A New Way of Looking at Interest- 1st successful Claim - N'wide

[bram stoker]

Yes, I would agree with the taxation point, as that could be seen as "unearned income on investment", and would have to be considered carefully. However, would that apply to the 8% as well?

Court awards are net of interest. However a recovery of interest at the contractual rate would be subject to tax. Thanks to BF for info.

[Spiceskull]

If it's not the bank, it's the bloody taxman!

[thecornflake]

If it's not the bank, it's the bloody taxman!

 

I can see it now -

 

"Inland Revenue taken to court over 'unlawful tax charges'"

[Spiceskull]

I can see it now -

 

"Inland Revenue taken to court over 'unlawful tax charges'"

Unfortunately nothing the IR does would ever be judged unlawful - incompetent perhaps, and even maybe ignorant, but not unlawful If you want a good example of this, check out the Mapeley Steps fiasco...

[thewifeandI]

Court awards are net of interest. However a recovery of interest at the contractual rate would be subject to tax. Thanks to BF for info.

As far as I can see we have 'lent' them money from our accounts over a period of years. During that time they have charged interest on that money when we have been overdrawn, and if the money hadn't been taken, we would have earned interest on that money - so we are losing out twice. If the recovery of the money taken is done in a way to restore that interest (which in my opinion it should be) then I suppose we would be liable to be taxed on the interest regained as we would have done had the money remained in the account.

 

I think that the court should be able to require the banks to restore the equilibrium so that we are not out of pocket for the offence.

 

Cheers.

[lookinforinfo]

Thanks for all your efforts to explain BF's original point. However I still feel that

any decent lawyer would knock "borrowing" into the long grass all day. However,

after looking up the word, there is a substitute which I think would give us a

much better chance. "Misappropriation of funds" is an alternative that I feel is a

more accurate reflection of the bank's actions.

 

On the point of taxation, this is where the painstaking efforts come into play. I

am sure that those wonderful chaps at the Inland Revenue [in case they are reading] would surely allow us to offset interest that the bank had deducted from

us, including that at 29%, against the interest awarded on the whole amount.

[Spiceskull]

That is a very good substitution: misappropriation of funds has a certain 'shady dealing' feel to it...thanks.

[angry cat]

Hi !

 

I have just posted 'A question about claiming interest back' in General and the question was posted prior to seeing 'A new way of looking at interest'.

 

As I have been unsuccessful at opening the Excel spreadsheet, I went about the laborious task of working out the interest by hand with the help of my ancient calculator! Anyhow, I have managed to work out the County Court 8% interest on each individual fine, in order that I could submit my Court Claim and then I got to thinking about the issue!?

 

Now, I have noticed that your thread is more about Bank overdrafts when my post relates to credit card penalties. However, the issue is not disimilar in that, the penalties applied were dissproportionate and interest started to accrue on each separate fine on the date it was applied. In my case the fines are just £280, made up of 14 separate £20 fines over a 5 year period. I worked out the Court interest at £58.2956 making a total of £338.2956p I then went to bed intending to submit my Court claim the next day. After a restless night thinking about the matter, I came to the conclusion that the above amount must be incorrect!?

 

Each fine had an added interest rate of 1.313% per month = 15.75% per anum

and of course, the interest has been accruing on each fine of £20 from 06/11/2001, 04/05/2002, 01/06/2002, 02/08/2002, 06/08/2002, 03/10/2002 and so on up to 04/05/2006. There are 14 fines of £20 in total.

 

I realise that credit card interst rates are incredibly complex, but even if one works out the first fine at say 15% per anum - £20 fine levied 06/11/2002 then the interest over a 4.5 year would be £13.50 just on the one fine, the amount of interest of course decreases as the time of the applied fine gets less.

 

Maybe, I am dumb but surely it makes 'common sense' to add the separate amounts of interest to each dated fine/penalty on the claim form, prior to adding the County Court 8%

 

The bank has charged the interest in relation to the fine, which would not have been taken had the fine not been levied in the first place.

