I put my moneyclaim in last night, having finally scraped together enough money for the court fee. *fingers crossed*

Thanks, Seminole. I'm going to send the letter off tomorrow. Before I started all this, I couldn't have afforded the court costs. But now I've recovered a fair sum in bank charges, I'm prepared to use some of it to test the ERC principle if I have to. But I'm guessing Paragon won't let this go all the way in court, in the same way the banks won't. They don't want to set a precedent. I can only try to get the ERC back, and I'm going to. I may well have to come back here for help with the Moneyclaim form, but let's see what they have to say in response to the LBA.

Thanks for the info Dolly, that's really helpful.

There is a lot I could say in response to Paragon's letter. For example, how do they differentiate between penalty charges, and early repayment penalties? I don't believe the law actually does so at all. And they helpfully say in their letter that the ERC is designed to reflect the additional costs incurred when a loan is repaid early! How does that equate to 6 months interest! But I don't want to get anything wrong and mess up my chances of recovering the money, so I'm simply going to say: Thank you for your letter of 25 July. I am very disappointed that you have failed to respond adequately to my letter of 19 July 2006. I accept your offer of £120 in partial settlement of the amount I am claiming, but you have declined to refund the sum of £1,313.70 representing the early repayment penalty you charged when I repaid the loan in January 2005. I require repayment in full of this money. The early repayment penalty is unlawful at Common Law, Statute and under recent Consumer regulations. I would draw your attention to the terms of the contract which you agreed to at the time that I opened my account, and of which you have helpfully sent me a copy. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law. I am frankly shocked that you have operated my account in this way as I had always reposed confidence in your integrity and expertise as my fiduciary. I require repayment in the sum of £1,313.70. If you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest plus my costs and without further notice. This is pretty much the standard LBA from the library. Does anyone think I should raise any additional points in this letter? I am fairly convinced I'll have to start a moneyclaim to get this settled, so I'd like to send the LBA off asap and start the 14 days running. Thanks!

I thought it would be more useful if I posted Paragon's response to my initial letter here. So here it is: Further to my recent correspondence, I have carried out a full review of your account and the issues raised in your letter dated 19 July 2006. I note that you are requesting a refund of £120 in charges applied to your account together with a refund of £1,433.70, comprising the charge for early settlement of your loan and representing six months' interest at the time of settlement. My response will address the two types of charges separately as they cannot be considered as one. I appreciate that there has been much recent media coverage regarding bank charges and that it has been inferred they do not reflect the actual loss incurred by the company. This coverage specifically tends to refer to charges for non normal account intervention, such as telephone calls and letter fees for arrears customers, transactions not necessarily itemised within a Credit Agreement. Paragon has every confidence in the propriety of its fee charging arrangements and these are detailed within the General Fees Tariff sent to you at the time your loan completed. These "intervention" charges are incurred when a customer breaches the loan contract and should not be confused with charges incurred by the lender when the customer voluntarily elects to repay the loan early. The second refund of charges you request falls into this category. The "fairness" provisions cited by you in your letter apply to the former only, rather than the latter, and are designed to prevent the lender recovering a disproportionate amount on breach of contract. In applying the second charge we refer to, we believe we have acted properly. This charges reflects the additional costs incurred by us in you electing to repay your loan early. I enclose a copy of your signed Credit Agreement for your information. By signing this Credit Agreement you acknowledged to Paragon that you had read and understood the Terms and Conditions on the reverse. I refer to Section 5.1 which explains that if early settlement occurs within the first five years of your loan then you will pan an additional amount equivalent to six months' interest calculated on the balance outstanding. Notwithstanding the above, and purely as a gesture of goodwill, I have arranged to refund the £20 charges, and this will be sent to you under separate cover. I trust that my response explains Paragon's position, however please do not hesitate to contact me if you wish to discuss this matter further. I will post my intended reply in the next comment.

It's a bit long, so I'll have to scan it, but I will certainly do so and e-mail it to you.

Woot! I've had the remaining £206 of my original claim agreed - with no admission of liability of course. Apparently I should have a cheque within 10 days. Once that is in the bank I'm going to send a polite letter detailing the remaining charges, and asking that they be treated in the same way. It's a bit cheeky, but it can't hurt to try.

I did have to fiddle around a bit with the wording of the letters, but the principle is the same. The Early Redemption charge exceeds the actual cost to the company of terminating the loan early. Someone helpfully pointed out that we should not confuse loss of profits with actual cost. Warning: I did get a long convoluted letter from Paragon declining the ERC claim (but agreeing my account charges yay!). I'm just ignoring it

Following my preliminary letter and LBA, all I'd received from the Co-Op was a small pile of holding letters. I called them today, as a last resort before going to the small claims court. Apparently my claim has been agreed in full and there's a cheque in the post! They've even found some charges on my account that I'd missed, and included those in the settlement! I'm dead impressed with this treatment. Now why can't Nationwide be so... co-operative?

