Banks starting a new tactic of defence?

[spartagates]

We got a letter from Northern Rock today. It's in reply to a standard Data Protection Act request my wife made.

 

"Dear …

 

Re: current account charges.

 

I thank you for your recent Data Protection Act 1998 subject access request relating to your current account.

 

The information you request is, of course, information that has previously been provided to you during the normal operation of your account. You will be aware from Northern Rock plc’s Tariff of Charges (copy enclosed) that a charge of £10 per copy of statement is levied. What you are entitled to, under subject access request, is data in the form that is currently held by Northern Rock plc. If you require the information in a specified format Northern Rock plc are entitled to make a reasonable charge for the work involved in preparing the information in the format requested. As set out above, that charge is currently £10 per copy statement. Northern Rock plc will proceed to provide you with the data you request, within the statutory time frame of 40 days; in the format it holds it in, unless you alter your request.

 

Northern Rock plc refutes any suggestion that the charges applied to your current account are in any way unfair or represent a penalty. Under the Terms and Conditions of your Current Account, a copy of which I enclose, Northern Rock plc provides Current Account services to you and applies charges and interest in return for those services at the rates set out in its charges leaflet that forms part of the Terms and Conditions. When you applied for your Current Account, you signed to say that you had read, understood and agreed to be bound by these Terms and Conditions.

 

The Terms and Conditions envisage that your account may be in one of three states: in credit, an authorised overdraft position; or in an unauthorised overdraft position. The charges and interest rates for providing your Current Account services vary depending on which of the three states your account is in. In moving to a position of unauthorised overdraft your account is still within a position envisaged by the Terms and Conditions. Accordingly, you are not in breach of contract and therefore the issue of damages for breach does not arise. As a matter of law, the courts will only find that a contract term represents a penalty where, on breach of contract, that term provides for a measure of damages that is not considered to represent a genuine pre-estimate of loss.

 

Should you be in any doubt as to the meaning of any of the above, it is strongly recommended that you seek independent legal advice.

 

I hope I have resolved matters fully for you. I have enclosed details of our internal complaints procedure, which explains what you should do if your complaint has not been resolved satisfactorily and identifies the timescales for dealing with complaints. If you remain unhappy please contact me as soon as possible with any queries or concerns.

 

Alternatively, if I do not hear from you within eight weeks from the date of my letter, I will close your complaint for you.

 

Yours sincerely,......"

 

 

 

 

Firstly, they are trying to be very slippery with reference to getting the statements out to us; it should be interesting to see what they do actually send as it is "in the form that they currently hold". Any idea what they may be sends? Got a feeling it's gonna take a bit of decoding!

 

The second part definitely shows they are going down the route of denying it’s a penalty/breach of contract. Bit concerning I thought as it’s a very assertive letter to try and nip a claim in the bud before it even starts! Is this a new route for the banks?

[aaronmcl]

Does this look familiar ?

 

http://www.consumeractiongroup.co.uk/forum/showthread.php?t=12055

[spartagates]

It does indeed (they must have been typing as I was!); however, we have followed the FAQ and used the standard template for the Data Protection Act alone. I can see what a prelim letter is going to hold by their letter though! Very aggressive stance for a bank to take imho.

[aaronmcl]

Reply explaining that you do not want the list of charges in any specific format, that the data in the form that is currently held by Northern Rock plc is sufficient and that the 40 day time limit is still running from the original date.

[paulif]

at least i am not alone in the trenches

 

i look forward to fighting the good fight with you

[spartagates]

Reply explaining that you do not want the list of charges in any specific format, that the data in the form that is currently held by Northern Rock plc is sufficient and that the 40 day time limit is still running from the original date.

 

I think they will be doing this anyway...

 

"Northern Rock plc will proceed to provide you with the data you request, within the statutory time frame of 40 days; in the format it holds it in, unless you alter your request."

 

But they are really trying hard to bombard with facts and legal jargon and thus use intimidationary tactics (usual disclaimer! "which is merely my opinion") to scare people. I've just not seen such an aggressive first contact letter before.

[spartagates]

at least i am not alone in the trenches

 

i look forward to fighting the good fight with you

 

 

Very true I think careful handling of this may be needed; not heard of anyone else trying for charges back from Northern Rock so there maybe a higher chance of them pushing this all the way to ward off other potential claims....

