My Head hurts

[crusty git]

An obscure thought came to me recently and is realy doing its best to drive me into a state of gibbering Lunacy, (not difficult I know)

 

Nationwide defaulted my flex account for £500 without any warning or (as far as I can see) paperwork.

 

They then sold the debt to a recovery outfit (Morecroft's)

 

This "debt" consists of charges which we all now know are illegal. If Nationwide repay these charges the theory was I would pay the debt recovery outfit.

 

But- If Morecrofts are attemping to recover an "illegal" debt this must be irrecoverable so can I refuse payment?

If you take it back one step do Nationwide have any right to sell a debt which consists of illegal charges?

 

This seems open up the vista of a whole new ball game

 

Help please before the men inwhite coats arrive.

[Bovvered]

Regardless of whether the bank sold or passed on the debt to Morecrofts, you still reclaim charges back off the bank. You can pay off any outstanding debt with the money you recover through your claim and in effect the debt will be satisfied - that is what I'm doing with Capital One - I have debt collectors chasing after me, and I'm telling them the amount is in dispute until I recover my charges..

[jonni2bad]

You might also find - presuming that you are lucky enough to receive your payment by cheque, and not through your account - that you can offer the DCA a sum below what is currently outstanding, and effectively walk away in profit!

 

I.E. You owe £500, all of which is made up fom unlawful charges.....

 

You claim back the £500, they pay you by cheque...

 

You offer the DCA £300 to clear the account, they accept, you keep £200....

 

However, I think it's more likely that a bank will pay into the account, not giving you that option.

[lookinforinfo]

Not quite sure that your reasoning is correct on this Crusty Git.

In most instances we are reclaiming unlawful bank charges that we have already paid. So when this money is returned to us, it is our money to be dispensed how we wish.I may be wrong, but as your debt is now with "Collectors" if Nationwide are to comply with the Courts, they must get Morecroft to cancel the debt. They cannot repay you what you have not paid. If all the debt is through unlawful bank charges, then the only money you would get back is whatever you have paid already to reduce the debt. Plus if Morecroft have levied any additional charges on you, they should also be cancelled.

[jonni2bad]

..In most instances we are reclaiming unlawful bank charges that we have already paid...

 

Whilst in most cases this is correct, it is not definative. I am claiming back £2024 from the Halifax, but my account is about £650 overdrawn - so I have not actually paid them all that I am claiming, so in this case I claim for the full amount, and then pay back the amount outstanding on the account.

 

In short, you don't need to have actually paid the unlawful charges in order to reclaim them. The bank are asking that I do pay back, so I claim it off them, and then use that money.

 

It can sound complicated, and even slightly stupid, but unless the bank writes off the amount owing, there is no other choice (if you discount the option of waiting for the bank to take you to court...).

[crusty git]

Thanks for the support every one I think that lookingforinfo and Jonni are on the right track when they say that most of us are claiming for charges that we have already paid. The point is that I have not paid these charges- that is why Nationwide closed the account.

 

Therefore the "debt" that they sold is not lawful and cannot be colleceed by Nationwide let alone sold to a third party who have even less claim than Nationwide.

 

If Nationwide repay me the charges and I then pay all or some of them to a collection agency I am in effect still paying the charges but to a third party.

 

Surely it is up to Nationwide to recall the account and take the third party out of the loop?

 

Help, my heads hurting again.

[Guest Lueeze]

In affect this debt will either

 

A. be written off by you paying the Agency with the winnings.

 

B. be written off by Nationwide paying off the debt with the winnings.

 

Try not to think too much otherwise you can get too analytical.

 

Oh and take a Anadin Extra, they always work for me!

 

Lou xxxx

[steven4064]

 

In short, you don't need to have actually paid the unlawful charges in order to reclaim them.

 

Sorry to jump into this thread so late in the day. Section 15 A(2) of the Theft (Amendment) Act 1996 defines a 'money transfer' as follows:

 

(2) A money transfer occurs when-

 

(a) a debit is made to one account,

(b) a credit is made to another, and

© the credit results from the debit or the debit results from the credit.

 

Thus, because the bank put a debit on your account and they will have put a corrresponding credit somewhere else (double entry accounting is a wonderful thing), under this definition they have transferred money from your account whether you have 'paid' it or not.

 

Section 15 A says that if such a transfer is by deception (which in these cases it probably is since they claim its a legitimate charge when it is not) then an offence has been committed with a maximum penalty of 10 years' imprisonment. Interesting, huh?

[jonni2bad]

Accounting is not my thing.....

 

Can you explain why there will need to be a 'credit' somewhere else? and where exactly would that be?

 

I'm not saying you are wrong, only that I don't fully understand it!

[Mindzai]

I would guess the credit would appear in whatever system or account the banks use to deposit charges to. When they are debited from your account they must logically be deposited into the bank's coffers somewhere. The money can't just 'disappear' from your account and end up nowhere.

[steven4064]

Mindzai is completely correct. To keep accounts balanced there must always be a corresponding credit for every debit (and vice versa). What it boils down to is that, if the bank have put a debit on your account then, as far as the law is concerned, they have transferred money from your account.

[jonni2bad]

OK, that being the case I will pass these comments onto the rest of the team and see if we can take this anywhere....

 

Well done and thanks.

[jonni2bad]

P.S. So that we don't hijack this thread, I have started a new one just for this issue...

 

http://www.consumeractiongroup.co.uk/forum/legalities/56427-theft-act-15a-there.html

 

Please continue with this issue over there....

[crusty git]

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