Go Tobes! I'm going to be following in your footsteps if Nationwide try to close my account, so I'm watching your thread with great interest. Keep up the good work!

Well, that was quick! My cheque for £270 turned up this morning This is good, but not good enough. I will have to call them next week now (off on a walking holiday tomorrow) but I do have a question, if anyone can help. I've now found that I missed a few of the more recent charges from my schedule and totals - bad me, I hadn't filed my statements. I guess I should mention these when I call them, as I know I should just include them in my moneyclaim if I have to go that far. But is this likely to jeopardise my chances of getting a 100% payment before filing papers with the court?

Well, I've had a long and involved letter full of bumf from Paragon. They've agreed to refund my account charges (£120) but are not budging on the early repayment penalty. Never mind; the process goes on...

Hmpf. I've received a letter today (when I was due to issue Moneyclaim but didn't have time to do it) with lots of bumf about contractual terms etc. and a promise of £270 (vs my £471 claim) in final settlement. I knew this was coming, as I'd spoken to Gareth on Monday but he couldn't tell me exactly what the offer was. I'm going to call them tomorrow and give them one more chance to agree the amount in full. Otherwise I suppose I'm off to court.

Hi there Susan. It's very good to know that there's somebody in the same boat. I have had absolutely zero result from Paragon - not even an acknowledgement so far. I will stick to my schedule with LBA etc. but always expected to have to take this one to court. Best of luck to you, and if you need some moral support I am here. It sounds as if you know what you're doing (i.e. ignore the solicitor and proceed with the claim) and there is plenty of help on the forums with the court documents. Let me know how you get on; do you have your own thread? If so I could subscribe to that, which would save you having to post twice. ladymoonray

Thanks, that would be great. *fingers crossed for both of us*

Thanks for that Sterile. I'm not too worried about my MBNA account, as I managed to pay it off last year. The account is closed, so they'll have to send me a cheque. Fingers crossed...

I've been watching some consumer debt programmes recently, and Kensington don't come out well in any of them. I really regret remortgaging with them now, and it sounds as if they treated you really badly. I'm just waiting for my early repayment penalty period to be up (or maybe just for it to be declared unlawful) and then I'm going to get some proper advice and switch to a different company. In the meantime, I'm going after Kensington for some penalty charges they made on missed payments. I haven't left Kensington yet, so I can't claim against them for an early redemption penalty. But I'd say definitely go for it! I expect you'll have to take them to court, they're not very co-operative generally, but hopefully it'll be worth it in the end. I'm rooting for you anyway! Don't forget to add on any penalty charges they made on your account as you fell behind with the payments. ladymoonray Nationwide: £2443. Request for payment 4 July 2006. LBA 19 July 2006 Co-operative Bank Visa: £351. Request for payment 22 June, LBA 6 July 2006 MBNA Visa: £476. Request for payment 22 June, LBA 6 July 2006 AA Account with Capital Bank: £80. Request for payment 19 July 2006 Capital One Visa: £160. Request for payment 19 July 2006 Paragon Personal Finance: £120 fees plus £1313.70 early redemption penalty. Request for payment 19 July 2006 Kensington Mortgages: £95. Request for payment 19 July 2006

That's a good point. Thanks surreyscouse!

I'm getting a bit nervous about MBNA. I sent my LBA on 6 July, and still nothing bar an acknowledgement. I know I'm probably being impatient, but I really need somebody to pay up to give me the funds to issue moneyclaims against the others! Anyway, thanks for all the help on this forum. It's been a great confidence booster. ladymoonray Nationwide: £2443. Request for payment 4 July 2006. LBA 19 July 2006 Co-operative Bank Visa: £351. Request for payment 22 June, LBA 6 July 2006 MBNA Visa: £476. Request for payment 22 June, LBA 6 July 2006 AA Account with Capital Bank: £80. Request for payment 19 July 2006 Capital One Visa: £160. Request for payment 19 July 2006 Paragon Personal Finance: £120 fees plus £1313.70 early redemption penalty. Request for payment 19 July 2006 Kensington Mortgages: £95. Request for payment 19 July 2006

