Final stages of Egg CC reclaim – won't send cheque

[bornrich]

I'm at the final stages of securing a refund for charges on my Egg credit card over 6 years. I'm presently in discussion by email with Rosling King Llp solicitors over terms of acceptance of what appears to be no more than a gagging order.

 

A case has been filed at County Court and we are at a stage where time is running out for Egg. Egg are wanting to agree out of court for commercial sensitivity reasons but are dragging their heels. First they wanted another 14 days – I've given then 7. Now we are in a tangle over payment of the refund. Egg wants to pay it into my account. I want a cheque.

 

The issue I have with paying it into my old Egg account is:

a) The account was closed months ago

b) Egg instructed DLC and presumably the account was passed over to them.

c) The penalties I paid over the years were paid with real, hard-earned cash. Now I want payback.

 

My question is: Do I have a right to demand the method of payment?

In anyone's experience, will Egg back down? And what happens if they agree to a cheque, I sign the agreement and then the account is credited instead?

 

And the worst: Should I just accept happy in the knowledge that I won but Egg just reduced the balance on a non-enforceable agreement account?

 

Egg has until 1st September before the court requires a response. I've already taken Lloyds to court over unfair charges and have managed to freeze the account pending the test case resolution. So if I have to go to court I'm not that fazed.

 

Advice much appreciated.

 

Bornrich

 

P.S. I've been a lurker for some time but am taking the fight to the banks and now need specific advice.

[BankFodder]

Stick to your guns and go for max. Why only 6 years? You could claim for everything back to 1995 as unfair charges are money paid under a mistake.

 

If you have the upper hand then you can insist upon payment in any form you want.

 

If you want to frighten the other side then tell them thqt you will be amending your claim so that you ask the court for restitutionary damages - with the 8% interest in the alternative. That may concentrate their minds.

 

However, don't forget that at the end, it is your case and your risk.

 

However, if Egg are already trying to negotiate a settlement then you have probably got them where you want them.

 

If you have charges going back further than 6 years then tell Egg that you are amending your claim to include the missing charges and that you will be seeking restitutionary damages.

 

Frankly, don't bother to bluff them. Carry out your threat exactly.

[bornrich]

Thank you BankFodder. Will keep the forum posted as to the outcome.

 

Once I've done with Egg my next target for reclaiming is MBNA, then RBS and finally my good friends Lloyds TSB...

 

Bornrich

[bornrich]

This is an update.

 

Egg have emailed today with this:

 

Dear [bornrich]

 

Following our telephone conversation yesterday I write to update you regarding your claim against Egg Banking Plc.

 

Our client has credited your account with the sum of £498.68, comprising the total amount claimed in the sum of £453.66 together with the Court Fee paid on the issue of proceedings in the sum of £45. We have informed the Court of this position and we now consider this to be an end to the matter.

 

---END---

 

Obviously this is great news as it's a WIN from Egg BUT I'm not going to see a penny as the (unenforceable) account in question is in arrears by many thousands and will simply be swallowed up.

 

Question: Can Egg do this? Can I do anything more to get a cheque off Egg?

[Mistermind]

 

The issue I have with paying it into my old Egg account is:

a) The account was closed months ago

 

b) Egg instructed DLC and presumably the account was passed over to them.

 

c) The penalties I paid over the years were paid with real, hard-earned cash. Now I want payback.

 

My question is: Do I have a right to demand the method of payment?

In anyone's experience, will Egg back down? And what happens if they agree to a cheque, I sign the agreement and then the account is credited instead?

 

And the worst: Should I just accept happy in the knowledge that I won but Egg just reduced the balance on a non-enforceable agreement account?

 

 

It sounds like you have been dealing with Egg not DLC, and Roslin King solicitors have been acting for Egg not DLC. If so, it sounds like that they have cancelled your card privileges but retained your account on their IT system. Do you still get monthly statements? If your debt has not been sold to a third party, then Egg remains the owner of same. The balance has not been "Charged Off" to zero and sold for a fraction.

 

If so, then I would think it difficult to convince a judge why charges imposed upon the account cannot be wiped from an account still in Egg ownership, and that in refunding the account they are refunding your good self.

 

When a cardholder pays in, the T&C will stipulate that payments will wipe out different categories of outstanding balance in a preset order, because they attract different rates of debit interest. I know for sure that cash advances will be reduced before purchases. Not sure where penalty charges come in this sequence. Your only possible argument could be that your payments demonstrated from past statements to have wiped out your penalty charges, and so no charges remain left on your account available for refund cancellation by Egg.

 

If Egg remains the legal owner it would seem a long shot to try split hairs with the judge. In the past where Egg wanted to "reduce the balance outstanding at the DCA" they were quite upfront about it, and when challenged they caved in, because they realise that no longer having legal ownership of the balance outstanding and with the account dead and sold, Egg will have no way to discharge the legal obligation to refund except by BACS or cheque.

 

Asking for £45 legal expenses refund straight into your hand sounds much more reasonable. Egg never debited your account with £45, so they cannot refund same into the account. This £45 could be an amount you borrowed from elsewhere due to Egg's intransigence. If they do not fancy a court appearance over £45 they can refund you direct.

 

As for the debt unenforceable angle, that opens up another question. If the account agreement is alleged to be null and void from the beginning and the court is urged not to get involved enforcing said agreement, then why is the court asked to get involved in a refund of charges based on a null and void agreement?

