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    • further polished WS using above suggestions and also included couple of more modifications highlighted in orange are those ok to include?   Background   1.1  The Defendant received the Parking Charge Notice (PCN) on the 06th of January 2020 following the vehicle being parked at Arla Old Dairy, South Ruislip on the 05th of December 2019.   Unfair PCN   2.1  On 19th December 2023 the Defendant sent the Claimant's solicitors a CPR request.  As shown in Exhibit 1 (pages 7-13) sent by the solicitors the signage displayed in their evidence clearly shows a £60.00 parking charge notice (which will be reduced to £30 if paid within 14 days of issue).  2.2  Yet the PCN sent by the Claimant is for a £100.00 parking charge notice (reduced to £60 if paid within 30 days of issue).   2.3        The Claimant relies on signage to create a contract.  It is unlawful for the Claimant to write that the charge is £60 on their signs and then send demands for £100.    2.4        The unlawful £100 charge is also the basis for the Claimant's Particulars of Claim.  No Locus Standi  3.1  I do not believe a contract with the landowner, that is provided following the defendant’s CPR request, gives MET Parking Services a right to bring claims in their own name. Definition of “Relevant contract” from the Protection of Freedoms Act 2012, Schedule 4,  2 [1] means a contract Including a contract arising only when the vehicle was parked on the relevant land between the driver and a person who is-   (a) the owner or occupier of the land; or   (b) Authorised, under or by virtue of arrangements made by the owner or occupier of the land, to enter into a contract with the driver requiring the payment of parking charges in respect of the parking of the vehicle on the land. According to https://www.legislation.gov.uk/ukpga/2006/46/section/44   For a contract to be valid, it requires a director from each company to sign and then two independent witnesses must confirm those signatures.   3.2  The Defendant requested to see such a contract in the CPR request.  The fact that no contract has been produced with the witness signatures present means the contract has not been validly executed. Therefore, there can be no contract established between MET Parking Services and the motorist. Even if “Parking in Electric Bay” could form a contract (which it cannot), it is immaterial. There is no valid contract.  Illegal Conduct – No Contract Formed   4.1 At the time of writing, the Claimant has failed to provide the following, in response to the CPR request from myself.   4.2        The legal contract between the Claimant and the landowner (which in this case is Standard Life Investments UK) to provide evidence that there is an agreement in place with landowner with the necessary authority to issue parking charge notices and to pursue payment by means of litigation.   4.3 Proof of planning permission granted for signage etc under the Town and country Planning Act 1990. Lack of planning permission is a criminal offence under this Act and no contract can be formed where criminality is involved.   4.4        I also do not believe the claimant possesses these documents.   No Keeper Liability   5.1        The defendant was not the driver at the time and date mentioned in the PCN and the claimant has not established keeper liability under schedule 4 of the PoFA 2012. In this matter, the defendant puts it to the claimant to produce strict proof as to who was driving at the time.   5.2 The claimant in their Notice To Keeper also failed to comply with PoFA 2012 Schedule 4 section 9[2][f] while mentioning “the right to recover from the keeper so much of that parking charge as remains unpaid” where they did not include statement “(if all the applicable conditions under this Schedule are met)”.     5.3         The claimant did not mention parking period, times on the photographs are separate from the PCN and in any case are that arrival and departure times not the parking period since their times include driving to and from the parking space as a minimum and can include extra time to allow pedestrians and other vehicles to pass in front.    Protection of Freedoms Act 2012   The notice must -   (a) specify the vehicle, the relevant land on which it was parked and the period of parking to which the notice relates;  22. In the persuasive judgement K4GF167G - Premier Park Ltd v Mr Mathur - Horsham County Court – 5 January 2024 it was on this very point that the judge dismissed this claim.  5.4  A the PCN does not comply with the Act the Defendant as keeper is not liable.  No Breach of Contract   6.1       No breach of contract occurred because the PCN and contract provided as part of the defendant’s CPR request shows different post code, PCN shows HA4 0EY while contract shows HA4 0FY. According to PCN defendant parked on HA4 0EY which does not appear to be subject to the postcode covered by the contract.  6.2         The entrance sign does not mention anything about there being other terms inside the car park so does not offer a contract which makes it only an offer to treat,  Interest  7.1  It is unreasonable for the Claimant to delay litigation for  Double Recovery   7.2  The claim is littered with made-up charges.  7.3  As noted above, the Claimant's signs state a £60 charge yet their PCN is for £100.  7.4  As well as the £100 parking charge, the Claimant seeks recovery of an additional £70.  This is simply a poor attempt to circumvent the legal costs cap at small claims.  