Baronstoneybroke v Lloyds : settlement offered

[Spiceskull]

It is all down to interpretation...however, I am sure that you will not find 'overdraft/penalty charges' listed among 'services' in most contracts. Indeed, I have made a DPA request for my original contract so that I can hold the bank to the terms that they refer to...as Dave says, this is a 'cloaked service' which is only applied when certain parameters have been met...

[dinghy]

It is all down to interpretation...however, I am sure that you will not find 'overdraft/penalty charges' listed among 'services' in most contracts. Indeed, I have made a DPA request for my original contract so that I can hold the bank to the terms that they refer to...as Dave says, this is a 'cloaked service' which is only applied when certain parameters have been met...

 

I wouldn't disagree with you at all... Just saying it's a valid attempt at a defence and one that to some extent holds water... Not enough water to put out the bonfire we've set alight under their corporate arses but...:grin:

[Dave J]

Am i right in thinking that for the service to be valid it must have at least adequate (and not reasonable) consideration for both parties. Therefore the bank would have to argue exactly what they have given up in order to NOT pay a cheque or a direct debit. I accept that there is consideration in the event of exceeding a limit because they have effectively given you the benefit of a loan.

[dinghy]

If you are talking consideration in the contractual legal sense then no... The 'service' they are providing is supposedly their consideration...

[Dave J]

But how can that stand up in court. You cannot provide a service by NOT doing something.

[dinghy]

But they are arguing that they are doing something... They are making a decision as to whether to do something or not...

[lee6370]

I've given this a lot of thought, (since i need to return my allocation questionaire) and i think it's better to argue that we are in breach of their terms and conditions, therefore the charge is a penalty and in that case it can't be defended.

 

I, like everyone else has letters from the bank saying I haven't kept to the terms and condiditons, Eric Daniels gave evidence at a select committe were he continually refers to penalty charges, the OFT talks about clocking charges, so all in all forget trying to prove whether the 'service' is reasonable and fair. We need to prove that there was no service, but a breach of contract.

 

any thoughts?

[turbo]

This was the same defence I had. Upon many read throughs I noticed the following:

 

In point 3 they state that if you "go overdrawn without agreement" and they have already stated that is a commercial contract.

 

Well if you do something "without agreement" in a commercial contract does that not constitute a breach of said contract.

 

This they then contradict in point 4.

 

If they insist that it is a service, then I have seen evidence (posted in another thread) that they charge on a business account 30p to action a standing order or direct debit. Therefore the charge to reject such a service to a consumer has seen a 11,600% hike in the fee, which even a Judge would see somehow breaches the sale of goods act.

[Dave J]

I agree with you Lee i would personally stick to the flat denial that it isn't a service route. My only worry being that a lot of people have acknowledged the service argument in their particulars of claim which would give it further credence, at least enough to justify what points of law apply.

[dinghy]

If they insist that it is a service, then I have seen evidence (posted in another thread) that they charge on a business account 30p to action a standing order or direct debit. Therefore the charge to reject such a service to a consumer has seen a 11,600% hike in the fee, which even a Judge would see somehow breaches the sale of goods act.

 

Sorry to be pedantic but think it's the Sale of Goods and Services Act you want to look at...

[dinghy]

I agree with you Lee i would personally stick to the flat denial that it isn't a service route. My only worry being that a lot of people have acknowledged the service argument in their particulars of claim which would give it further credence, at least enough to justify what points of law apply.

 

But there's no reason in court not to argue one particular line but also to have a back up to it...

 

So you argue

1. It was a breach on my part...
   
2. In the alternative service charge is unreasonable...

or something along those lines...

[HD]

Sorry to bring this back to basics but does anyone know if there is a legal definition of what a service is?

[Spiceskull]

Before you argue the 'breach of contract' route, check out the Henry v NatWest thread - I think this is where the bank won!!!

[mario]

Would it be worth putting rbrears points to them as part of the LBA letter.

