Why is no one claiming the contractual rate of interest???

[Guest bong]

I think I'd send the cheque back then with reference to your previous letter.

[doo]

OK will do attached to v.short letter. Will let you know of my progress. Thanks bong, you have spent a bit of time on this today and it is most appreciated.

[TANZARELLI]

Bong always like to help the cause. Selfless.

[doo]

I can tell you this Tanz it really was appreciated, just needed someone like bong to make sure I am on the right road, feel strongly about this and bong sure knows her stuff. There was another contractual claim paid out yesterday, cheque going back today (much as it pains me to part with the money) but for the good of the cause.

[Guest bong]

right I have had one of those afternoons..know the type I mean - start googling and one page leads to another and another.......It's enough to give anyone a headache. I've been on the trail of implied contractual terms in case law. Apparently there is a test, called the "Officious Bystander rule" - quote below taken from this link right near the end Article -Terms of the Contract

 

6.6.1 Terms implied in fact

To decide whether the court will imply a term in fact, ask whether it satisfies the ‘officious bystander test’, and / or whether it satisfies the ‘business efficacy test’. The courts use both expressions, and they are probably just two ways of expressing the same idea.

6.6.1.1 The Doctrine of The Moorcock the officious bystander formulation

The Moorcock (1889) 14 PD 64

A ship was damaged when the water level at a wharf fell and grounded the ship. A term was implied that the wharf should be safe.

The test is called the ‘officious bystander’ test.

The concept being that if the parties to the contract were to be told by a third party that they should remember a particular term they would turn to the third party and ‘testily suppress him with a common “oh, of course”‘.

 

Shirlaw v Southern Foundries [1939] 2 KB 206 HL

“...an implied warranty, or as it is called, a covenant in law, as distinguished from an express contract or express warranty, really is in all cases founded upon the presumed intention of the parties and upon reason. The implication which the law draws from what must obviously have been the intention of the parties, the law draws with the object of giving efficiency to the transaction and preventing such a failure of consideration as cannot have been within the contemplation of either side; and I believe if one were to take all the cases, and there are many, of implied warranties or covenants in law, it will be found that in all of them the law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficiency as both parties must have intended that at all events it shall have.”

 

This bit was taken from another link here http://66.102.9.104/search?q=cache:2nIBlJ3ec18J:www.courtservice.gov.uk/judgmentsfiles/j2840/armitage-v-stavelyindustries.htm+philips+electronique+v+british+sky+broadcasting+1995&hl=en&ct=clnk&cd=8&gl=uk

 

1. Sometimes the court has to resort to the implication of a term in order to ascertain the true meaning of the contract, taken as a whole. But there are strict fetters on the court’s ability to imply terms. Broadly, the court may not imply a term unless either it is necessary to give business efficacy to the contract, or the term is so obvious that it goes without saying. In Philips Electronique Grand Public SA v. British Sky Broadcasting Ltd [1995] 1 EMLR 472 Bingham MR warned:
   "The question of whether a term should be implied, and if so what, almost inevitably arises after a crisis has been reached in the performance of the contract. So the court comes to the task of implication with the benefit of hindsight, and it is tempting for the court then to fashion a term which will reflect the merits of the situation as they then appear. Tempting, but wrong."

   
   

2. Thus whether a term is to be implied must be judged as at the date of the contract.

 

I believe that last line gives reason for optimism.

 

As well as the above cases I have the following cases written down to check out at some point. I'm just logging them here before I lose the bit of paper they're scribbled on, but feel free if you want to research them. If anyone's already followed this trail, apologies.

 

Privy Council guidance in BP Refinery (Westernport) Pty Ltd v The President, Councillors & Ratepayers of the Shire of Hastings [1978] ALJR 20, at 26

 

Robin Ray v Classic FM plc [1998] FSR 622, at pages 641-643

[Pen]

It would be nice , if every now and again we could have a summary of what is happening with the CI argument, every time i log on to this site, the original concept of it has changed so much, new ideas are coming in to be debated all the time which is excellent !!! but one forgets what the original rational for claiming CI in the first instence was meant to be, even if it still holds as a argument for claiming this interest on bank chargers.