7.5 Since 2019, many County Courts have considered claims in excess of £100 to be an abuse of process leading to them being struck out ab initio. An example, in the Caernarfon Court in VCS v Davies, case No. FTQZ4W28 on 4th September 2019, District Judge Jones-Evans stated “Upon it being recorded that District Judge Jones- Evans has over a very significant period of time warned advocates (...) in many cases of this nature before this court that their claim for £60 is unenforceable in law and is an abuse of process and is nothing more than a poor attempt to go behind the decision of the Supreme Court v Beavis which inter alia decided that a figure of £160 as a global sum claimed in this case would be a penalty and not a genuine pre-estimate of loss and therefore unenforceable in law and if the practice continued, he would treat all cases as a claim for £160 and therefore a penalty and unenforceable in law it is hereby declared (…) the claim is struck out and declared to be wholly without merit and an abuse of process.”  7.6 In Claim Nos. F0DP806M and F0DP201T, District Judge Taylor echoed earlier General Judgment or Orders of District Judge Grand, stating ''It is ordered that the claim is struck out as an abuse of process. The claim contains a substantial charge additional to the parking charge which it is alleged the Defendant contracted to pay. This additional charge is not recoverabl15e under the Protection of Freedoms Act 2012, Schedule 4 nor with reference to the judgment in Parking Eye v Beavis. It is an abuse of process from the Claimant to issue a knowingly inflated claim for an additional sum which it is not entitled to recover. This order has been made by the court of its own initiative without a hearing pursuant to CPR Rule 3.3(4)) of the Civil Procedure Rules 1998...''  7.7 In the persuasive case of G4QZ465V - Excel Parking Services Ltd v Wilkinson – Bradford County Court -2 July 2020 (Exhibit 4) the judge had decided that Excel had won. However, due to Excel adding on the £60 the Judge dismissed the case.  7.8        The addition of costs not previously specified on signage are also in breach of the Consumer Rights Act 2015, Schedule 2, specifically paras 6, 10 and 14.   7.9        It is the Defendant’s position that the Claimant in this case has knowingly submitted inflated costs and thus the entire claim should be similarly struck out in accordance with Civil Procedure Rule 3.3(4).   In Conclusion   8.1        I invite the court to dismiss the claim.  Statement of Truth  I believe that the facts stated in this witness statement are true. I understand that proceedings for contempt of court may be brought against anyone who makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth.   
    • Well the difference is that in all our other cases It was Kev who was trying to entrap the motorist so sticking two fingers up to him and daring him to try court was from a position of strength. In your case, sorry, you made a mistake so you're not in the position of strength.  I've looked on Google Maps and the signs are few & far between as per Kev's MO, but there is an entrance sign saying "Pay & Display" (and you've admitted in writing that you knew you had to pay) and the signs by the payment machines do say "Sea View Car Park" (and you've admitted in writing you paid the wrong car park ... and maybe outed yourself as the driver). Something I missed in my previous post is that the LoC is only for one ticket, not two. Sorry, but it's impossible to definitively advise what to so. Personally I'd probably gamble on Kev being a serial bottler of court and reply with a snotty letter ridiculing the signage (given you mentioned the signage in your appeal) - but it is a gamble.  
    • No! What has happened is that your pix were up-to-date: 5 hours' maximum stay and £100 PCN. The lazy solicitors have sent ancient pictures: 4 hours' maximum stay and £60 PCN. Don't let on!  Let them be hoisted by their own lazy petard in the court hearing (if they don't bottle before).
    • Thanks for all the suggestions so far I will amend original WS and send again for review.  While looking at my post at very beginning when I submitted photos of signs around the car park I noticed that it says 5 hours maximum stay while the signage sent by solicitor shows 4 hours maximum stay but mine is related to electric bay abuse not sure if this can be of any use in WS.
    • Not sure what to make of that or what it means for me, I was just about to head to my kip and it's a bit too late for legalise. When is the "expenditure occured"?  When they start spending money to write to me?  Or is this a bad thing (as "harsh" would imply)? When all is said and done, I do not have two beans to rub together, we rent our home and EVERYTHING of value has been purchased by and is in my wife's name and we are not financially linked in any way.  So at least if I can't escape my fate I can at least know that they will get sweet FA from me anyway   edit:  ah.. Sophia Harrison: Time bar decision tough on claimants WWW.SCOTTISHLEGAL.COM Time bar is a very complex area of law in Scotland relating to the period in which a claim for breach of duty can be pursued. The Scottish government...   This explains it like I am 5.  So, a good thing then because creditors clearly know they have suffered a loss the minute I stop paying them, this is why it is "harsh" (for them, not me)? Am I understanding this correctly?  
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Mortgage Account Charges - A Long one I'm afraid!


