Loz vs A&L - direct debit and subsequent charges

[dundeelaw]

I just read you are repaying your overdraft at £20 per month. Incase you do not know, you can write a letter to them letting them know that the account is in dispute.

 

Send this by Recorded Delivery and keep a copy for your court bundle. They should stop any repayments that you are making until the outcome of the court case.

 

Also, inform the FOS about your Account Closure. A & L have already been fined by them for closing the account of a customer who reclaimed charges. The more complaints they receive, the more fines A & L will receive. Who Knows..fingers crossed..the may loose their licence to be a bank.

[loz]

Cheers, I have reminded them a few times that a dispute exists. I am paying the £20 (even if I don't strictly have to) so that I am at least acting in a reasonable manner, though one more radgie letter from A+L and I will probably stop.

 

The FOS were among the first people I spoke to when the account was closed - hopefully I can finish writing my complaint in the next day or two. I really want payback for A+L's disgraceful behaviour

 

Loz

[loz]

General Form of Judgement or Order

 

Before Deputy District Judge Smart sitting at North Shields County Court...

 

Upon reading a letter from the claimant and the defendant having no notice of the application

 

It is ordered that

 

The stay is continued until judgement or other determination of the OFT test case.

*sighs* I expected this of course. I thought I'd sent a copy of my letter to Wragges but maybe I didn't - does this really matter that much? If it does, how am I supposed to know?

 

Anyway, I sent my (lengthy) complaint to the FOS regarding A+L's closure of the account. I got movement from MBNA within 3 weeks or so of reporting them to FOS, so fingers crossed...

 

Loz

[loz]

Six months after I complained, I have a letter from the FOS - their adjudicator is now ready to look at my case. Hoping for a speedy resolution now.

 

Loz

[loz]

I have a response from the FOS Adjudicator which I will scan later. Essentially he does not think A+L have done much wrong, which disappoints and upsets me.

[loz]

I thought we could attach files here... never mind, here is my letter from the FOS adjudicator:

Megaupload - FOS response (pdf)

 

Just to make it clear, I went to the FOS about the way that A+L closed my account - however it is difficult to separate that from the charges case. They closed the account because I kept going over my limit, which of course was because of their charges. At no point did they acknowledge that I was disputing the debt, and it seems that the FOS guy is not interested in this either ..it's hard to know where to start with his letter

 

For starters he acknowledges that A+L have not responded to my complaint (made 10 months ago!) - to me this sums up their attitude and I want to make something of this point but I'm not sure how.

 

He refers to a letter dated 12/12/07 - this stated that my account was "causing concern" and asks me to call urgently to discuss it and avoid further action. There is another letter dated 13/12/07, headed as a default notice, which requests that I bring the account back within its limit by 19/12/07. The sharp among you will notice that this is six days, or by the time it reached me, four or five days. I could not meet this demand but I knew I would be paid a few days later. I did not (could not!) use my card or issue any cheques in this time, however a cheque which I had written a week or two earlier was presented (and paid by A+L!).

No, I did not call them. I prefer to keep things in writing (I did indeed write to them, an angry letter dated 18/12/07 clearly headed "in dispute", no reference to this in the FOS letter), even though previous experience is that I am ignored, and the impatient/unreasonable nature of these two letters gave me no confidence to pick up the phone. There is also no evidence that they attempted to call me to resolve the issue.

 

"Although this aspect of your complaint regarding bank charges is currently on hold this would not give you grounds for non payment of the outstanding balance of your account."

Even though I am disputing the debt, they are allowed to pursue me, and I have to pay up (even though I cannot pay as fast as they are applying charges)? Are you sure, Mr FOS? Can anyone help me with this bit?

 

The so-called default notice referred to "further action" which "may" be taken "on or after the date shown" - ie. 19/12/07. Nothing specifically telling me that they would close the account (or "withdraw facilities" as they put it) on XX date until their letter of 22/1/08 when they did so with immediate effect (see earlier posts). FOS guy sees nothing wrong here! I maintain that I was not correctly given 30 days' notice as specified in the Banking Code and A+L's T&Cs.

 

"...they have advised me your account has not been closed, but the facilities have been withdrawn."