Oh well, in for a penny, in for a pound. I'm going to have a go at getting back the admin fees (£120) and early redemption penalty (£1,313.70) on my previous remortgage with Paragon. I'm sending the preliminary request for payment off today. Wish me luck everyone, I'm a bit less convinced I'm going to succeed here than against my bank and credit card companies! ladymoonray Nationwide: £2443. Request for payment 4 July 2006. LBA 19 July 2006 Co-operative Bank Visa: £351. Request for payment 22 June, LBA 6 July 2006 MBNA Visa: £476. Request for payment 22 June, LBA 6 July 2006 AA Account with Capital Bank: £80. Request for payment 19 July 2006 Capital One Visa: £160. Request for payment 19 July 2006 Paragon Personal Finance: £120 fees plus £1313.70 early redemption penalty. Request for payment 19 July 2006 Kensington Mortgages: £95. Request for payment 19 July 2006

Hi everybody. I wasn't going to go after Capital One, because I was worried about them taking my credit card away if I managed to get a refund of my charges out of them. Theirs is the only credit card I can get with my dreadful credit score, and I badly need to keep operating and paying it off so I can rebuild my record. I also mistakenly assumed that I hadn't incurred many charges. But I just looked at my on-line statements, and I find that they've charged me at least £80 since February [edit: the total is £160]. So I think I will ask them to refund me anyway. I've seen on another of the forums that some card companies do not try to withdraw people's cards after settling, though they might refuse further lending and ask you to pay off the balance as normal. I could deal with that, especially as I got a small pay rise today (yay!). Has anyone had experience with what Capital One do with your card once they've paid up? thanks ladymoonray Nationwide: £2443. Request for payment 4 July 2006. LBA 19 July 2006 Co-operative Bank Visa: £351. Request for payment 22 June, LBA 6 July 2006 MBNA Visa: £476. Request for payment 22 June, LBA 6 July 2006 AA Account with Capital Bank: £80. Request for payment 19 July 2006 Capital One Visa: £160. Request for payment 19 July 2006 Paragon Personal Finance: £120 fees plus £1313.70 early redemption penalty. Request for payment 19 July 2006 Kensington Mortgages: £95. Request for payment 19 July 2006

Well, I've had no response to my request for payment. So my LBA will be going tomorrow. I've included the note that Bankfodder suggested, about the FSA position on closing accounts. It's on a separate sheet, but I've put the following paragraph at the end of the standard letter: Please also take note of the attached quote from a recent FSA briefing on account closures and default charges. As I mentioned in my letter of 3 July, I do not want my account with Nationwide to be closed as a result of my challenging the unlawful charges you have been making. If you do attempt to close my account following resolution of this matter, I am prepared to apply for an injunction to prevent you from doing so, and to take whatever other action is necessary to retain my account with Nationwide. I do realise that I'm risking upsetting them enough to make them fight my claim further than they might have done otherwise, but Nationwide are being so awkward anyway that I'm prepared to risk it. I hope they take it at least as far as making me issue a moneyclaim (which it seems likely they will), I could really do with the extra £550 interest! ladymoonray Nationwide: £2443. Request for payment 4 July 2006. LBA 19 July 2006 Co-operative Bank Visa: £351. Request for payment 22 June, LBA 6 July 2006 MBNA Visa: £476. Request for payment 22 June, LBA 6 July 2006 AA Account with Capital Bank: £80. Request for payment 19 July 2006 Capital One Visa: £160. Request for payment 19 July 2006 Paragon Personal Finance: £120 fees plus £1313.70 early redemption penalty. Request for payment 19 July 2006 Kensington Mortgages: £95. Request for payment 19 July 2006

CONGRATULATIONS! I'm claiming £2353 (plus around £500 in interest), which I can understand is going to give Nationwide a bit of a problem. But I can't believe they took so long to give you back £110! Go you for being so persistent. ladymoonray

I am not sure if I would get your money back first and then apply for the injunction - if you let them know that you are going to do that they could dig their heels in and make things difficult rather than following procedure to the letter as they appear to be at the moment. If you are confident though of going to court then do it! Thanks Dolly. I will definitely make sure to get my money back first, though I will send a letter with the LBA stating my intention to take legal action if they try to close my account afterwards. I don't think I'd even have grounds for an injunction unless the bank have stated their intention to close my account, though I could be wrong about that.

Well done! I am very encouraged by the attitude the Co-Op credit card department are taking. I'd really rather not have to start a small claim over £351, but I will if I have to. I could really do with the money to fund my more troublesome claim against Nationwide, so I hope they pay up soon! ladymoonray Nationwide: £2443. Request for payment sent 4 July 2006 Co-operative Bank Visa: £351. Request for payment sent 22 June, LBA sent 6 July 2006 MBNA Visa: £476. Request for payment sent 22 June, LBA sent 6 July 2006