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Sorry this is going to be a bit of a long post. Helping my eldest on this one.

Have started trying to get charges back from a mortgage with a subsidiary of a bank. Actual mortgage was redeemed early and had an ERC but the current case is trying to get the calculations correct and charges returned rather than going for the ERC given other experiences including one with this provider even though I cannot see any terms and conditions allowing them to recover legal costs for actions I raise!

First letter was to get the calculation of ERC clarified and a full list of other charges - Letter 1.

=======================================================================

I refer to the Redemption Statement supplied to our solicitors dated xx-xx-xx.

The statement is a bit difficult for me to understand fully and it is probably just me but I cannot get the sums to work. I would appreciate some clarification if you could. There are 2 items on the Redemption Statement where I could do with some help and would appreciate your comments.

1. The Early Repayment Charge is quoted as £xxxx. I would be grateful if you could tell me how you have calculated this.

2. Other Debits totalling £xxxx. Could you please itemise specifically what these other debits are as I cannot find any details anywhere?

Many Thanks. I hope my questions make sense.

=======================================================================

The response was basically:-

 

Thank you for your letter dated xx-xx-xx.

 

The ERC is a penalty for redeeming the mortgage account whilst been on the x.xx% Fixed until xx xxxx 20xx which you were on. The ERC for the above product were worked out at 5% of the total balance outstanding.

 

I have enclosed a copy of the offer, which states the rate at which the erc would be applied upon redemption and all details regarding them.

 

With regards to the miscellaneous debits on the statement I will breakdown below what the amount of £xxxx entails.

 

There followed an itemized list.

=======================================================================

Followed this up with a further letter after reworking the calculations.

 

Thank you for your reply dated xx-xx-xx

With reference to the first point in my letter of xx-xx-xx, I asked how you had calculated the Early Redemption Charge. I guess that wasn’t a specific enough question as the answer you have provided of 5% of the total balance outstanding isn’t really what I was after. Thank you for providing a copy of the offer but this wasn’t necessary as I already had the originals. What I was trying to determine was how you had calculated the total balance outstanding as I couldn’t get to your figure although I think having tried various options I am now somewhere near the answer.

If the Early Redemption Charge equates to £xxxx and if this figure is 5% of the balance then the balance must have been £xxx,xxx. For now, if we ignore the reduction of £xx per day as the mortgage was redeemed prior to the Redemption Date of xx-xx-xx stated on the redemption statement and we just use the figures on your statement.

The total on the redemption statement is £xxx,xxx

Now to get to the balance on which you are claiming the 5% is payable then naturally we need to subtract the Early Redemption Charge itself of £xxxx which leaves £xxx,xxxx which doesn’t match so let’s also remove the £xxx Redemption Admin Fee as obviously this doesn’t form part of the balance and that gives us £xxx,xxx. That is close although I don’t understand the xxp difference!

I now draw your attention to section xx of the offer document and in particular the column headed “The maximum charge you could pay”. You will note that the maximum charge is specifically stated as £xxxx. I am assuming you regard this document as encompassing the terms and conditions of the mortgage and I can see that there could be some confusion between what is stated in the first 2 columns of section xx. I would point out where such terms in a contract are not clear then favour is applied against the drafter of the terms. As such I have set the maximum in the breakdown in my statement as the £xxxx.

Given the breakdown in your reply of the item referenced Other Debits I can only assume that you are including all “charges” in the balance on which you are charging the Early Redemption Charge.

I would draw your attention to the charges you have itemised as “Subsequent redemption statement request”. The covering letters with all redemption statements specifically stated that the redemption statement had been provided free of charge yet you have charged for these. I enclose an example of the letter sent with statement for the charge you have dated as xx-xx-xx which must have been for the statement sent with the letter which was dated xx-xx-xx.

