unfair bank charges

Site Subscriber Joined: 11 Feb 2005 Posts: 2929

I threw this togeather for a young soldier who had issues with his bank.
Please feel free to ammend this to suit your own personal detials.

Dear Sir/Madam

Penalty & unfair charges â€“ request for refund for; Mr John Wilde, (insert account detials)

During my time as a customer with yourselves I have been charged on several occasions for being in excess of my overdraft, bouncing cheques and unpaid Direct Debits. I have added the amount up to be Â£2880 from Jun 2002 without adding the interest charges.

I am of the view that your charges represent a penalty and are therefore irrecoverable at common law. In the Scottish case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79.

Your charges do not reflect any actual loss, instead they appear to represent a lucrative profit-making scheme. UK banks have recently given evidence to the House of Commons Treasury Committee on how bank charges are calculated: "The costs are going to pay for all the people we have who pursue debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by taking these total costs and making some assumptions about the volume that is going to come through to arrive at the individual charges" (2nd report, 25 January 2005, paragraph 50).

Accordingly, the charges applied to my account are not a reasonable pre-estimate of the bankâ€™s loss in relation to my account. Your charges would appear to represent a device to recover global losses (for example, loan defaulters, bad debt write off, including commercial lending in, and outwith, the UK).

On a separate note, your charges appear to represent an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). My account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as I am a consumer. Your charges constitute an unfair penalty under reference to paragraph 1(e) of schedule 2 of the said regulations:

â€˜Indicative and non-exhaustive list of terms which may be regarded as unfair - 1. Terms which have the object of effect of - (e) requiring any consumer who fails his obligation to pay a disproportionately high sum in compensationâ€™.

0n 26 July 2005 the OFT stated that 'a charge is likely to be disproportionately high if it is more than a court would be likely to award if the lender sued the cardholder for breach of contract'. Because your charges include a large profit margin, in addition to actual loss, they are irrecoverable as an unfair term in contract. In addition, it is unfair to require me to subsidise your global debt recovery costs and debt write-off.

Additionally you may have entered a default notice against my credit record. If this default occurred merely in respect of unlawful charges levied by you or was the result of my account not having enough money available which was caused directly by the taking by you of penalty charges which you had applied unlawfully to my account then I require that you remove the default entry from the register. Please note that mere correction or amendment to the entry will not be acceptable.

I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

I will give you 14 days to reply to me accepting, unconditionally, my request in principle and letting me know a date by which I will receive payment, the 14 days to start from the date on this letter.

If you do not respond, or you do not respond positively, within this time period, I shall send you a letter prior to action giving you a further 14 days in which to reflect your position. I believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

After that, there will be no further communication from me and I shall issue a claim at the expiry of the second deadline.

Yours faithfully

(your name)

Forum Moderator Joined: 02 Mar 2004 Posts: 19978

thats the game, seems pretty good

Site Subscriber Joined: 11 Feb 2005 Posts: 2929

yea, it worked quite well, he got a response from the bank within a week.

Most people think they will get all their charges back though. which tbh is not the case. for example, if you bank charged you Â£30 to send you a letter, that is disproportionate with the actual cost of writing said letter. thus the court would give you about Â£15 back on that charge as it is plausible that it could cost a bank Â£15 to employ someone to write and send a letter.

likewise if the bank added charges onto your account which intern put you over drawn, then charged you for being overdrawn, you could be entitled to a return of some of the charges.

Itâ€™s a complicated business but if you hunt the web you can find all the info you need to combat the bank yourself. All you need is this letter (or something similar) and a couple of years of bank statements.

Site Subscriber Joined: 05 Apr 2004 Posts: 1141

Doc";p="109443 wrote:

I threw this togeather for a young soldier who had issues with his bank.

You did?

http://www.thesu.com/files/factsheet%20reclaiming%20bank%20charges.doc
http://www.consumeractiongroup.co.uk/forum/barclays-bcard-woolwich-successes/128-my-girlfriend-barclays.html

Good call tho, bank charges are wrong although I've never had any.

Forum Moderator Joined: 02 Mar 2004 Posts: 19978

I have had a lot, even once for 1 pence, I was then told your to poor to take us to court! Couldn't do anything as the were right

Site Subscriber Joined: 11 Feb 2005 Posts: 2929

yes Addie, I stole parts of two letters easily found on the net and put them onto a letter head for the guy. (thats why I threw it togeather not made it)

Chris, if you were to use one of the many companies out there it would cost Â£35 to get the info and have them check it, then it would cost a further Â£75 on completion. Its not "no win no fee" but most people in our situation would get a few hundred if not thousand back from the bank.

Level 5 User Joined: 11 Apr 2006 Posts: 122

that thing really works, tried and tested by many including me Very Happy