[paulif]

i am more than happy to take them to court over this

i am totally not intimidated

nor do i feel out of my depth

thanks to the most part

because

of this excellent site

[spartagates]

i am more than happy to take them to court over this

i am totally not intimidated

nor do i feel out of my depth

thanks to the most part

because

of this excellent site

 

As am I

[caro]

You say this letter is in response to the standard DPA request, so you made no mention of claiming anything back? As you say it is very aggressive and clearly meant to intimidate and discourage you from claiming back your bank charges. I suggest you just wait for the information, and as long as you get the information you are legally entitled to, just proceed as per the normal route. You are likely to get a few more negative letters before you get your money back, but make sure your parachute account is ready.

[Rooster-UK]

All it means is that the info they supply under a DPA request will not be in the same pretty format as the original statements and there may be some overlap of detail from one sheet to the next. But that said, you shouldn't have any problems in extracting the info you need.

 

As far as the rest of th letter goes, they are under the same constraints as all the other banks, so what they say is meaningless.

 

Just carry on the process according to YOUR OWN timetable and don't let that verbose garbage intimidate you.

 

Good luck with your claim.

[spartagates]

You say this letter is in response to the standard Data Protection Act request, so you made no mention of claiming anything back? As you say it is very aggressive and clearly meant to intimidate and discourage you from claiming back your bank charges. I suggest you just wait for the information, and as long as you get the information you are legally entitled to, just proceed as per the normal route. You are likely to get a few more negative letters before you get your money back, but make sure your parachute account is ready.

 

The standard template does make a passing mention of reclaiming charges...

 

"...if I discover that you have levied disproportionate penalties against me, then I shall be reclaiming them...."

 

Northern Rock appear to have jumped onto that. I have a feeling they may be watching this and other sites and have a well prepared stratergy. I will be sticking to the usual timetables and letters

[caro]

The standard template does make a passing mention of reclaiming charges...

 

"...if I discover that you have levied disproportionate penalties against me, then I shall be reclaiming them...."

 

Northern Rock appear to have jumped onto that. I have a feeling they may be watching this and other sites and have a well prepared stratergy. I will be sticking to the usual timetables and letters

 

My mistake. It's a while since I sent mine so forgot that. The banks are not meant to watch this site without getting express permission, but there is a lot in the media about bank charges at the moment, and of course they are getting a lot of refund requests.

[mechs]

All it means is that the info they supply under a Data Protection Act request will not be in the same pretty format as the original statements and there may be some overlap of detail from one sheet to the next. But that said, you shouldn't have any problems in extracting the info you need.

 

As far as the rest of th letter goes, they are under the same constraints as all the other banks, so what they say is meaningless.

 

Just carry on the process according to YOUR OWN timetable and don't let that verbose garbage intimidate you.

 

Good luck with your claim.

 

I agree and they probably will send it as computer print out rather than statements but they have to

 

© to have communicated to him in an intelligible form-

thats from the data protection act

[lookinforinfo]

Quote=The Terms and Conditions envisage that your account may be in one of three states: in credit, an authorised overdraft position; or in an unauthorised overdraft position. The charges and interest rates for providing your Current Account services vary depending on which of the three states your account is in. In moving to a position of unauthorised overdraft your account is still within a position envisaged by the Terms and Conditions. Accordingly, you are not in breach of contract and therefore the issue of damages for breach does not arise.=Unquote

 

What a bizarre defence. It's like the Police saying that driving in a 30 mph area, you will be in one of three states:driving under 30; driving at 30; or driving over 30.

Fines will depend on which state you are in. Driving at over 30 mph is still within

a position envisaged by the Police and therefore you are not breaking the Law!!

 

Of course it is a breach of contract.

Note to Northern Rock-the clue is in the word "unauthorised".Should you be in any doubt as to the meaning of the word, it is strongly recommended that you seek independent legal advice.

[spartagates]

Quote=The Terms and Conditions envisage that your account may be in one of three states: in credit, an authorised overdraft position; or in an unauthorised overdraft position. The charges and interest rates for providing your Current Account services vary depending on which of the three states your account is in. In moving to a position of unauthorised overdraft your account is still within a position envisaged by the Terms and Conditions. Accordingly, you are not in breach of contract and therefore the issue of damages for breach does not arise.=Unquote

 

What a bizarre defence. It's like the Police saying that driving in a 30 mph area, you will be in one of three states:driving under 30; driving at 30; or driving over 30.

Fines will depend on which state you are in. Driving at over 30 mph is still within

a position envisaged by the Police and therefore you are not breaking the Law!!

 

Of course it is a breach of contract.

Note to Northern Rock-the clue is in the word "unauthorised".Should you be in any doubt as to the meaning of the word, it is strongly recommended that you seek independent legal advice.