[bornrich]

As for the debt unenforceable angle, that opens up another question. If the account agreement is alleged to be null and void from the beginning and the court is urged not to get involved enforcing said agreement, then why is the court asked to get involved in a refund of charges based on a null and void agreement?

 

MisterMind,

 

Interesting reasoning but if Egg pursued this line then, surely, they would be admitting that the account is indeed unenforceable.

 

I've decided to pursue the £45 and will donate it to CAG when I win.

[Mistermind]

Unenforceable Agreement cases in the pipeline, variously estimated at 15,000 to 100,000 are being non-uniformly stayed pending verdicts on carefully selected Test Cases routed for the Commercial Court, and on appeal to the High Court and beyond.

 

The truly future-facing lawyers on both sides will be alive to the question, that in pursuing refund of penalty charges based on the terms of a signed legal agreement, might a claimant be declaring his position de facto that he recognises the agreement to be valid and enforceable?

 

Can an agreement be accepted for being valid in one part,

and a minute later be rejected for being invalid in another part?

 

Can a debt towards a cardholder be enforceable,

but a debt towards the card company be unenforceable?

It remains to be seen.

[bornrich]

Mastermind,

 

Okay, this is interesting. Let's assume that the agreement is unenforceable from inception not just from the moment the claimant discovers that it is through an often long and protracted process of extracting a 'true copy' from the card company. We would therefore have the two scenarios:

 

1) If the claimant makes it known that she/he is aware of the unenforceability of the agreement and then proceeds to claim charges back she/he could do so on the grounds that the agreement was null and void and that all monies – after deduction of sums borrowed from the card company minus the interest the card company applied – should be paid back. The calculations for doing all this would probably tax Einstein for a full ten minutes.

 

2) If the claimant is unaware of the fact that the account is unenforceable then she/he will pursue the claim for refund of charges and the card company will eventually return the charges not because they think it fair but because they wish to continue the status quo of charging the general public over the odds for a simple automated (in most cases) process.

 

There is another scenario.

 

The card company will also be aware of which agreements are enforceable and which aren't. I wouldn't be surprised if all the card companies had done an extensive audit on this. So, if a claimant then pursues a reclaim of charges through the courts, shouldn't the card company inform her/him that they are aware that the agreement is unenforceable and that the claimant could, in fact, go with scenario 1 above.

 

As for this exchange with Rosling King and Egg, I've requested proof that Egg is indeed the owner of the account as I've been communication with DLC for at least 6 months. I've also requested a cheque for the £45 court fees as per your suggestion. And if I'm not satisfied that Egg is still the owner of the account? Let's see what happens first...

[Mistermind]

Please, you misaddressed my cousin, I am merely Mister Mind.

 

Reclaim of penalty charges has been retrospective, as is reclaim of debt owing, so I cannot see how the timing of a cardholder's opinion and intention with or without knowledge comes into it. Whether a linkage and precedent will be accepted by the judge between the two categories of reclaims remains to be seen. I would surmise it would be very unlikely that card companies would ever dream of retrospectively reverse-reclaiming the previously reclaimed and refunded penalty charges, should card agreements ever be ruled as null and void in total, so that the contract-breach penalty charge precedent of Dunlop-v-Garage becomes irrelevant.

 

Conceivably future reclaims of unlawful charges based on an agreement ruled as legally null and void might be impacted -- if the card company cannot reclaim their lendings, can the cardholder reclaim their charges?

 

As I understand it, "unenforceable agreement" denotes a passive insufficiency, not an active exclusion. An "unenforceable agreement" defective in itself can be enforced after a judge in court so rules. A Test Case ruling will bring uniformity and consistency to verdicts.

 

"Unenforceable" is not a condition precluding the opposite for all time, nor would it help to tackle it like a scientic query by poring over the text with magnifying glass and measuring rod. Parliament does not dictate verdicts in court. Nor does the executive branch, not even the Prime Minister. The judges pass the verdicts in court and decide what the courts will enforce.

 

The latest court ruling on OFT-v-banks is that the OFT should be given a say on the level of bank charges, but until the issue is settled in the court of ultimate appeal, there is basically no answer maybe for another two years.

 

Different card agreements are allged to be "unenforceable" for being short of specific express terms. If a Test Case materialised as Cardholder-v-Egg and the verdict came out as legally enforceable then it looks doubtful if Cardholder will have the funds or expertise to appeal all the way. It looks unlikely the OFT will take up the "unenforceable" cudgels for consumers.

 

If Egg with 2 million cards loses the Test Case then with hundreds of £millions if not £billions at stake you would think it extremely improbable for Egg not to appeal all the way to the summit taking years.

 

The OFT-v-banks Test Case have stayed all bank charges reclaim lawsuits since August 2007, possibly until 2011. If a similar 4-year court stay stops debt collection lawsuits, that could bankrupt some credit cards.

Edited September 3, 2009 by Mistermind
typo

[Mistermind]

Good luck with £45 claim.

 

http://www.consumeractiongroup.co.uk/forum/legal-issues/198059-unenforceability-cases-hold-until-33.html#post2405682

 

As far as we know, the Chester test cases are due to be heard in the Commercial Court in London w/c 30 September and the Manchester test cases (which apparently affects some cases from Liverpool County Court) are due to be heard in the Adminstrative Court sitting in Manchester w/c 8 October.