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

[Pen]

Hi Newbody,

Thanks for taking a interest. no it's from Lloyd's, the barrister made the offer saying if i except, then the money would be paid into my account by the end of the day. He did not know SCM had deposited it the day before which gave me time to work out what they had paid. I refused his offer and he informed the court that no settlement was reached due to a disagreement over the amount of interest that should be paid, the judge wanted to know why I was claiming 29.9 and why LTSB would not pay it, she asked the barrister to make a telephone call to SCM to clarify their position on interest but they whire not available when he called so it is to be discussed at the next hearing. Hence i really need to get my head around it all for when i am next in court. The main part of the claim that is left in dispute is the CI plus a few hundred pound in chargers which they had disagreed on.

Basically I am happy with what was put into my account as most if not all of my chargers have been paid plus costs plus 8% therefor i don't think i have anything to lose when next in court only I do know that there a very fee circumstances where a court will award CI and I would like to know what these circumstances are as althrough i have spent months researching CI the issues around it change so often, but i do need to be absolutly clear on my arguments ito enable me to present them

[newbody]

I think most have settled their claims on payout of charges and 8% as for the main points the best i can suggest is that the main arguments had been implied mutiality of contract etc where it is not written fairness and balance etc i.e they charge us it on our default it was never expected for them to do the same otherwise a provision would have been written into the contract we allow them to borrow our money upon depositing it and in return we get paid XX% interest on in credit balances for doing this

 

but to my knowledge no one has followed through on just a CI element

 

also might be worth trying to get hold of GlennUk Milktrayman and photogenic i think it was as they did appear to be some of the most knowledgeable in this area of cliaming and some of the strongest supporters of CI claims

[drjazzz]

Hi

 

I'm just about to send off my prelim letter to Lloyds, with contractual interest - now I am including a reclaim for the account fees they charged me for an overdraft, once my overdraft was comprised completely of unauthorised borrowing + the contractual interest due back. And then contractual interest on those fees. Does this sound ok? Seems to me it is all charges obviously related to their unauthorised borrowing, much like overdraft interest.

[neilwoods]

Hi

 

I'm just about to send off my prelim letter to Lloyds, with contractual interest - now I am including a reclaim for the account fees they charged me for an overdraft, once my overdraft was comprised completely of unauthorised borrowing + the contractual interest due back. And then contractual interest on those fees. Does this sound ok? Seems to me it is all charges obviously related to their unauthorised borrowing, much like overdraft interest.

Not really.

 

If you are charging them contractual interest then the recompense for the overdraft fees should come out of that.

 

The contractual interest should be used to mitigate any loss you have made as a result of the unlawful charges and this would include overdraft interest.

[drjazzz]

Not really.

 

If you are charging them contractual interest then the recompense for the overdraft fees should come out of that.

 

The contractual interest should be used to mitigate any loss you have made as a result of the unlawful charges and this would include overdraft interest.

 

but why is an account fee for an overdraft comprised entirely of reclaimable money necessarily any different from the fee of interest on said overdraft?

[neilwoods]

but why is an account fee for an overdraft comprised entirely of reclaimable money necessarily any different from the fee of interest on said overdraft?

Firstly, I'd say that I am not 100% certain of this. But unless a legal professional posts, I doubt that anyone else is either! So this is just an unqualified opinion.

 

The difference is that the bank is allowed to charge a fee for lending you money. True they only lent you the money to pay an illegal charge, but since they lent you the money, you were not deprived of its use, and the contractual interest you are claiming will offset the fee involved.

 

Much as it would be nice to double charge the bank as a punishment, I doubt that a judge would allow this form of 'double charge'.

[Fred_Funk]

Apologies for interrupting but this seems as appropriate a place as anywhere. ;-)

 

I'm on the verge of putting in a court claim including contractual interest (compounded). With this in mind I started my own thead...

 

http://www.consumeractiongroup.co.uk/forum/general/95909-particulars-claim-when-asking.html#post890538

 

... in a bid to clarify one or two things. Unfortunately, someone has come along and managed, albeit inadvertently, to cause me to question everything I thought I knew.

 

I would, therefore, be very grateful if someone who's got this all clear in their head can go and take a look and clarify that I do, after all, know what I'm talking about.

 

Thanks in anticiaption

 

Fred_Funk

[crazyworld]

Ok, I have read many pages of this thread, and I am incredibly confused, it seems there are many differing opinions about whether people should purely be claiming the statutory interest, or the statutory interest on top of the contractual interest, or purely the contractual interest (and then of course there's the argument about whether or not to use the authorised or unauthorised contractual interest rates), or leaving it up to the judge to decide and giving them the option when filling out court papers.

 

By the way, I found a calculator at this site which seems to work out contractual interest on each charge, for those who might be interested.

 

Also can someone advise on whether after sending the letter before action (which I sent 2 days ago) without mentioning contractual interest before this point, whether it would be worth giving the judge the option of either awarding contractual interest (unauthorised/authorised?) or statutory interest?