[rbrears]

Ive just written a long letter to the solicitors acting for a bank I'm suing in reply to their offer to pay me just under half of the amount claimed. They raised the service argument. The points that seem relevant to me are:

 

1. The bank has never referred to a service or a service charge in any of its letters to me or telephone conversations regarding charges in almost 15 years of banking with my bank. I have always been told that they are default charges applied automatically. (Heck some bank staff (including the famous Stuart Higley of NW fame) are still saying this in letters to forum users to this day). The service argument has only arisen now that these disputes have reached the desks of the bank's lawyers. This shows the bank's position for what it is - a means to disguise the penalties as service charges.

 

2. My bank's T&Cs do not set out clearly for any consumer what services might be provided to a consumer where events of default occur. Those terms will therefore be construed in favour of the consumer and not the bank.

 

3. The charge leaflets said to be part of the T&Cs do not describe or label the charges as service charges and again this uncertainty in the T&Cs will be construed in favour of the consumer.

 

4. The charge leaflets make clear that the charges are payable upon the happening of an event of default. The liability to pay the charges arises immediately the default occurs. The charges are not expressed to arise as a result of the provision of a service subsequent to a default, but immediately the existence of the default arises.

 

5. Pragraphs 1.19 and 4.21 of the OFT report on credit card charges. The OFT rationale applies to bank default charges and the bank is seeking to disguise them as service charges. The UTCCRs are concerned with the intention and effect of contract terms - not the mechanics. So it doesn't matter what the banks call the charges. If they look like penalty charges then it is more likely than not that they are.

 

6. The comments made to the treasury commitee by various of the head honchos from the banks.

 

7. The bank will have to give evidence of exactly what service is provided, how, by whom in respect of each and every charge - when we know that the fees are applied automatically and immediately - and we know that some banks have already confirmed that they don't keep any records of any manual interventions.

 

8. The parts of the Banking Code referred to by Spiceskull

 

Don't forget that in the civil court the standard of proof is "more likely than not" - "on the balance of probablities" - so there is room for doubt. Is it more likely that the charges are penalties or service charges? If we can see through it the judges definitely will.

 

I reckon that just about does for the service charge argument

[Spiceskull]

I reckon that just about does for the service charge argument

I must say that in this letter I agree with you fully...it really does sum up the position...good call.

[Dave J]

That is an excellent piece of writing rbrears, for me it is far more justifiable than the service must be reasonable argument.

[Robertxc]

This is an excellent post! Well done everyone for some really insightfull arguments which cut right to the core of the matter.

[elsinore]

If I have to appear in court and if LTSB use the 'Service' defence, then I will have the text of RBREARS letter on the table in front of me. It's a model analysis and summary. Congrats RBREARS.

 

Why not emulate your caring, sharing bank RBREARS? You could copyright the letter and charge us £30 a shot!! It's a service, after all!!

 

Onwards and upwards

 

Elsinore

[dinghy]

This is an excellent post! Well done everyone for some really insightfull arguments which cut right to the core of the matter.

 

Are you a teacher by any chance Robertxc ?

[Robertxc]

Hardly!! I have no qualifications of any sort.

[dinghy]

That is an excellent piece of writing rbrears, for me it is far more justifiable than the service must be reasonable argument.

 

It may be more justifiable however you need to be fully conversant with all the other lines of attack. If you look at the thread Spiceskull refers to you can see the pitfalls of relying on only one line of attack... You need to be prepared incase the court doesn't agree with your contention that it is a penalty charge (Which by definition must be caused by a breach)

[Spiceskull]

I think that we do need to make a multi-pronged attack, and Robert/Rbrears are not suggesting otherwise. The bank's defence is that the charge is for a service - all this thread is dealing with is shooting down that particular defence...

[dinghy]

Hardly!! I have no qualifications of any sort.

 

 

Only I could imagine a comment like that being scrawled across the bottom of a paper in red ink !!!!!

[dinghy]

I think that we do need to make a multi-pronged attack, and Robert/Rbrears are not suggesting otherwise. The bank's defence is that the charge is for a service - all this thread is dealing with is shooting down that particular defence...

 

Which to my mind neccesitates rebutting point 6 ? Which I think Lee also questioned if it may be neccessary...(#10)

 

IMHO you cannot forget the SOGAS argument in "shooting down" this defence