I would be grateful therefore if you would refund the charges you have made for 2 x “Subsequent redemption statement request” totalling £50.

As you have added these to the account balance then an additional 5% of this £50 has been charged on this in the Early Redemption Charge. In order to more accurately calculate a correct Early Redemption Charge I have enclosed a breakdown/statement which includes the reduction of £xx per day for x days and the removal of the £50 charges for “Subsequent redemption statement request”.

I note also the charges of £25 for “unpaid direct debit charge”. In my view this is an unfair penalty which does not reflect your true costs. I am sure you are aware of the interest in this particular subject. I would suggest that your charges in this respect can be regarded as an unfair penalty, although I would be more than happy for you to provide me details of the specific costs incurred on each and every occasion that show the charge is “fair and reasonable”. At this time I do not feel that I need to expand on this as I will merely request you to refund these charges on the basis set out above.

As you have added these to the account balance then an additional 5% of this £50 has been charged on this in the Early Redemption Charge. I would therefore request the return of these charges amounting to £100. The breakdown/statement I have provided also accounts for removal of these charges.

I hope the calculations I have provided are clear. I would be grateful if you would refund the total of £xxx in respect of this account.

I hope that you will be able to deal with this request sympathetically without either of us having to prolong this matter.

 

 

Their response to this was:-

 

I refer to previous your recent letter.

 

The erc on your mortgage were £xxxx based on an outstanding balance of £xxxxxx on xx-xx-xx.

 

The erc are 5% based on the amount repaid or transferred and not on the original balance. This is clearly stated in your mortgage offer.

 

Section xx to which you refer, is a set format which we have to include to comply with the regulations we are set by the Financial Services Authority. The figure is based on the fact that all mortgage payments are made in line with those set at annual review.

 

I can appreciate that the covering letter to the redemption statement issued xx-xx-xx clearly states "you have not been charged for this statement". This appears to be a system error and although you were advise in our letter of xx-xx-xx that any subsequent requests would be subject to a charge, we are prepared to refund the £50 you have been charged as a result of this.

 

We are not however, prepared to waive the failed direct debit charges. These charges were incurred through no fault of the Society. We feel we are fair and justified in charging them and point out that the £25 fee does reflect the true cost to the Society of these failed transactions.

 

We believe that our customers should be treated equally as far as this is practical and so we do not believe that any individual should be subsidised by others. We do not believe therefore that it would be right to waive any of the financial conditions of your loan, as it would be providing a favourable treatment at the expense of others.

 

I am therefore prepared to offer you £xx.xx in full and final settlement. The figure is a refund of £50 for the subsequent redemption figures and £xx.xx early repayment charge refund, based on 5% of a balance of £xxxxxx on redemption.

 

I realise this may not be the reply you were hoping for but I hope that it explains our position in trying to protect the interests of all our customers.

 

I believe that we have been fair and reasonable in dealing with your concerns. However, we are obliged to tell you that ultimately you may refer your complaint to the Financial Ombudsman Service if you remain dissatisfied. Please come back to me if you feel that we haven't resolved this for you but if I don't hear anything within 8 weeks, I will assume there are no further issues and close your file.

 

 

Proposed response is :-

 

Thank you for your reply dated xx-xx-xx .

I can understand the concept of a set format of Section 10 of your offer document to comply with FSA regulations; however my point is that the section clearly states “The maximum charge you could pay” and specifies a specific amount below. This heading is in bold print and therefore has some emphasis. No where in the offer document does it make reference to the phrase you have used stating “all mortgage payments are made in line with those set at annual review”. The charge is also clearly calculated on the principal of the loan in the offer document. In terms of a contract term this is clearly a confusing item as you and I have differing views of the interpretation. Mine are solely based on what is specified in Section 10 whilst you are clearly applying additional connotations as indicated by your reference to the phrase “all mortgage payments are made in line with those set at annual review”, a statement that does not appear in any contractual terms as far as I can determine.

In my letter of xx-xx-xx I mentioned that “where such terms in a contract are not clear then favour is applied against the drafter of the terms”. I refer of course to The Unfair Terms in Consumer Contracts Regulations 1999 as amended by Statutory Instrument 1999 No. 2083 Section 7(2) which states “If there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail but this rule shall not apply in proceedings brought under regulation 12”. For the avoidance of doubt regulation 12 does not apply in this case as any proceedings would not be in relation to injunctions preventing continued use of unfair terms.

