confusion over 8 % interest on prelim letter

[claimb]

hi, just wondering about the Lba and prelim letters not asking for the stat 8% interest, as we are not legally entitled to it until we have won court claim .

 

This contradicts what martin lewis has recommended doing on money saving expert, i.e request 8% on prelim & use it as a tool of negotiation(who is right?).

 

The problem being in the unlikely event banks pay up before court claim, we lose out on claiming the 8%(£662 in my case). I thought by requesting 8% from the start you put the banks off settling early, making sure you get the 8% in the end.

 

Can anybody please clarify these points as i know there has been alot of confusion over this. Thanks!

[hedgey06]

s69 8% interest is awarded at the discretion of the courts. Banks do not have to (and will not) pay this at prelim/LBA stage.

 

Personally, I don't think it's a case of 'losing out' if the banks pay up before you file at court. The whole point of reclaiming our charges is just that - to reclaim our charges. If they offer to pay up at prelim/LBA stage, surely this is what we're all hoping for?

 

I can't comment on the recommendations from Martin Lewis's site as I've never visited it. However, in line with CAG, my personal advice would always be to exclude the 8% interest until filing at court.

[claimb]

ok, thanks hedgey!

[Hedgerow]

Hello claimb

 

You know, you could go for the 8% with your prelim & LBA letters, I've done this, I'm sure many other CAGers have done this.

 

I'm waiting for a settlement from Barclays having done just that.

 

It certainly won't do any harm to try!

 

Hedgerow

[essential_mixer]

Hi, I'm glad this is cleared up. I have to ask one question though, on the credit card preliminary letter we ask for the charges back plus the interest charged on the sums which have been taken. I realise now that this is not the 8% on the charges. Is it instead the total in the column 'Interest on penalties' on the advanced credit card charges spreadsheet? If not, what exactly is it?

 

Thanks for any help.

[Hedgerow]

I wish I could help with credit card charges essential mixer but I haven't made a claim on these yet.

 

If you have been sensible enough to keep a hold of all your cc statements, unlike me, then working out your interest shouldn't pose too much of a problem as they will be listed on your statements (I think)

 

You could try looking through some successful credit card claims threads and see how others have prepared their claims.

 

Hedgerow

[hedgey06]

Hello claimb

 

You know, you could go for the 8% with your prelim & LBA letters, I've done this, I'm sure many other CAGers have done this.

 

I'm waiting for a settlement from Barclays having done just that.

 

It certainly won't do any harm to try!

 

Hedgerow

 

Please read the following link for clarification on what stage the 8% interest should be claimed at http://www.consumeractiongroup.co.uk/forum/faqs-please-read-these/25457-guide-reclaiming-bank-charges.html?garpg=4

[Hedgerow]

I agree with what you're saying Hedgey 06, but if claimants are not sure about calculating contractual interest, or they simply do not have the rates applicable to their accounts for the respective periods then going for the standard 8% has got to be better than nothing at all, would'nt you agree?

 

Hedgerow

[kog]

We forget that this whole process is based on the fact a case never actually gets to a judge. The vast majority of cases are settled out of court. Those that make it to the court room are those that have legal issues the bank feel they have a good case to win.

 

Statutory interest is applied by a court, so if 8% is claimed before the court stage, whats the problem. The bank either refuses to pay up, then the case goes to court, in which case you would claim 8%. Well its already been claimed.

 

It make sense to claim 8% interest from the start, as Martin Lewis says, it can be used to negosiate an early settlement.

 

Claiming for contractual interest does seem to be a different case.

[Hedgerow]

It seems that everyone will have their own opinion or belief on this.

 

To my way of thinking, if you're unsure about contractual interest or calculating it accurately, then going for 8% instead and then again when the claim is issued which is a daily additional amount until settlement, it would be crazy not to as you are in effect leaving money on the table, right?

 

Hedgerow

[hedgey06]

Actually, I don't think you're 'leaving money on the table' if you don't include the 8% interest at prelim/LBA stages as the banks simply won't pay this until you file at court. They're under no obligation to do so whatsoever - so it seems pointless including it. It should only be added onto the claim once you file at court........... as only the courts can award it.

[kog]

But why not include the 8% just as a reminder to the bank that if they don't settle out of court then it could cost them more to settle by the court. Its leverage, why not take advatage of it, the banks do when we owe them money!

 

Some may be lucky as I was and get the 8% as well as the charges refunded.

[claimb]

i agree! my view is that the banks have taken money from customers who dont have it (hence why we are overdrawn in the first place!) with a view to making large profits.

 

The least we should be doing is making sure we recieve the 8%. One sure route to this is claiming it from the start and excepting nothing less.

[claimb]

My point in all this was, in my case i did'nt want the bank to pay me only the charges. So i included 8% on prelim & lba to put them off doing this. Holding out for charges plus 8% .

 

On the other hand if one of us needed the money ASAP its a different matter. claiming 8%on the prelim letter may put the bank off settling early???not sure!

 

Besides the banks largly ignore these letters, so what does it matter. Put what you want on them(within reason!)

[kog]

People in their thousands are being ripped off by banks and nothing or very little has been done about it.

 

What bugs me is do the banks have any right at all to go into my account and take out their own charges without my consent. It appears the government have to legislate to allow the Inland revenue the power to take money directly from a persons bank account or wages. But yet the banks because they look after our money seem to have a claim on it when they see fit.

 

 

As for the question of charging banks interest, only a fool wouldn't. If the bank took £100 of you 5 years ago that £100 today is worth less today than it was worth 5 years ago because of inflation.

 

So to accept the £100 today which the bank took 5 years previous is to accept LESS.