 

I hope that my thoughts make sense and I welcome your comments

 

Kinf regards

 

Thanks

angry cat

[Spiceskull]

Hi AC

As I have been unsuccessful at opening the Excel spreadsheet, I went about the laborious task of working out the interest by hand with the help of my ancient calculator!

Was this problem due to you not having Excel, or was the problem with the spreadsheet itself?

Maybe, I am dumb but surely it makes 'common sense' to add the separate amounts of interest to each dated fine/penalty on the claim form, prior to adding the County Court 8%

 

The bank has charged the interest in relation to the fine, which would not have been taken had the fine not been levied in the first place.

You cannot charge the bank's interest rate PLUS the 8% APR. The logic is this:

 

By not charging their rate, and therefore the bank holding your money for free over the years, the court allows you 8% as a way of realising some of the money you would have otherwise earned if the bank had not misappropriated your funds to start with

 

By charging their rate, if the court allows your claim to go through, then you will have been deemed to have recovered your money AND the money you would otherwise have earned. As such, there is no outstanding 'debt' by the bank to which the 8% applies...effectively you have recovered what you could have got if the bank had not misappropriated your funds...

 

I hope this makes sense...

[angry cat]

Hi Spiceskull-

Thanks for replying to my post-

 

Re: Excel spreadsheet- I have tried numerous times to open the Excel spreadsheet but my quite modern computer will not open the programme. I have only got Adobe Acrobat.

 

No matter, I am not an idiot - I hope! and the ancient calculator is a STAR.

 

Okay so I understand, that the Court allows 8% for allowing the bank the use ones money for free, for 5 years. Rules are Rules !

However, this is crazy as I have been charged 1.313% per month on the fines, which equates to 15.75% per anum, probably more like 16% plus depending on what calculation of interest that the bank uses?

 

Basically in effect, the Court could allow one to recover less than a third of the interest charges via these penalties. Okay, well I suppose that is better than nothing, that is if ones claim is successful.

 

I have worked out separately, every single fine, date levied and interest rate that was, and has been applied on every single fine. Separately, I have worked out on a daily rate every single fine, date levied and applied the County Court Act 1984 8% interest. The interest on the latter works out at half or less than the amount of interest that I have been charged....!

 

The Law is the Law, but these credit card companies use such complicated equations on the their interest rates, I wonder if it is correct to be just able to reclaim 8% on penalties of 14 £20 fines levied 14 times over 5 years, with accruing interest being added all the times at 1.313% per month = 60 months.

 

The interest that has been added over the 60 months to my account comes to £103.20 and this amount has been taken/charged from my account, due to Unlawful/Unfair Penalty fines and this accruing interest has resulting in more fines.

 

The bank has missapropriated funds and distorted my balance to it's advantage-

 

This is a scandal and immoral even worse they get away with it-

 

Sorry, Spiceskull ! I know that I ramble on....but they (banks) make me an....

 

angry cat - I am actually a very Purry nice kitty LOL

[lee6370]

Spiceskull i've read what you have written several times and it still makes no sense.

 

Angry cat, you can claim the following.

 

1. the charges

2. the interest the bank has added to the charges

3. When you get the court stage 8% (i wont confuse matters with what being discussed here)

 

So if the bank has charged £20.00 and then added £5.00 worth of interest at 16% you can claim back £25.00, then when you get to the court stage you can claim 8% on the £25.00.

 

It's as simple as that.

 

As far as the discussion here goes all thats being said is, if you have a contract which already has an interest rate in it then you can use that instead of the statutory 8% allowed by the court. So ineffect they would have charged you 16% so you can charge them 16% on your £25.00.

[Spiceskull]

Hi Lee,

 

When I said you can charge either the s.69 8% APR OR the banks rate, I meant that you apply one of these rates to everything you are claiming. This is 'penalty charges' and 'penalty interest charges'

 

Sorry if that bit wasn't clear. The 'penalty interest' that the bank has charged you is a fixed amount, removed from the account on a fixed date. This info is usually visible on your statements.