I do not dispute that failed direct debits were not the fault of the Society. As per my previous letter I suggested that your charges in respect of failed payments can be regarded as an unfair penalty and said that I would be more than happy for you to provide me with details of the specific costs incurred on each and every occasion that show the charge is “fair and reasonable”.

You have failed to provide any details other than your statement that £25 does reflect the true cost. Frankly I cannot see how it costs £25 to send an automatic computer generated letter. If anyone actually looked at the account to make a decision on whether to charge or to make a decision to send a standard letter then that decision process cannot possibly have taken more than a few minutes. The letters were clearly not even signed by hand! If as you state, these charges reflect the true costs to yourselves, then you will have no problem in justifying the detail of how you arrive at a figure of £25. Without such detail I can only assume that they are an unfair penalty. In order to help you track down the information that you would require to satisfy my request I could suggest that as part of Yorkshire Bank you may wish to consult the system known internally to the Bank as “CYNthesys” which details the costs of any activity within the bank. Whilst not specifically dealing with the activities of the Accord subsidiary you will no doubt be able to draw reasonable comparisons or you may indeed have a more specific version for your own operations.

I have some empathy with your suggestion that your customers should be treated equally and should not be subsidised by others. I would counter suggest that I should not subsidise other costs or contributions to profits by being charged an excessive penalty. I would be quite happy to be charged a fair fee for the work involved in dealing with the failed payments as I am sure would all other customers. All I ask is that you show that the fee you are charging in these circumstances is fair.

I would again draw your attention to the Unfair Terms in Consumer Regulations 1999 and in particular Regulation 5 as I am a consumer. It is my view that your charges constitute an unfair penalty as described in paragraph 1(e) of schedule 2 of the said regulations:

I would further draw your attention to the precedent set in the case of Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd [1915] AC 79 and also in Murray v. Leisureplay [2005] EWCA Civ 963 which are just 2 examples. In essence the conclusion is that penalty charges are irrecoverable at common law.

The clearest statement is that by Lord Dunedin in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor co Ltd [1915] AC 79 where it was held that a contractual party can only recover damages for an actual loss or liquidated losses. It is clear that your charges in respect of failed direct debits do not reflect any actual and or real loss.

I had hoped that given the relatively modest amount of £xxx that I asked you to return that this matter could be dealt with swiftly without any admission of fault and without need to protract correspondence or spending disproportionate time and resource to resolve this.

I would be grateful if you would reconsider this matter and that we can then put it to rest.

Yours faithfully,

 

 

If you have got this far then thanks for your perseverance.

Any thoughts gratefully received before we send off this last letter. Interesting that the first response we had stated specifically that the ERC was a penalty for redeeming early! Maybe one for another day.

S

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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Thanks zootscoot. Your valued opinion is appreciated. Will get it off this coming week.

 

S

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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Thank you for your letter dated xx-xx-xx.

 

The ERC is a penalty for redeeming the mortgage account whilst been on the x.xx% Fixed until xx xxxx 20xx which you were on. The ERC for the above product were worked out at 5% of the total balance outstanding.

 

I have enclosed a copy of the offer, which states the rate at which the erc would be applied upon redemption and all details regarding them.

 

Am I missing something here? The bank has admitted this charge is a penalty!!

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No you're not missing anything. That's exactly what it said.

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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Hi Half ax I,

Great letter and Good Luck!

 

Do you mind if I use the penultimate paragraph in my LBA - the one about modest amount etc.

http://www.consumeractiongroup.co.uk/forum/mortgage-companies/80636-elliejay39vfuture-mortgages-penalty-charges.html

 

(would have used one of those new fangled link/ping/ref back thingies but couldn't work it out!):confused:

 

Ellie

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Hi Half ax I,

 

(would have used one of those new fangled link/ping/ref back thingies but couldn't work it out!):confused:

 

Ellie

 

Feel free - I don't know what one those new thingies are let alone how to use one.

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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  • 4 weeks later...

The reply – My changes/comments in italics!

 

I would firstly wish to point out that Mortgage Company is not a subsidiary of, or indeed in any way connected with, Yorkshire Bank. Mortgage Company is a subsidiary of a different company. Furthermore the Society does not use the CYNthesys costing model. OK my error!

