Kidson That is a good link though a bit sparse For those who wish to go into this matter in depth it would probably be better to Google for the Consumer Credit Act (1974) and its subsequent amendments particularly on advertising. It does make the point that the %APR is an expression to describe the total cost of borrowing so that for example a start fee and a compulsary API will affect the %APR that lenders can quote. This makes it doubly dangerous to use the %APR to calculate interest rates without full knowledge of the costs included. Rather than complicate matters I avoided this point as it is unusual these days for banks to charge overdraft set up or continuation fees. The only charge usually made for an overdraft is interest and the %APRs that banks use are usually correct. (Last year I caught Amex quoting a lower %APR than they should.) The point is that bank's actual annual rates are in almost every case higher than the %APR and this is deliberate policy becuase people will insist that the interest rate charged is the %APR which it very rarely is. DO NOT USE the %APR in to calculate monthly or daily rates - you will nearly always get a wrong answer and sometimes a very wrong answer.

Tamedus I hope you will not take this amiss but in your last post you are using the term APR rather loosely (apart from saying annual annual percentage rate!) The %APR ( to be semanticlly correct) is a statutory term and it is not the actual annual rate that the banks charge which you so rightly calculate using a compound method. The legislation introduced the term %APR to allow people to compare the rates of different lenders and forced them to use a compound method for interest and then unaccountably allowed them to round the annual rate to one decimal place for the %APR. So when you calculate the actual annual rate to be 15.949999. the %APR will be 15.9% legally. %APR is therefore an approximation and should never be used to calculate daily or monthly rates - you will almost always get a lower answer than the banks charge if you do. Does it matter. Well yes it does. The banks are delighted that the general population have equated the %APR with the rate they actually charge because it means they can get away with a [problem] that nets tham extra interest and allows them to advertise a rate that is lower than they in fact charge. It goes like this. A bank considers 15.9 %APR to be competitive. They then do the compound calculation to get a monthly rate using 15.94999... as the start figure. If they round the result down (some use as many as 4 decimal places for the monthly rate) inevitably on reversing the calculation the actual annual rate will be nearly 15.9499 but can be advertised at 15.9%APR. This costs the average borrower on overdraft only a few pounds extra but nets the bank millions. I hate banks!!! Incidentally I have looked at hundreds of %APRs and monthly rates and I have only found 2 that gave actual annual rate=%APR. So %APR hardly ever equals the annual rate!!

Me again. Sorry I have been thinking I hope constructively about the whole problem of unfiar charges and the interest thereon. This only applies fully to bank interest though for credit cards similar reasoning applies with the proviso that it is even more difficult because of the fiendishly complicated structure of card interest rates. Please correct me if I am wrong particularly over the actual workings of the interest spread sheets. The total of any unfair charges is made up of 1) the actual unfair charge PLUS 2) Interest that has been charged on unfair charges. This interest is in itself an unfair charge so from the date it is added it will be treated as 1) so interest on interest will apply. The total of unfair charges is 1)+2) and this should be the amount of any court claim and will be the amount shown in any preliminary or LBA letter. The claimant has been deprived of the total unfair charge (i.e 1)+2)) claimed and at settlement after court claim has been started is entitled to interest at the statutory rate on each unfair charge from the date each charge is made. One presumes that the rate is a simple interest rate but compounded yearly. Now 2) is very difficult to work out as a) The banks calculate interest an the daily account balance adding the monthly total of interest on one day per month. So a daily calculation is required - very difficult for a busy account.(up to 1560 sums over 6 years). b)The banks use a monthly interest rate *12/365(30.1467) to arrive at a a daily rate. They have to publish this monthly rate but this has not been required of them over the whole six years period. I have found it impossible to get a history of monthly rates from any banks - not surprising as they have been conning their customers (and OFT) with the %APR [problem]. They charge more than the %APR c) different rates are charged for authorised and 'unauthorised' overdrafts and it is difficult to apportion the interest betwwen fair and unfair overdrafts. eg If part of the overdraft is fair it will be charged at unauthorised rates if the unfair charges breech the limit. This has lead to three approaches. a)Vampiress - ignore the unfair interest charges (2) and claim the statutory interest only. The claim will be less than it should be b)This thread . Ignore the unfair interest charges but substitute the contractual rates charged by the banks for the statutory rate and compound this. The claim will certainly be higher but it will not be in any way accurate. Even assuming that a judge will allow this approach I can see the banks conceding the actual charges in court but challenging the statutory interest that can be applied. c) Why not get the banks to take out the unfair charges? The banks clearly have the software to take out unfair chsrges (including unfair interest) - but they will not do this voluntarily. We need that software. There must be a at least one computer programmer in the CAG membership who could write the required program?. The programme would need to have all debits and credits inputted with the actual unfair charges taken out,the ability to calculate any inrterest due and then to calculate, list and and take out any the unfair interest charge each month.