I have a letter from A+L which although dated 12/3/08 clearly states that the account is closed. Is this worth anything?

 

Can I refer to the FSA waiver, in particular Annex 2 regarding the identification of customers in financial difficulty? It refers to "items repeatedly being returned unpaid due to lack of available funds" and "repeatedly exceeding a credit card or overdraft limit without agreement (and, in this regard, where a complainant has incurred over £500 in unauthorised overdraft charges in the previous 12 months, that is to be treated as indicative of financial difficulty)". I have not previously used this, not specifically, and A+L clearly have not identified my "difficulty" despite their claim that my account was "causing concern".

 

I'd appreciate any advice whether constructive or otherwise. I really don't think the adjudicator has taken me seriously here - I admit I have made mistakes but they are mistakes that any layman could make.

 

Cheers

Loz

Edited January 20, 2009 by loz

[caro]

See if there's anything you can use here.

 

http://www.consumeractiongroup.co.uk/forum/bank-templates-library/115023-application-removal-stay-grounds.html#post1142776

 

You will need a very strong case to prove hardship. Are you in receipt of any benefits or on low income and exempt from court fees?

 

If you submit an N244 to request removal of the stay on hardship grounds, I'd suggest you amend your Particulars of Claim at the same time as you don't mention what laws you are relying on to prove your case and there's a strong possibility it could be struck out IMHO.

[loz]

Just tidying up this thread, this was my letter to the FOS on 20th Jan:

I refer to your letter dated 6th January regarding my complaint against Alliance + Leicester. I am indeed disappointed that you do not see fit to recommend that my complaint is upheld, and I request that you reconsider.

 

As I am sure you will agree, it is difficult to separate this complaint regarding the account closure from any issues I have had regarding the charges applied. I understand the reasons why (according to the account’s Terms & Conditions) the charges were applied to the account, and I understand that nothing can be done in that regard until the OFT have concluded their test case. What I do not understand is how Alliance + Leicester can be allowed to pursue a debt (ie. the overdraft) in the manner which they did, when a clear dispute exists over that debt. Not only had I issued court proceedings on the matter but furthermore I had highlighted the dispute in letters written to Alliance + Leicester (copies enclosed) - letters which did not produce any useful response from them.

 

My previous correspondence referred to OFT guidance on debt collection, and while I appreciate that this guidance may be intended for a different set of circumstances, I believe that it also applies here. The OFT refer to “ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment” as an example of an unfair practice; while it could be argued that Alliance + Leicester’s demands for payment were justified, it is my opinion that to an equal degree they have ignored the dispute. I received no letter that directly addressed the points I raised and their inaction has escalated the situation in my opinion. Are they not obliged (by the Banking Code?) to at least acknowledge these letters?

 

You refer to the letters dated 12th and 13th December 2007 from Alliance + Leicester which I have raised concerns about. You also mention other letters which they claim to have sent; I am unfortunately not in possession of these items so cannot comment on them. I can however attempt to clarify certain points.

 

Firstly, my reply to Alliance + Leicester indicates that I did not receive either letter until 17th December 2007. This gave me only two days to meet their demands of payment by the 19th, which I consider unreasonable by any means. Even if they had posted this letter straight away it could not have reached me before 14th December, which I would consider to be the “date of service”. Therefore they would not have been entitled to demand payment before the 21st, which is “not less than seven days after the date of service of the default notice” (Consumer Credit Act 1974, 88(2)).

 

It was not possible for me to make any payment at all to the account until my salary was credited on 24th December, which is seven days after I received their demand (the actual date of service). In the meantime I did not attempt to use my debit card or cheque book. Rather than telephoning Alliance + Leicester I wrote to them (18th December), again prompting no useful reply. I acknowledge that I did not clearly explain my situation in that letter, but considering their letter dated 12th December which stated that my account was “causing concern”, I had reason to believe that they had realised I was in financial difficulty. Clearly I was incorrect in that assumption.

