To cover all the bases, I sent:
Dear Sir/Madam
Thank you for your letter dated 1 October 2007 in which you offer £80.00 in full and final settlement of my complaint, however, I do not consider this a satisfactory response. I refer to the points raised in your letter as follows:
(1) Regardless of whether the credit card agreement states that charges will be added to the account if the credit limit is exceeded or fail to make contractual payments, it is the amount of the default charge which is in question.
(2) You have been charging me charges that are contrary to the Unfair Terms in Consumer Contracts Regulations 1999. Schedule 2 (e) of the said regulations gives a non-complete list of terms which may be regarded as unfair, such as a term that requires me, as a consumer who fails in his obligation, to pay a disproportionately high sum in compensation. I believe your charges are disproportionately high and therefore they are contrary to the Unfair Terms in Consumer Regulations 1999. In addition I believe that your charges are a Penalty. Penalty charges are irrecoverable at common law. The precedent for this was Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79 along with Murray v Leisure Play [2005] EWCA Civ. 963. It was held that a contractual party can only receive damages for an actual loss or liquidated loss. It is clear that your charges do not reflect any actual and/or real loss.
I have great respect for Egg's pre-estimate. However, if your charges are indeed a genuine pre-estimate of the administrative costs likely to be incurred by you in dealing with defaults then in order to reassure me that your penalties really do reflect your costs, I once again request that you provide me with a breakdown and proof of all costs involved with regard to your actual or liquidated losses involved in any breach of contract to which these charges relate with yourselves and that these charges reflect your true costs in relation to the said charges and are proportionate to the charges levied on my account as defined in Unfair Terms in Consumer Contracts Regulations 1999 Schedule 2 (e). I would expect this to include a comparison of all charges levied against all customers and the actual costs incurred by you when those customers default. In co-operating with OFT, Egg surely must have conducted an audit and I would be happy to see the post event audit documentation to justify costs.
(3) I refer to your comment regarding the Office of Fair Trading (OFT) default charge threshold of £12.00. I am aware that the OFT have stated that “where there are exceptional business factors... for example where a card issuer has a policy of requiring customers to pay minimum monthly repayments by direct debits, such as that operated by Egg….it may be able to set a fair default fee at a level above the threshold”. However, this does not mean that your £16.00 is considered fair. The OFT state that only a court can decide finally whether a term is unfair.
Therefore, I will accept the sum offered only as part settlement and on the clear understanding that I will pursue recovery of the remainder, with a County Court claim, if necessary, although I sincerely hope that it will not be.
I do hope that you will respond positively to this letter in order to avoid court proceedings, as if this case does go to court you will be aware that you could also be liable for 8% statutory interest on the total amount of charges claimed (as of today this amounts to £XXX) plus my costs. To clarify, a positive response being no less than an offer of full settlement of all charges incurred on my account.
I am aware of many cases that you have settled in full out of court to date and I assume therefore that would also be your intention in this case. If that is so, then to allow this claim to get that far may be considered an abuse of the court process, so I once again, respectfully request that you refund the total amount of charges I am claiming, now totalling £XXX as per the attached schedule. I will give you 14 days to respond to this letter before taking the matter to Edmonton County Court without further notice.
Kind Regards
LC