I am puzzled by some of the statements on this thread and I am worried that some of the calculations are incorrect. It has been said that cheap calculaters do not have the precision to do the compound interest calculations Any scientific calculator which nowadays can be bought for less than £20 can do these calculations to the required degree of accuracy. The maths chips used in modern computers which the Excel spreadsheet ineviatably uses are very cheap and all scietific calculators have the same or equivalent chips. I have seen this statement 0.05%= .0005. It is true that the fraction .0005 is a mathematical eqivalent to .05% but it is very important that the % notation is correctly used otherwise there can be muddle. It can easily lead to the nonsense that 0.05% is equal to .0005% which is obviously wrong. In all calculations of compound interest the period interest should be expressed as 1+ rate/100. Thus for 0.05% the period interest is 1+0.05/100=1+.0005. If this is done the error that the rate is 0.0005% will never be made. For instance a) b) and c) below have all appeared in this thread. a) 0.00045% per day compounded daily gives 17.8% annually b) 0.00046% per day compounded daily gives 18.27% annually. c) 0.00047% per day compounded daily gives 18.7% annually. the correct answers are a) 0.16438....% b) 0.16804....% c) 0.17169....% Now if a)0.045% b)0.046% c)0.047% had beeen the rates used which I am sure was what is meant the results given would have been correct. Note that not only are the results different by a factor of 100 but the actual figures are significantly different. There is one other problem. you appear to eqate the %APR (pedantically this is the correct term) with tha annual rate charged. I have not yet seen a lender who actually charges the %APR as an annual rate. This is because the %APR is the annual rate rounded to one decimal place. so 16.438%annual =16.4%APR. The banks get there by a roundabout root. They decide what a competitive %APR is say 15.9%APR. They then add up to .049999... to this %APR. to get an annual rate =15.949% (which is what they actually charge) and work out a monthly rate by the compound (route) method. This is then conveniently rounded often to as many as 3 decimal places so that the resultant monthly rate will give the desired %APR. SO the actual rate of 15.94....% has magically transformed in the minds of the majority of cistomers to an annual rate of 15.9%. This matters paricularly if you are taking ^365 or worse ^2190 to arrive at your answers.

Negotiation! This word has the commonly understood meaning of 'haggling' The bank has made an offer so they have negotiated. Your position is ( or should be) that you will accept nothing but your full claim. You therefore must NOT negotiate. If there were some doubt as to the justice of your full claim there might be a place for negotiation but the banks have shown repeatedly that they have no defence and pay up in full. I feel that the third paragraph in your letter could be put differently otherwise the judge may give the bank time to negotiate further which is not what you want -ony the bank will benefit from that. Perhaps it would be better to leave it out entirely or replace it with a paragraph listing the bank's delaying tactics which will emphasise that a stay will only benefit them.

Rather than just 'settled' would it not be better to write SETTLED IN FULL with or without the capitals!l. After all it would be perfectly possible for a settlement before the hearing to be for a lesser amount than that claimed and this is still a settled claim Any judge might well understand that there had been a negotiated settlement and the point is that there there was no negotiation in the cases you mention in your letter

Two errors I think. Firstly although you have arrived at the annual rate by the correct method i.e monthly compounding you have not rounded your result to one decimal place to arrive at the APR. which is allowed by the legislation and is invariably done by the banks to their advantage. Your APR should read annual rate which is not the APR. There is a small [problem] that all lenders use based on the rounding of the APR.! Secondly you have derived your daily rate by a simple interest method and then somehow have it too low by a factor of 100. 27.5722/365= .075540 not .00075540 as you have it. This daily rate only gives the correct annual rate if the interest is calculated daily but added at the end of the year. If you use your daily rate (/100 !!) and add (and therefore compound as is done by the banks) the interest monthly the calculation is below. Annual rate = ((1+.075540/100*365/12)^(12))-1)*100=31.3376...%=31.3%APR which is clearly not correct. THe correct daily rate if interest is added and therefore compounded monthly is monthly rate /days in the month, For simplicity we have the myth that each month has 365/12=30.1467 days. so the daily rate is 2.05/30.1467=.068...%. Is anbody interested in the [problem]?

LoydsTSB must have known about the test case before they settled with Joa and if they intended to defend the test case they would have applied for a stay themselves. In addition on learning of the test case and if they were confident that they would win they would have applied for stays on every other outstanding case. They have not done this. There are only two possible explanations. 1. They are incompetent - we know that to be true! 2. They do not intend to defend the test case in court and if they do withdraw the stays they have engineered would be shown up as a sham and the publicity would be horrendous. Take your pick. I favour 2 . If I am right it is very important that every possible claim goes in now so that momentum is not lost. My own personal view is that these stays although I sympathise with the claimants concerned are a way that two very wise judges have devised to call the bank's bluff.

I wouln't have a use for a lot of T-shirts! I suppose 'small donation' is relative!!

I have never had to pay a bank charge! But I would like to encourage this site with a small donation. However I hate Paypal almost as much as the banks. For various reasons I was returned to the first page of your donation site at least 5 times and had to start again and then when I did get through to the final page I found I would need to join Paypal in order to donate. No way!! Can I donate in any other way?