 

I have recently seen a copy of the FSA “waiver”, a document which I gather sets out the terms under which banks may defer complaints regarding charges. Annex 2 describes evidence which firms should take into account when assessing whether a complainant is suffering financial difficulties; this evidence includes “items repeatedly being returned unpaid due to lack of available funds” and “repeatedly exceeding a credit card or overdraft limit without agreement (and, in this regard, where a complainant has incurred over £500 in unauthorised overdraft charges in the previous 12 months, that is to be treated as indicative of financial difficulty)”. Alliance + Leicester should have been aware that these were my circumstances, since they were frequently returning items, applying charges to my account, charges that totalled over £1300 in a nine month period.

 

Furthermore the waiver offers guidance (sections 14-16) that if a complainant is in difficulty “the firm might waive future unauthorised overdraft charges; and the firm might not enforce debts against complainants in financial difficulty to the extent that these debts are made up of unauthorised overdraft charges.” I had requested that Alliance + Leicester might cease applying these charges at least until the dispute was resolved; this request was not acknowledged.

 

Finally, the crux of my complaint which is the lack of proper notice from Alliance + Leicester upon the closure of my account. May I remind you of the Banking Code which states “under normal circumstances, we will not close your account without giving you at least 30 days’ notice”, plus refer to Alliance + Leicester’s own Terms & Conditions which state much the same. Most definitions of “notice” clearly describe a means by which the recipient would not only be informed of action which will be taken, but also precisely when it will be taken. As previously stated, Alliance + Leicester’s letter/default notice of 13th December 2007 does neither in my opinion, instead using rather vague language. They describe action that “may be taken”, “on or after the date shown” (ie. 19th December as previously described), rather than “we will do X on Y date”. For example, I have had an account closed following a dispute on a previous occasion - I received a letter from HSBC stating that my account would be closed on a date over a month ahead, also advising me/allowing me the opportunity to seek alternative banking facilities. I consider this to be the correct way of dealing with such a situation, regardless of the reasons behind their decision.

 

To make their decision as they did on 22nd January 2008, withdrawing facilities immediately and notifying me by letter, is simply not good enough. I had no prior knowledge that this action was to be taken on that date, so by the time I found out, I had effectively had a notice period of minus one day. It was for this reason that I was so angry when I was forced to telephone Alliance + Leicester on 23rd January, and then to take the following morning off work to attend their branch.

 

In summary, I still do not believe Alliance + Leicester were justified in their actions. I was disputing the amount I owed them (my charges claim was far greater than the amount of my overdraft), yet they did almost nothing to address my concerns prior to taking action. In your conclusions you say that I failed to “discuss [my] circumstances with Alliance + Leicester” - I must disagree on this point. I attempted to engage Alliance + Leicester in a sincere dialogue, by letter, yet was not rewarded with any constructive response. Almost all the correspondence I received appeared to be generic, with neither the full name nor signature of a staff member. You also correctly state in your letter “Alliance + Leicester have yet to provide a response” to this complaint; this statement neatly summarises how I feel I have been treated by them.

 

I trust that you will take into account the points I have tried to clarify here and review my case fairly according to FOS procedures.

[loz]

And this is the "second opinion" I asked for, from the adjudicator's manager:

 

MEGAUPLOAD - The leading online storage and file delivery service

 

I give up.

[loz]

Time to do something with this claim methinks... I need to submit a new POC to the court, just pondering how much to include.

Do I mention their shoddy methods in closing my account, with regard to the basics of communication with the customer (ie. me!) and the requirements of the CCA? Do I mention their failure to comply fully with my SAR, even after I have taken it to the ICO? If so, how do I particularise this?

[loz]

I got a post-OFT "bog off" letter from A+L this week, no surprise there. Haven't heard anything from the court yet...

Also I finally got some more SAR stuff, a full set of printouts relating to my account. No copies of correspondence though.

 

Hmph.

[caro]

Check your paperwork from the court to see what was said about the stay. If you don't have it, phone the court and ask for a copy if possible, and find out when the stay finishes, so you can decide how you want to proceed.

[loz]

The court paperwork states that the case is stayed "until judgement or other determination of the Office of Fair Trading test case". So the stay should be lifted now, right..?

 

I'm hoping to amend my POC very soon with the assistance of this site - I like what I've seen of the new arguments so far and I feel as confident as at any time over the past 2 years about this. However I wonder if I can add in something about the way they closed my account (with ref to the CCA), and their DPA failures in responding to my SAR - it took nearly 11 months and I still don't have absolutely everything IMHO.