 

Turning to the other specific points you have raised in connection with the Unfair Terms in Consumer Regulation 1999 and other legal precedents, I would comment as follows:

 

In Dunlop Pneumatic Tyre Co Ltd v New Garage & New Motor (1915) AC 79, a charge in relation to a breach of contract is deemed a 'penalty' and, therefore, unenforceable if it is 'for an extravagant and unconscienable [sic] amount in comparison with the greatest loss that could conceivably be proved to have followed the breach'.

 

You will note from the overview provided below that Mortgage Company's charge of £25 cannot reasonably be considered either 'extravagant' or 'unconscienable' [sic] in this context. The charge levied by Mortgage Company is intended to be compensation for Mortgage Company and not a threat to deter breach.

 

Furthermore you are probably aware that Mortgage Company's charge is in fact cheaper than a number of other lenders who are currently charging between £30-£35 for similar services.

 

In Murray v Leisureplay plc (2005) EWCA Civ 963, the Court recognised the difficulty in estimating the amount of genuine compensation and acknowledged that it had to give a degree of leeway and would only strike out a term if it was truly excessive. In other words, there is no requirement that the charge must exactly reflect the firm's costs.

 

The Unfair Terms in Consumer Contracts Regulations 1999 refers to a disproportionate penalty being invalid. The term, in order to be considered unfair must, contrary to the requirement of 'good faith', cause a 'significant imbalance' in the parties' rights and obligations under the contract, to the consumer's detriment.

 

'Good faith' is a requirement of 'fair and open dealing'. Fairness refers to the substance of the contract and requires the supplier not to take advantage of a customer's necessity, lack of experience, weak bargaining position etc. Openness requires the term to be expressed fully, clearly and legibly, containing no concealed pitfalls or traps, with appropriate prominence being given to terms that might disadvantage the customer.

 

Our charge provision is expressed clearly, legibly and transparently. The charge is referred to in our Mortgage Tariff, a copy of which is provided to customers with the mortgage offer and annually thereafter with the annual mortgage statement. Additionally, all borrowers are informed of the fee immediately following the first missed direct debit collection which is not charged for.

 

Finally, with over 120 mortgage lenders in the market, we believe that any prospective customer is in a strong position to shop around and consider all likely charges in the context of the overall pricing of the mortgage offering; particularly if they considered the level of all charges as an important aspect of the deal.

 

In considering 'significant imbalance' Mortgage Company believes it is important to examine the circumstances at the time of the contract. In this context market practice is relevant and I would refer you to my comments above regarding the level of fees adopted by other lenders.

 

Mortgage Company firmly believes that it is appropriate for defaulters to pay when in default, rather than spreading the burden of the cost to include the majority of customers who do not default. We therefore uphold the view that whilst there is some financial detriment for a defaulting customer, it is not significantly detrimental given the need to balance the interests of all customers, including those that do not default.

 

In conclusion, taking all the circumstances at the time of the contract (including other providers' charges and rights of non-defaulters) it is our opinion that the charge is levied in good faith and does not cause a significant imbalance in the rights and duties of the parties to the consumer's detriment.

 

 

By way of further background, I detail below the broad assumptions used in assessing the level of fee charged.

 

In determining a reasonable fee level, Mortgage Company has attempted to calculate the total costs incurred in undertaking and supporting the task. This means that:

 

• There has been a genuine estimate of the total number of expected instances which would give rise to the fee and the work supporting this. For unpaid direct debits, this means the number of failed direct debits anticipated in a calendar year, projected forward with appropriate adjustments based on a reasonable set of assumptions.

• Total costs are divided equally between the numbers anticipated. In other words there has been no attempt to try and personalise the charge to individual borrowers or types of borrowers. However, in determining total costs, consideration has to be given to the costs of all relevant services which may be encountered. For example, all borrowers will have received a prior warning that subsequent unpaid collections will attract a fee. In some instances borrowers will contact the Society over the phone to discuss the unpaid item, others will write in. Either of these could, and often do, result in an amendment to future collection dates or the setting up of an arrangement to collect the payment again.

• Numbers have been be rounded up to allow for a reasonable element of inflation and to ensure fees remain reasonably stable over a period of time

 

Finally, in determining the level of cost, all external costs, staff processing costs and a proportionate element of general overheads have been taken into account.