 

The debate are very interesting and worthy of consideration but it would be nice to know where we are up to without having to backtrack all the time, i do feel sorry for new members on here who start form post one and have to give up half way through,

 

just when you thought.........

 

Pen

[newbody]

http://www.consumeractiongroup.co.uk/forum/general/79524-key-arguments-against-compound.html#post702306

 

is a link to all the summary points both for and against i have seen and links to threads the quotes/points were taken from

[Pen]

Thanks newboy, i will now happily read up on it again. i got so lost with all the different arguments that everything seems to have changed since when i made my claim for CI, I have recently found a old statement from August 1995 with a loan charge on for 264.86 which I am know going to try and claim back along with other chargers, when i done my last claim last yr all i done was add 29,9% to it. is that still it formula or do we claim 29.90 on top of that. I have a lot of reading to catch up on.

 

Pen

[lazybones]

Hello Everybody

 

My question is about the way Contactual Compound Interest is applied to charges claimed for. I will try to give an example of the way I understand it below.

 

In this example I will exagerate the figures for simplicity.

 

Day 1. Charge £100.00 + 10% interest = £110.00

Day 2. Balance £110.00 + 10% interest = £121.00

Day 3. Balance £121.00 + 10% interest = £133.10

Day 4. Balance £133.10 + £100.00 Charge = £233.10 + 10% interest =

£246.41

Day 5. Balance £246.41 + 10% interest = £271.05

Day 6. Balance £271.05 + 10% interest = £298.15

 

Is this the way bank work out as they say "We work out interest on your cleared balance at the end of each working day."?

 

Does this mean they don't charge interest on weekends and bank holidays?

[2gr82btrue]

The Abbey ignored the fact that i asked for CI and offered me 8% would you suggest I go to the courts and argue the CI or what. I understand now they have settled the issues of settling the claim and CI are now an seperate issue..... any suggestions? Should i attend court or not...... would the judge listen to my claim or would it be dismissed due to the fact they have put funds into my account?.

[Stornoway]

Hello Everybody

 

My question is about the way Contactual Compound Interest is applied to charges claimed for. I will try to give an example of the way I understand it below.

 

In this example I will exagerate the figures for simplicity.

 

Day 1. Charge £100.00 + 10% interest = £110.00

Day 2. Balance £110.00 + 10% interest = £121.00

Day 3. Balance £121.00 + 10% interest = £133.10

Day 4. Balance £133.10 + £100.00 Charge = £233.10 + 10% interest =

£246.41

Day 5. Balance £246.41 + 10% interest = £271.05

Day 6. Balance £271.05 + 10% interest = £298.15

 

Is this the way bank work out as they say "We work out interest on your cleared balance at the end of each working day."?

 

Does this mean they don't charge interest on weekends and bank holidays?

They have to work out what interest is due at the end of each day because the balance changes every day, however the compounding effect only happens when the interest is actually charged to the account, which is normally monthly - i.e. the following month the balance will be higher after interest has been applied and you will be charged interest on that higher balance.

[quietzap]

Re Compounded Contractual Interest: COMPOUND INTEREST CALCULATOR provides a calculator which will compound interest annually, bi-annually, monthly, weekly, daily or continuosly.

 

All of course produce different results.

 

Spreadsheets mysteriously also can produce other results. While the interest may be calculated monthly the sum on which it is calculated may only be increased to take the accrued interest into account annually ie Annually compounded interest.

 

Is compounding monthly or annually the standard implied form of these contracts or will they state which applies explicitly?

 

I anticipate an arguement with Abbey re all this as they are clunking into action now I have put in revised claims to take Contractual Interest into account.

[Stornoway]

Re Compounded Contractual Interest: COMPOUND INTEREST CALCULATOR provides a calculator which will compound interest annually, bi-annually, monthly, weekly, daily or continuosly.

 

All of course produce different results.

 

Spreadsheets mysteriously also can produce other results. While the interest may be calculated monthly the sum on which it is calculated may only be increased to take the accrued interest into account annually ie Annually compounded interest.

 

Is compounding monthly or annually the standard implied form of these contracts or will they state which applies explicitly?

 

I anticipate an arguement with Abbey re all this as they are clunking into action now I have put in revised claims to take Contractual Interest into account.