 

Cheers

Loz

[loz]

Can anyone help me with a sample "charges letter" as sent by A+L during mid to late 2007 by any chance? I don't seem to have kept any of the letters they sent to notify me of charges *kicks self*

 

Thanks in advance,

Loz

[loz]

Here we go... 4 pages in the post to A+L, with thanks to GLC and CAG:

I refer to your letter dated December 2009 in which you have advised my complaint about unfair bank charges is to be closed and have given me eight weeks to respond. I write further to this complaint concerning the unfair bank charges applied to my current account which had been placed on hold pending the Supreme Court test case of OFT v Abbey National plc and others [2009] UKSC 6.

 

Although the OFT lost this case under regulation 6 of the Unfair Terms In Consumer Contract Regulations 1999 (UTCCR), the Supreme Court stated that this did “not resolve the myriad cases that are currently stayed in which customers have challenged relevant charges” (para 61 of the court’s judgement). In particular, the Supreme Court made it clear that “it remained open to question whether bank charges were fair” in relation to regulation 5(1) of the UTCCR (para 80 of the Supreme Court’s judgement).

 

Accordingly, in consideration of my request for a refund, and in light of the Supreme Court’s judgement, please ensure that you give regard to the following amended grounds of complaint:

 

(1) I seek a refund of overdraft charges (plus interest thereon) applied to my account because these charges were unfair in terms of regulation 5(1) of the UTCCR as -

(a) your charges were set by reference to the overall costs of providing current account services to all of your customers rather than the costs incurred by my individual conduct which occasioned bank charges;

(b) at no time have you ever informed or adequately explained to me, that I would be paying bank charges in order to cross-subsidise the costs of providing the vast bulk of your customers with “free if in credit” banking;

© your charging structure was designed or created the potential for rolling or multiple charges, with charges and interest being applied and/or occasioned by “charges on charges”;

(d) the way that charges were imposed and accumulated in terms of your charging structure was unclear, unpredictable and complex; and

(e) the main providers of current accounts in the UK operated a similar charging structure to you, and in so doing restricted market competition, resulting in my inability to obtain an alternative current account with a fair charging structure;

(2) Separately, I also seek a refund of overdraft charges (plus interest thereon) applied to my account because these charges were unfair within the meaning of section 140A(1) of the Consumer Credit Act 1974 for the reasons as set out in paragraph (1)(a) to (e) above, and in relation to the following additional reason: your charges were excessive in relation to the level and/or cost of the borrowing which triggered these charges.

 

In particular, and without prejudice, the burden of proof for the above rests on Alliance + Leicester to prove that the circumstances of our relationship are fair (pursuant to s.140B(9) of the Consumer Credit Act 1974), so unless you can provide evidence of this I expect a refund of the full amount requested, namely the total of charges applied to my account between November 2006 and January 2008 which is £1399-00, plus interest thereon.

 

I would also ask you to have regard to the following examples of financial hardship which I have suffered as a result of your unfair and punitive charges:

 

• items repeatedly being returned unpaid due to lack of available funds, often within ten days of my salary being credited;

• failing to make loan repayments or other commitments, for example a monthly standing order for a loan with HSBC, also I was unable to pay my credit card bills for several months at the height of your charges;

• repeatedly exceeding my overdraft limit without agreement, triggering further charges which totalled over £125-00 during several months and on one occasion over £360-00 in a single month (see attached);

• due to lack of funds being forced to pay for groceries, utility bills, council tax etc using my company credit card, thereby “deferring” these payments to the following month and creating a cycle which is difficult to break out of - furthermore such use of company resources in this manner could have led to disciplinary action against me.

 

Several of these instances, if not all, clearly meet the FSA’s guidelines for identifying customers suffering financial hardship, particularly during the period of the OFT test case and associated waiver. Your letter of 12th December stated that my account was “causing concern”, indicating that you realised I was suffering financial hardship; however your actions were not sympathetic to this. I had previously contacted you in late August 2007 requesting a temporary increase to my overdraft limit, my pay having been approximately £500 short due to a mistake in my employer’s payroll processing; this request was dismissed and I got the distinct impression that Alliance + Leicester were not at all interested in helping me, an impression which only intensified with your further reluctance to respond to my correspondence.