 

This is why the wording of the refund request is '...I calculate...charges...and penalty interest...' You then claim interest from the 'date of offence' to 'today' for each individual itemised charge, using one or the other of the two rates mentioned above.

 

I hope that clears up the confusion...

[Spiceskull]

Re: Excel spreadsheet- I have tried numerous times to open the Excel spreadsheet but my quite modern computer will not open the programme. I have only got Adobe Acrobat.

The spreadsheet will not open in Acrobat - you need an application that will open office documents.

 

It appears you do not have Excel, so you need to either use a machine that does have it, or you can install Open Office instead.

 

If you click this link Open Office - you will be able to download a copy, and if you click this link Spreadsheet you can download a spreadsheet that will work with Open Office.

 

If you have problems with either, PM me...

[lee6370]

Spiceskull, sorry, yes i see what you mean now.

[Spiceskull]

Spiceskull, sorry, yes i see what you mean now.

S'cool - it's my own fault for not explaining myself fully - no need to apologise...

[angry cat]

Hi Guy's !

 

I have been considering about what I should be requesting with regard to the amount of monies that are owed to me, in relation to these Unfair Penalty Credit Card charges.

 

Of course, I am aware of the number of fines that have been levied on my account but because I have incurred interest at the Bank's contractual rate for 4.5 years ongoing, which distorts the balance. I made the decision to request re-payment of the accrued intererst as well as the penalty charges that where applied.

 

Therefore, I have submitted my Claim to the Court, itemising the date of each fine, amount of fine + how many years, months, days and adding an average 15% interest that I have worked out on a daily rate. I have also claimed interest pursuant to The County Courts Act 1984 at a rate of 8%, from when the money became owed to when I issued my Claim.

 

I added on my particulars of claim -

"The claimant claims interest at the contractual rate of interest or in the alternative, 8% interest a year pursuant to section 69 etc.....

and also interest at the same rate up to the day of Judgement.

 

Hopefully, I have filled out the N1 correctly? however, it makes Common Sense to add the interest owed, because it applies to money that has been unfairly taken-

 

Any thoughts?

 

Thanks

angry cat

[Spiceskull]

Only real issue is that you can't claim BOTH rates of interest - it is either the contractual rate OR the s.69 rate (8% APR)...

 

Sorry - just noticed that you claimed either/or...not both. Oooops!

[angry cat]

Hi Spiceskull-

Thanks

angry cat

[caro]

Having read the whole of this thread, I think that what BF has suggested is what I have thought all along. Why not claim interest at the rate we were charged by the banks.

 

My biggest claim is from Yorkshire Bank and I used Vampiress' spreadsheet to calculate the interest. This is calculated (I understand) on the proportion of actual interest charged which has arisen as a result of penalty charges. I was disappointed at the interest amount, as it is £185.58. I closed the account in 2003 so have only claimed interest paid to then, as I was not clear on how else to calculate it (apart from the 8% spreadsheet).

 

The amount of interest on the sheet calculating interest @ 8% from the date of the penalty, to today (31 May) is £992.10. Presumably if the calculation was changed to, for example, 16%, this would be double.

 

1. As the account was closed over 3 years ago, would it seem acceptable to claim at, say, 16%?

 

2. Having sent my prelim letter, do you think I should send another prelim letter claiming the extra interest, or could I say on LBA (due to go Friday) that I have recalculated interest?

 

3. Presumably the rate of interest will have changed over time so how can I determine the rate I was charged and the rate for the time since the account was closed?

 

I do not wish to appear greedy, and I especially want to appear reasonable to the court should it get that far. I do not feel guilty claiming back all that I can as I feel interest is owed on this money whether or not I go to court. The anguish caused to me by banks over the years cannot be compensated for with money.

 

I would like to follow this course of action, so any advice would be appreciated.