 

 

I agree. This was the puzzling part of the letter. On looking at their enclosed guidance leaflet of charges they are VERY careful to refer to them as a charge for a service provided i.e. that they charge you £30 for PROVIDING YOU with the service of an unauthorised overdraft or bouncing a direct debit. Very strange defence indeed, and untested as yet I think. I guess there is always the option to fall back onto the they are unreasonable with reference to the Supply of Goods and Services act 1982; would that be a fair assumption?

[quin1962]

The charges that Northern Rock or any other bank makes are in breach of contract for exceeding an overdraft, and they could only charge for Liquidated Damages (which are what it cost them for your degression) and it is quite simply a penalty charge. If they charged for liquidated damages then they would not be the same because different customers would warrant different amounts of time being spent on a case by case basis. This is set in case law going back to the 1890's.

[SurlyBonds]

I agree. This was the puzzling part of the letter. On looking at their enclosed guidance leaflet of charges they are VERY careful to refer to them as a charge for a service provided i.e. that they charge you £30 for PROVIDING YOU with the service of an unauthorised overdraft or bouncing a direct debit. Very strange defence indeed, and untested as yet I think. I guess there is always the option to fall back onto the they are unreasonable with reference to the Supply of Goods and Services act 1982; would that be a fair assumption?

 

It cannot possibly be a service. A 'service' is 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 comensurable with the service provided.

 

£25-35 pounds for a letter?? yeah right... Maybe if was hand-gilded onto goatskin parchment by Cistertian monks, and calligraphed with a genuine quill, lovingly rolled and wax-sealed with the bank's crest, immersed into a velvet-lined scroll, and sent forth with a legion escort on Caesar's finest steed...

 

Okay I digress... ;-) But, it also says jack in any bank contract about these being called services - they are stated quite clearly in the T&Cs as fees or charges! They cannot now change the terminology to serve their own purpose.

 

They have to give 14 days notice to the client before applying them, thus giving the client time to consider whether they are justified. In most cases they are applied arbitrarily, without notice, so cannot be considered a service, as the application of supplying the service has been a one-sided decision.

 

Under the "reasonableness test" condition of a term, of the Unfair Contract Terms Act 1977:

5. It is for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does.

 

Under the UTCC Regs:

Where the contract stipulates that compensation is payable the compensation must be reasonable and apply to both parties. Compensation sums must only reflect the loss otherwise they will act as a penalty on the defaulter.

i.e. - they have to be agreed between the two parties BEFORE application as just and reasonable, and reflect the ACTUAL loss, or if both parties cannot agree, then the term is NOT enforceable.

When will these banks start reading??!?!? Strewth!

THE END...

[spartagates]

although I agree that this thread relates to an "other institution" I'm not happy with it being moved to this forum as the question was generally related. I feel this may be a tactic that all members need to know about and the more that ppl see this the better.

[caro]

I'm not sure who moved it here Sparta and I can understand where you are coming from. I confess that when I read your original post in the General forum I felt it was in the wrong place. The trouble is all the banks are tackling this from different angles, and coming up with different tactics. There has to be some logical method of keeping the place tidy and navigable.

 

Although the tone of the letter you have had is very aggressive, on closer inspection it does not hold any water and is just empty threats. At the end of the day they have no choice but to supply your information, but are giving you forewarning that they are going to make it as difficult as they can for you to get your bank charges back. You must be prepared for them to be negative with you, but stand your ground and you should win in the end. As I said before, have a parachute account ready, because I wouldn't be at all surprised if they closed your account down afterwards.

 

Hope this helps.

[spartagates]

Finally got the OH's statements through today (40th day after they recieved Data Protection Act request....), now thrying to pull togeter the prelim letter. Given that previuos responses have been "prickly" about what the specifics of the claim is (see post made below......

 

I sent my letter before action to the Northern Rock on March 30th. I received a reply, neatly timed to arrive the day before I had said I would make a claim, basically full of legal waffle about my not having been 'concise in detail', saying that the regime of fees is 'unlawful at common law, statute and recent consumer regulations without identifying the common law,statute and consumer regulations I seek to rely on', and advising me to seek legal advice. Adding near the end 'In the event that proceedings are issued without your having provided a substantive response, Northern Rock plc reserves the right to bring it's letters and your failure to respond to the attention of the court in relation to it's costs.'

I would have posted sooner to ask the advice of those who know more of this than I, but my computer packed up and I only got it back today.

 

 

I thought it may be prudant to nip that line right in the bud. I was thinking of adding this small part to the standard prelim letter....

 

"The specifics of the unlawfullness are this: if the charges are a disproportionate penalty they are invalid under the Unfair (Contracts) Terms Act 1977 s.4 and under the Unfair Terms in Consumer Contracts Regulations 1999. Para.8 and sch.2(1)(e). In the event that the charges are not a penalty then they are unreasonable within the meaning of the Supply of Goods and Services Act 1982 s.15."