 

Please refund these charges (plus interest thereon) to me within 14 days, and remove the associated derogatory marks from my credit record. I reserve the right to recommence existing and stayed court proceedings without any further notice, and to seek an additional award for distress and inconvenience, together with legal expenses.

 

I also reserve the right to amend my existing Particulars Of Claim to include your actions in further penalising me while a clear dispute existed regarding my account, culminating in your issuing defective default notices and the subsequent removal of banking facilities from me. To summarise:

 

• As of July 2007 the account was in dispute, yet contrary to your obligations Alliance + Leicester continued to add charges despite my letters of objection;

• “Late payment” markers were registered against my credit record, again while the account was in dispute;

• The scale of your charges became so great that it triggered Alliance + Leicester sending me default notices demanding payments in less than a week of their date - as you should know the Consumer Credit Act 2006 requires that a debtor be given no less than 14 days, rendering your default notices unlawful and unfair under the Act;

• Your continued application of charges and ignoring of my correspondence led to Alliance + Leicester withdrawing banking facilities on 23rd January 2008, without serving sufficient notice upon me that this action would be taken on this date - the Banking Code stipulates a notice period of 30 days minimum;

• During my discussions with the Financial Ombudsman on this matter it became apparent that Alliance + Leicester rely on their default notices as sufficient notice of account closure - these notices did not stipulate a date upon which such action would be taken, furthermore as stated above these notices are defective according to the Consumer Credit Act 2006.

 

This unlawful termination of account, on the back of an improperly served default notice, on an account that was in dispute, caused me great distress and inconvenience. Please note that I intend to claim compensation for such in my revised Particulars Of Claim.

 

Upon the withdrawal of banking facilities, Alliance + Leicester placed a default on my credit record, which has seriously affected my ability to obtain credit (including a mortgage). My overdrawn balance was entirely made up of unlawful charges as stated earlier. Had you acted fairly and lawfully in your application of charges there would have been no default - indeed there would no longer have been an overdraft on the account. This default, and the late payment markers preceding it, therefore amounts to a material breach of the fourth principle of the Data Protection Act 1998; namely that “personal data shall be accurate and, where necessary, kept up to date.”

 

I seek removal of this default from my credit record; I also understand that as per Durkin v DSG Retail Ltd and HFC Bank PLC [2008] and Kpohraror v Woolwich Building Society [1996] I am entitled to claim £1000-00 in damages for this inaccurate entry and its consequences upon my creditworthiness.

 

I would finally like to draw your attention to Alliance + Leicester’s failure to meet a further obligation under the Data Protection Act 1998; namely failure to properly respond to a Subject Access Request under the Act. On 27th January 2009 I requested full disclosure of all materials relating to my business with the bank, followed by a reminder dated 16th March. On 23rd March Alliance + Leicester sent a set of statements to me but nothing more, despite my request clearly stating the materials I required. In April 2009 I made a complaint regarding this to the Information Commissioner’s Office, who wrote to you on my behalf. In November 2009 I finally received copies of my account notes as per your computer system; however I have still not received (for example) copies of all correspondence between ourselves as per my original request. I seek further damages under the Data Protection Act 1988 for your failures in this regard.

 

In summary, I request repayment of the following from Alliance + Leicester:

• £1675-28 in charges plus interest thereon as per the attached schedule;

• Removal of all late payment and default markers from my credit file;

• £1000-00 in damages for loss of amenity and damage to reputation as a result of the account closure and associated default entry;

• £60-00 in court fees to date;

• Further damages for distress and inconvenience as a result of Alliance + Leicester’s unlawful and unfair behaviour.

 

I look forward to a full response to this letter within 14 days and if I do not receive a satisfactory response I intend to pursue my existing court action for the above described total £2735-28 plus further damages at the court’s discretion.

I'll have to formalise it more for my amended POC, but it will do for now and hopefully A+L will realise I am not giving up without a fight. Here's hoping!

 

Loz