[Spiceskull]

There are three rates of interest: s.69 (8% APR), Authorised contractual rate (between 10% and 20%) and Unauthorised contractual rate (usually above 20%)

 

For my big claim, going back to 1982, I am going to use the authorised contractual rate, as that is the only published rate I can find.

 

I think the unauthorised rate would be pushing your luck, because whilst the bank may have taken your money without your authorisation, they could argue that you weren't providing them with a service.

 

However, the 16% you suggest is perfectly reasonable, and you could reasonably have been expected to pay this rate if you were borrowing from the bank for a long time. The judge is also likely to see this as reasonable rather than greedy, and you are therefore more likely to win with this rate.

 

There is still a risk that the bank will try to contest this, especially from a contract perspective, but as a few people are trying the "mutuality and reciprocity" argument there will be planty of feedback to rely on by the time it gets to court.

 

Good luck.

[caro]

So do you think I should resubmit the preliminary letter or change the interest amount on the LBA? And just to confirm, you think 16% would be reasonable for the entire period to date, despite the account now being closed?

 

Also should I attach documentation showing my calculations?

[alanfromderby]

2. Having sent my prelim letter, do you think I should send another prelim letter claiming the extra interest, or could I say on LBA (due to go Friday) that I have recalculated interest?

 

In your LBA I would say something like:

 

since my previous letter I now understand that the principle of mutuality, or reciprocity, applies to the aforementioned contract etc.

[alanfromderby]

So do you think I should resubmit the preliminary letter or change the interest amount on the LBA? And just to confirm, you think 16% would be reasonable for the entire period to date, despite the account now being closed?

 

Also should I attach documentation showing my calculations?

 

 

I am using 16.9% - which is Abbey's currect advertised o/d rate, I also say in my LBA that I believe that I could have claimed the unauthorised o/d rate - but that "as a gesture of goodwill" I am only charging them the authorised rate.

 

I would not send the calculation with the LBA - they should be able to work it out for themselves. Obviously you should attach it to the N1, and if you are using this approach please be aware that the extra text you need makes it impossible to fit onto moneyclaim.

[caro]

Thanks Alan and SS. Looks like I'm going to be busy this weekend. Wish I could make a donation now, but I'm afraid funds won't allow. I won't hold back when I get my money back though.

[Don Quioxte]

This issue of mutuality is I feel tenuous at best. I cannot see any legal precedent for charging a bank the reciprocal APR that it charges for its lending operations (authorised or otherwise). The bank is a financial institution, a business, which it is commonly agreed provides a service to individuals for which it charges fees and interest in order to generate revenue and profit streams.

 

To claim as an individual, as Bankfodder pointed out, that mutuality exists once the bank has taken charges unlawfully as this represents effectively borrowing by the bank - is, I believe an unreasonable assertion.

 

I don't want to waffle about legalities and precedents (all of which I know very little of) - but as a layman, it would be my opinion that the only compensation that would reasonably be granted by a court in terms of the bank's breachof contract in such instances (aside from sec69 interest) would be REASONABLE compensation for potential monies lost due to the unlawful retention of the charges by the institution.

 

In my opinion, it is unreasonable to assert that you as an individual could command an APR of 16% or anything like, as you do not possess the investment power of a financial institution. At best, as an individual you could hope to earn about 1.5 - 2 percentage points above the Bank base rate on typical savings, and maybe up to 10% on higher risk, index-linked investments such as ISA or OEICs.

 

By claiming at reciprocal rates to the bank you are implying two things.

 

1. That you as an individual deserve the same recipricocity as a financial institution and deserve to be treated as a business, despite your lack of overheads and administrative costs.

 

2. That as an individual, you feel you could reasonably command and earn similar growth (i.e 16%APR or higher) on your monies had they been available to you.

 

Neither point I feel is reasonable.

 

This post probably reads like gobbledegook and I will no doubt be put back in my box by those of you with superior knowledge. Just my personal opinion!!