Number6 -vs- Lloyds TSB **WON**

[elsinore]

Pete, I have Summary Statement of Evidence which I downloaded from somewhere on here. It seems to be as Zoot described. Could this be what your looking for? Obviously wants amending to suit your case.

 

SUMMARY STATEMENT OF EVIDENCE

The claimant submits that the charges levied to his bank account, as set out in the enclosed schedule, are, notwithstanding the defence of the defendant, default penalty charges imposed because of and relating directly to breaches of contract, both explicit and implied, on the part of the claimant. As a 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.

 

The Defendant contends that the charges levied are legitimate fixed price contractual services, 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.

 

The claimant believes 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.

 

 

The law clearly states that a company cannot profit from a breach and 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. This means that Liquidated damages are charged.

 

This is backed up by case law – Robinson Vs Harman 1848.

 

The law says that the charge for loss or damage must be proportionate to the loss incurred.

 

 

The breaches of contract in this case relate to exceeding overdraft limits, and having insufficient funds available to pay a direct debit or a standing order. On one occasion in June 2006, a direct debit payment was returned due to insufficient funds in my account. The shortfall was only one pound and nineteen pence. I was then penalised for this breach by way of a charge of £35. The claimant holds this charge and indeed every other charge in question, to be punitive in nature, and wholly disproportionate.

 

The law states that a clause is a penalty if it provides for “a payment of money stipulated as in-terrorum of the offending party”. I.e. it is punitive, designed to scare or coerce or it is used as a threat.

 

Lord Dunedin stated in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co 1915:-

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

 

It is also worth noting that the defendant is a multi-national corporation. This term regarding charges was inserted unilaterally in contract. I.e. I had no opportunity to negotiate the clause.

 

Under the Unfair Terms in Consumer Contracts Regulations 1999, Sec 2 Par 1 states that:

“A term that allows a party to unilaterally raise of price or for a price to be determined on delivery is unfair”

The cost of Lloyds charges have increased twice during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage.

 

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;

 

 

(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 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. In correspondence with Lloyds TSB’s ‘Customer Service Recovery’ department in July 2006, Martin Orton, who is manager of said department, stated this in a letter: “As you are aware, I am afraid that it is the case that any items that are returned incur a fee in order that we can recoup our costs”. This was in response to a direct and plain request to justify Lloyds TSB’s charges. Throughout the letter, no mention was ever made of the charges as being the cost of any sort of ‘service’.

 

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

 

Additionally, the claimant believes that it is a high possibility that the terms and conditions of his account contract explicitly describe the fee’s as to be applied in instances of breaching those terms. This is true of the contracts of other customers of Lloyds TSB that the claimant is aware. However, the bank has failed to provide me with a copy of the account contract, despite repeated requests to do so, so unfortunately this cannot be proved. A right of subject access request for this document was submitted to the defendant under the Data Protection Act 1998, on 8th September 2006. The defendant has failed to comply.

 

The claimant also 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 the default charges at the current level were unfair within their interpretation of the UTCCR’s. 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”.

 

Additionally, if these charges are incurred a certain number of times within a given period, i.e. a month, they may be registered as ‘defaults’ on the account holders credit file with credit reference agencies.

 

 

I, the claimant, believe all facts stated in this summery to be true

 

Signed:

 

Dated:

 

 

 

DOCUMENTS ENCLOSED IN SUPPORT OF THIS SUMMARY

• Dunlop Pneumatic Tyre Co Ltd –v- New Garage and Motor Co Ltd

• Lloyds TSB automated Direct Debit ‘return to payer’ letter

• Letter from Martin Orton, Manager of Lloyds ‘Customer Service Recovery’ Dept.

• Transcript of Radio interview with Peter McNamara, Lloyds former head of personal banking, Sept 2004

• House of Commons Early Day Motion, May 2006

• OFT statement, April 2006, section 4.21 – ‘disguised penalties’

• Data Protection Act 1998 Subject Access Request for account contract and information

Elsinore

[elsinore]

Another good letter, Gary.

I'm all for this technique, gradually working them into a situation from which there is no escape. Many of their delaying tactics have already been scotched this way.

Quicker payouts for all!

 

Elsinore

[elsinore]

Truly excellent Pete!

 

Number6 stuffs LTSB and England stuff Austrralia! :D :D

What a day!

 

Elsinore