You need to establish how frequently interest is applied and then you have your answer. With some mortgages interest is applied annually so the compounding effect would be annual. Most current accounts and credit cards are monthly interest applications so the compounding effect is also monthly.

[nicklea]

Re Compounded Contractual Interest: COMPOUND INTEREST CALCULATOR provides a calculator which will compound interest annually, bi-annually, monthly, weekly, daily or continuosly.

 

All of course produce different results.

 

I would suggest that if they are producing different results then there is something wrong with the interest rates you are using.

 

To take Lloyds as an example. They have an interest figure of 2.2% per month which gives an annual interest rate of 29.84%.

 

If you were to compound interest daily then you need to use the figure of 0.0716% (ie 0.000716) per day. This will also give you an annual interest rate of 29.84%.

 

If you come up with a different answer when you are supposed to have the same annual interest rate then you are using the wrong interest rates.

 

If you are using some other rate of interest then I can understand why some banks may feel they want to defend this part of the claim.

 

Hope this helps

[quietzap]

Stornoway wrote: "You need to establish how frequently interest is applied and then you have your answer. With some mortgages interest is applied annually so the compounding effect would be annual. Most current accounts and credit cards are monthly interest applications so the compounding effect is also monthly."

 

The interest may be applied to the account monthly, but not neccessarily to the Principal on which further monthly interest calculations are based until a year has elapsed so far as I can see.

 

And the Effective Annual Rate (I think that is the correct term) is supposed to take monthly compounding into account and can be applied as a simple interest over a period up to a year.

[quietzap]

To Nicklea - one of the points is that the same interest rate will give different results if you compound annually/monthly/weekly/etc.

 

Any interest rate has conditions which are part of its contractual nature. Rather like 3 apples not the same as 3 bananas. (Where is Bill-K now there are bananas?)

[thereshope!]

Morning:)

 

I wonder if I could ask for a little advice please ? I hope you don't all think that i'm cheeky as I haven't contributed to this thread for quite a while !

 

I thought I had made my descision re declining offer from Nat West, and im sure that if today hadn't been a Bank Hol ,I would have been at the post office sending my refusual letter off !

 

But time to mull is dangerous to ones sanity lol

 

This is where i'm at

Offer of £2106 for charges(thats the full amount)

£401.26 for stat 8%(that was the amount at date of service- they havent calculated for the 49 days that have since elapsed)

Total £2561.26

 

My claim is for £2106 charges

CI £2341.54(as of tomorrow)

Total £4501.54.

 

Obviously they are trying to divorce the charges element from the CI, so I decided to send the cheque back along with a letter saying either pay me the CI or I will see you in court.

 

I am just worried that the DJ will see me as being un reasonable in declining the offer.

The way I see it is they havent made me a full offer anyway, as they haven't taken into account the 49 days of interest that have elapsed since date of service.

They have also put a 'gagging' condition in the settlement offer, which in itself is unacceptable.

 

Tell me i'm doing the right thing here !

I have used the fairness and balance argument in my POC

[nicklea]

To Nicklea - one of the points is that the same interest rate will give different results if you compound annually/monthly/weekly/etc.

 

Any interest rate has conditions which are part of its contractual nature. Rather like 3 apples not the same as 3 bananas. (Where is Bill-K now there are bananas?)

 

Quietzap,

 

The point I was making is that if the previous contributor is getting different results by compounding at different rates then he is using wrong interest rates.

 

I agree with what you say that any interest rate has conditions which are part of the contract and that if you are trying to claim for contractual interest then you should either use the same method or, alternatively, one that arrives at the same result.

 

However, where I do disagree with you is where you say that the same interest rate will give you different results if you compound weekly/daily/monthly etc - this will only happen if you are using the wrong calculation.

 

To go back to the Lloyds example (I always find concrete examples easier to deal with). They charge 2.2% compounded monthly and quote an EAR of 29.8% (it's actually 29.84% but they're only obliged to show it to one decimal place). If you were to be claiming charges back worth £100 and you compounded this monthly at the rate of 2.2% you would end up with £129.84 at the end of 12 months. This is what 29.84% EAR actually means

 

Now, if you decided to calculate this daily then you should use the rate I quoted earlier of 0.0716% (or 0.000716) daily. If you compound £100 daily for 365 days at this rate you will also end up with £129.84.