 

This is lifted from the claim particulars, and I'm sure not the first time the bank has seen it, but it answers their criticism of little detail of law. Does this sound reasonable?

 

Any thoughts? I want to get the prelim off tomorrow as they are delaying as much as possible so far, I don't want them to have an inch!

[TBeckett100]

i got the same s4itty letter from Northern Rock as well, so I have replied with the claim number. Bring it on Northern Cock.

[caro]

It looks OK but I am not sure how fully they read letters anyway. Put it in if you like, but you could just save it for the moneyclaim. They need to address your criticisms, not the other way round. As you say, they will have seen it before.

[spartagates]

It looks OK but I am not sure how fully they read letters anyway. Put it in if you like, but you could just save it for the moneyclaim. They need to address your criticisms, not the other way round. As you say, they will have seen it before.

 

Shall be interesting to see if they really do read letters (or possibly these forums for that matter) ;o)

[spartagates]

Had a response to the adjusted prelim letter sent a week ago and its quite interesting.......

 

It appears from your letter that you have either failed to grasp or chosen to ignore, the key legal issues in relation to charges for services provided to Northern Rock plc current account holders, as set out in Northern Rocks plc letter dated….

 

In summary:

 

1. charges on current accounts are charges for services and are not default charges, or, put another way, they are not charges that arise due to a breach of contract;

2. in law, for a clause to be deemed a penalty, it has to operate due to a breach of contract;

3. the essence of a current account contract is the provision of current account services by a provider to the current account holder; and,

4. the charges made by the current account provider for those services go directly to the adequacy of the bargain between the current account holder and the current account provider and, as such, are a core term of the contract;

5. Northern Rock plc’s current account charges are, clearly and unambiguously stated at the outset and prior to the conclusion of the agreement between the customer and Northern Rock plc;

6. the combined effect of points 1-5 above is that the current account charges are entirely lawful, they are not an “illegal penalty” and nor are they unfair and unenforceable.

 

As a result, Northern Rock plc is not required and would not be compelled by a court, to disclose the financial breakdown of current account charges being sought by yourself.

 

Further, there can be no suggestion that the charges represent an unfair term under the Unfair Terms in Consumer Contracts Regulation 1999) (“the regulations”). You should be aware that regulation 6(2) sets out that they do not apply to core terms of the contract and nor do they apply to the adequacy of the bargain between the parties to a contract. The charges for services provided under your current account go to the heart of the contract between Northern Rock plc and yourself and, in addition, very clearly go to the adequacy of the bargain between it and you. For these reasons, in accordance with Regulation 6(2), the regulations are not applicable to the charges applied to your current account and those charges are not unfair terms.

 

You make reference to a regime that is “unlawful at common law, statute and recent consumer regulations. Section 4 of the Unfair Contract Terms Act is not applicable in this case as it relates to the reasonableness of contractual obligations on consumers to provide indemnities rather than the straightforward issue of contractual charges for services. Neither do they fall under section 15 of the Supply of Goods and Services Act 1982, as current account charges are clearly stated in the terms and conditions you agreed to prior to entering an agreement with Northern Rock plc. You should also specify with particularity any conduct on the part of Northern Rock plc that you consider has been unlawful or has not complied with UK law. For the avoidance of any confusion, Northern Rock plc has only ever acted as your current account service provider and not in any way as your personal banking service provider or any other position that might arguably be considered to place it in the position of your fiduciary.

 

With regard to the threat of court proceedings, Northern Rock plc looks forward to receiving your substantive response to the legal points raised prior to the issue of any proceedings. For the reasons set out above, Northern Rock plc does not consider that your letters of … disclose reasonable grounds for brining a claim against it, and nor, if such a claim were issued, that it would have any prospect of success.

 

In the event that proceedings are issued without your having provided a substantive response to the legal issues raised, Northern Rock plc reserves the right to bring such failure to respond and the content of its letters to the attention of the court in relation to costs.

 

In light of having to restate the legal position, previously set out in Northern Rock plc’s letter dated… it is strongly recommended that you seek independent legal advice if you are in any way unsure as to the meaning of any of the above.

 

I enclose another copy of our internal complaints procedure if you still remain dissatisfied please contact me and I will ensure your complaint is reviewed further.

 

Bit of help on how to approach this would be appreciated! Do I just stick with standard letters? Do I enter a dialogue with them, expanding on the points raised? Do I stay with the timetable?

 

It's a very intimidating letter imho, attempting to distract and confuse.