 

 

High level breakdown of costs:

 

Total staffing resource (FTE) involved, based on the timings of specifically related tasks and volumes recorded:

• Failure related activity in Lending Services

• Telephone support activity in Lending Services

• Telephone support activity in MCC

• Financial control/banking

• IS admin support/post room activity

• Team leader & management support 2 FTE

 

In addition, the following overhead costs of operating the business require to be apportioned across this activity. These include:

Head Office

rent payable insurance

rates payable metered utilities

Computer overheads

purchase / lease / maintenance

Business Support functions Facilities

Human Resources Information Systems

Treasury, Risk, Audit and Legal Network services

Directors & General Management costs External Auditors

- VAT

- repairs and maintenance

- shared services / restaurant

- cleaning

- Health & Safety

 

Overhead costs apportioned on an individual basis (in addition to actual salary and other related benefits received by the staff members involved) equate to approx £25,000 per head.

 

Other costs

Stationery

Postage

BACS charges associated with representations

 

In 2005 the Group processed approx 5,000 unpaid direct debits where a fee was levied.

 

Unfortunately Mortgage Company can not agree to refund the charges as you have requested and I hope my letter clarifies why Mortgage Company have come to this decision, however our previous offer of £x remains open to you should you wish to accept it. I am obliged to inform you that you do have the right to ask the Financial Ombudsman Service to look into it and this letter will confirm that we have reviewed your case. You will find enclosed a booklet setting out the Ombudsman's procedure, which I hope will be useful. You will see for instance, that you will need to approach the Ombudsman within 6 months of the date of this letter.

 

Yours sincerely

 

 

A named person

A specific position

So I guess the next step is the FOS and if their “free” cases are used up they will be charged a case fee of £360 which is more than the total I asked for. Where’s the commercial sense in that?

Any comments my CAG friends?

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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They seem to be going down the sme route and Swift are with me, in the fact they are saying their costs are not excessive.

 

I am at the point with Swift that the Judge at the last hearing agreed that the charges were not a penalty. However he then suggested looking at the contract again, especially the clauses where it stated the borower would be charged a "reaonable" amount and the he sugested was the amount charged "reasonable". He then gave a clear idea of what he thought would be a "reasonable" charge for a letter (lot less than actual as it stands!)

So I would suggest having a further look at the clauses and the word reasonable as i think this is the way it will be going. I would shape your claim around this word if it appears in the contract, when you take it to FOS.

My hearings are now with a commercial judge who is more knowledgeable (allegedly) than a district in matters concerning business and contracts, so I feel he has given me a lifeline and so, i took his comments about the "penal" side of charges seriously.

  • Haha 1

 

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mrsfoot

Thanks - I'll take another read of the t&c's and see what it specifically says about the charges bit.

 

S

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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  • 3 weeks later...

Latest update - Fairly obvious that they didn't want to play ball so have eventually decided to exercise the right they suggested and have sent off details to Financial Ombudsman Service.

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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"Overhead costs apportioned on an individual basis (in addition to actual salary and other related benefits received by the staff members involved) equate to approx £25,000 per head. "

 

Aye right, Hmm wonder if this is what they actually report as being their costs.

If this is in addition to salary, how the hell do they make any money at all. I assume they do

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2 x FTE equivalent apportioned must equate to a max of £50k plus the overhead of £25k per head (ie x 2) totals £100k divided by 5000 failed DD's equals £20 per time. OFT reckons £12 should be all it costs and some bank seemed to have proved to them £16 is OK. Must make this lot quite inefficient by comparison.

 

2 x FTE at say 45 weeks and a 7 hour working day suggest it takes about 45 minutes to deal with each payment failure. I bet that could be reduced through efficiencies to 10 minutes, but that would mean they wouldn't be able to justify the penalty!

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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  • 4 months later...

FOS are really bogged down it seems. They keep sending a we are busy and we'll update you in another four weeks.

_______________________________________________________________________________________________________

IANAL - Opinions offered are just my personal views and are not guaranteed to be correct. I have been known to be wrong (once or twice).

Claims in progress against:

Eldest - First Direct - Part Offer received - http://www.consumeractiongroup.co.uk/forum/first-direct/79619-eldest-fd.html

Eldest - Halifax - Cheque Received Full amount - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/66254-here-we-go-eldest.html

Youngest - Halifax x 3 - Request for refund sent - http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/79617-youngest-halifax.html

Eldest - unnamed Mortgage Provider for Charges and incorrect maths.

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