 

If you end up with any figure other than the EAR at the end of a year then you have done the calculation wrong.

 

 

Hope this helps

[lazybones]

Hi nicklea

 

0.0716 compounded daily for 365 days = 129.85267

 

Effective Annual Rate = 29.85

[nicklea]

Hi nicklea

 

0.0716 compounded daily for 365 days = 129.85267

 

Effective Annual Rate = 29.85

 

Ok - you've got me! I was actually using 0.0715688139390158 but I was just too lazy to write all that in the post. Or I could claim, like the banks, that I was just quoting it to 3 significant places.

 

Regards

 

nicklea

[MilkTrayMan]

Hi thereshope!

...time to mull is dangerous to ones sanity lol

 

Obviously they are trying to divorce the charges element from the CI, so I decided to send the cheque back along with a letter saying either pay me the CI or I will see you in court.

 

I am just worried that the DJ will see me as being un reasonable in declining the offer.

The way I see it is they havent made me a full offer anyway...

 

Tell me i'm doing the right thing here !

IMHO...

U have claimed ££X's, the Bank has only offered U ££Y's.

The amount that they have offered U is therefore NOT the full amount that U have claimed.

It is NOT for the Bank to apportion what bits of your claim that their offer relates to (...appologises for not having read your entire claim thread before posting this!).

 

If U have been consistent in asking for C.I. from the first instance, there would be nothing to stop U apportioning any payment, forcibly placed into an account that was held by a claimant, against later unlawful debits and their respective C.I. charges and continuing your claim for the earlier debit's to keep an unlawful charges + C.I. claim intact.

 

 

Unless the Bank has submitted a 'Part Defence', U are entitled to expect FULL payment and nothing less, or else the Bank has to defend the FULL amount via the Court process.

 

Cos the amount that U are claiming brings U under the Small Claims Track (...less than £5,000), CPR s36 'Part 36 Payments' are not generally held to apply.

PART 36 - OFFERS TO SETTLE

 

Hang on in there...without Disclosure of their TRUE processing costs, the Bank can not substantiate their Defence and pay U short!!...

[quietzap]

To Nicklea, who wrote: "However, where I do disagree with you is where you say that the same interest rate will give you different results if you compound weekly/daily/monthly etc - this will only happen if you are using the wrong calculation."

 

Either I misunderstand you or you are mistaken.

 

The point about the frequency of compounding - monthly vs annually for a clear example - is that interest is added to the Principal on which the next lots of interest is to be calculated monthly or annually in my example here.

 

If the first month's interest is added at the end of the first month the Principal on which the second month's interest will be calculated will be higher than if it is not.

 

If the compounding goes on annually then each of the twelve interest payments will be exactly the same, if compounding is monthly each will be larger than the previous one.

 

If you do take the time to look at COMPOUND INTEREST CALCULATOR (in which I have no other interest whatsoever) the matter may be clearer if you input your data.

[millymollymoo]

Hi thereshope!IMHO...

U have claimed ££X's, the Bank has only offered U ££Y's.

The amount that they have offered U is therefore NOT the full amount that U have claimed.

It is NOT for the Bank to apportion what bits of your claim that their offer relates to (...appologises for not having read your entire claim thread before posting this!).

 

If U have been consistent in asking for C.I. from the first instance, there would be nothing to stop U apportioning any payment, forcibly placed into an account that was held by a claimant, against later unlawful debits and their respective C.I. charges and continuing your claim for the earlier debit's to keep an unlawful charges + C.I. claim intact.

 

 

Unless the Bank has submitted a 'Part Defence', U are entitled to expect FULL payment and nothing less, or else the Bank has to defend the FULL amount via the Court process.

 

Cos the amount that U are claiming brings U under the Small Claims Track (...less than £5,000), CPR s36 'Part 36 Payments' are not generally held to apply.

PART 36 - OFFERS TO SETTLE

 

Hang on in there...without Disclosure of their TRUE processing costs, the Bank can not substantiate their Defence and pay U short!!...

 

Highlighted in pink. Exactly my thoughts

 

milly XX

[millymollymoo]

By the way are peeps claiming unauthorised still or authourised?

[millymollymoo]

Thanks for that MTM;) you sweetie XXXXX

 

Milly XXX