consider my claim, and to refund my unlawfully applied penalty charges. Using statement information provided by the bank, I have revised my calculations, and my claim will now be for the amended figure of £x.xx. I will give you a further 7 days to consider my request before proceeding to issue a claim in the courts...'

 

This will demonstrate that you are applying dilligence to your calculations, that you are being more than reasonable (extra 7 days) and that you are trying to reach settlement without recourse to the courts.

 

Good luck.

[bram stoker]

Norvernrob,

 

You are talking about compound interest, and are correct that it is not included in the calculations in my spreadsheet.

 

The notes in my spreadsheet state:

 

Interest on previous unlawfully charged interest has not been included.

 

and:

 

Charges are deemed to have been applied to the whole of the month in which they have been charged.

 

I figure one is a benefit, the other a loss. Please read the notes carefully. The interest calculation is an estimate.

 

If you think it has a material effect on a claim, then I will spend the time building compound interest into the workings, but unfortunately, I have limited time to go so far with it and am not sure it is worth a lot to anyone.

 

I hope this answers your question.

[norvernrob]

There is nothing wrong with your spreadsheet as it is Vampiress. Just that if I only count the 25p a month without continually adding it on to the following month then it basically adds up to a tiny amount that is hardly worth working out.

 

They have still kept the charge(s) from the previous month(s) so aren't we entitled to interest on that as well until it is repaid?

 

Sorry if i'm misunderstanding something altogether, i'm not a mathmatician either, but for me one calculation works out at about £10 and the other at £120+. this is on a claim of £1014 and based on being constantly £1000 overdrawn from jan 2002-present.

 

If anyone else has used this spreadsheet could you please put your calculated amounts up on here and maybe we can get some sort of figure going!

 

Edit: Just had another look, and after my 10th charge of £27.50 (making £275 obviously) my interest claimed has gone up to £2.50 for that month, around 1/4 of the total interest for the month the bank charged me at the time. As my overdraft was £1000 then the £275 of the o/d that is now bank charges is just over 1/4 of that, making the calculation about right.

 

I think I may have got crossed wires with you here and we are talking about the same thing, but some people who are working their interest out at tiny amounts may be doing it wrong?

 

I'm confused myself now!

[bram stoker]

They have still kept the charge(s) from the previous month(s) so aren't we entitled to interest on that as well until it is repaid?

This is dealt with as the formulae use cumulative charges in the calculations.

[Guest Lueeze]

I would have said it is the £10 amount....when people have worked the figures out, they have been a matter of a few quid, however i may be wrong, as I cannot use the spreadsheet (not got excel) I was just taking it from provious peoples views.

 

Thats why I was quoted as saying previously its hardly worth the hassle...

 

I would be interested to know however as I have hell of alot of charges!

 

Lou x

[norvernrob]

I can't see how the £10 amount can be right Lueeze. As I added to my last post, after £250 of charges have been taken I am paying 1/4 of my £1000 overdraft interest (1/4 of £10 = £2.50) on those charges the next month, and the amount is increasing every time I am charged.

 

Either I am missing something completely, or by the time I have accumulated £1000 in charges and I am £1000 overdrawn I am entitled to claim the whole months overdraft interest back as the overdraft is effectively made up entirely of charges.

 

Am I going mad?

[bram stoker]

Lol. You're not going mad. Maths is mad and I love it.

 

This is the situation. We always said the interest on charges calculation is difficult to do. I have created a spreadsheet as a tool for people to use. It does work and gives a very good estimate. You must be fairly competent in Excel to understand it fully. If you can complete it, please feel free to use it, but read the notes very carefully.

 

For some the amount will be a lot, for others, very little. If you can't calculate it you must make a decision as to whether you will claim all the interest or none at all or an estimate by some other means. It's your claim - we can only advise.

 

Take time to make careful decisions on your own personal situation.

[norvernrob]

I have always been pretty good at maths but I thought I was missing the point completely somewhere there!

 

Well my final months interest charge to the bank is about £9 on total charges of £1000, and seeing as they charge me around £10 per month on a £1000 o/d I am confident my figures are very close to the actual amount, if a tiny bit on the low side.

 

My moneyclaim deadline is on thursday, I think i'll send them a revised LBA tomorrow with the interest added on and give them another 7 days to refund.

 

thanks for the spreadsheet Vamp, it was very helpful! I'll make an extra donation when I get my money back!