 

Thanks in advance from a very confused crazyworld

[Fred_Funk]

crazyworld

 

Unfortunately, most of the arguments surrounding contractual interest aren't conducted in black or white but shades of grey! ;-)

 

Neverthless, there is, I think, a consensus regarding what is and isn't good practice - though, even then, there can be some debate as regards specifics.

 

In anycase, there is now a clear argument for asking for contractual interest (compounded) and plenty of people have got this - though, it ought to be emphasised, very few if any of them have got as far as appearing in court.

 

Be that as it may, I think the majority of people would now agree you have nothing to lose - and everything to gain - by going for contractual interest (compounded) at your bank's unauthorised rate.

 

Assuming this is what you do, then the commonly held view is that you'd be pushing your luck to ask for statutory interest on top. Yes, one or two people have succeeded in getting both but the legal argument for doing so is far from clearcut and their success probably owes as much to an oversight on the part of their banks.

 

When it gets to the stage of submitting a court claim then you would be well advised to request the statutory s.69 interest as an alternative to the contractual interest (compounded) you are asking for.

 

Of course, the chances are your bank will pay up before it goes to court but, in a worst-case scenario, if the judge dismisses your argument for contractual interest you will at least get the statutory interest which you are legally entitled to.

 

Hope this makes things a little clearer?!

 

Fred_Funk

[crazyworld]

Hi Fred, thanks for the reply, I think i've got what you're saying. I'm going to offer contractual interest at the unauthorised rate as an alternative to the statutory interest I think, as that seems to be the safest thing to do - I'll have to do some more reading up on here on the arguments for claiming contractual.

 

Do you not think it matters by the way that i've never mentioned about the possibility of claiming contractual interest before now? I just don't want to do anything that might lessen my chances in any way. Plus this is a very complicated subject isn't it.

[Fred_Funk]

Do you not think it matters by the way that i've never mentioned about the possibility of claiming contractual interest before now? I just don't want to do anything that might lessen my chances in any way. Plus this is a very complicated subject isn't it.

 

No, I don't think it matters. As long as you do so as soon from the point you put in your court claim that, IMHO, should be fine.

 

Assuming your bank is maintaining that all it' charges are perfectly legal, blah, blah, blah... it seems reasonable to assume that had you mentioned contractual interest in either your prelim or LBA it would, in anycase, have dismissed it out of hand.

 

As regards arguments for asking for contractual, you're right, it can get quite complicated. With this in mind, I'd suggest that rather than try and read every thread in existence on the subject you identify a couple where the contributors clearly know their stuff and, in the main, concentrate on these - otherwise you run the risk of going around in circles and ending up more confused than you started. ;-)

 

With that in mind, I've found this thread very helpful...

 

http://www.consumeractiongroup.co.uk/forum/lloydstsb-successes/26172-mindzai-lucid-lloyds-tsb.html

 

... all the more so as Mindzai (he's Lucid's husband) is the man responsible for one of the contractual interest (compounded) spreadsheets available on this site. Better still Mindzai and Lucid have posted all their correspondence between themselves and the bank/court and, last but not least, they've got their money back, plus contractual interest, from Lloyds TSB.

 

Hope that's some help!

 

Fred_Funk

[mbderby]

I still dont think i get it about the interest. When people are talking about claiming back interest are they talking about:

(1) claiming interest from the bank against for the individual charges and the amount of time the charges they imposed had been taken from me, or

(2) claiming back interest taken by the bank for going overdrawn.

 

If i want to (1) claim interest from the bank for against the charges do i use the contractual interest spreadhseet, and am i therefore more likely to have to explain my reasons for this in court?

 

Thanks

 

Mike

[clairemp]

Hi

 

In my case against Clydesdale Bank (operating as Yorkshire Bank), we ended up at court purely to discuss the contractual rate of interest issue. They had made an offer in writing, an offer encompassing the total including contractual rate of interest, which they partially paid and then reneged on the remainder. Their excuse is that it was a typo which made the judge laugh.

 

The judge refused to hear the case, saying that he would not accept the settlement unless Clydesdale admitted liability (and quoted the 15 May Birmingham Lloyds case as example). But on the matter of contractual rate of interest, he stated:

 

- I had leave to apply for estoppel (not entirely sure what this is!) to amend the particulars of claim based on the actual agreed figures and the difference between what they agreed and what they promised.

- the Bank would have to file in line with their current defence (for which they entered no evidence) as to whether they haven't/have been applying charges and not at that rate of contractual interest.

- I have to get their terms and conditions and prove that they apply that amount EAR%.

 

If they have applied charges at that contractual rate of interest, the judge explicitly stated that this would then be unjust enrichment.

 

Does that make sense?

 

Cheers.

Claire

[maximuscatticus]

Hi there,

 

I am still finding it really confusing about interest. Can somebody please tell which spreadsheet to use or which rate of interest to use on my LBA letter ?

 

I didnt ask/show any interest atall in my Prelim letter just my charges, so should I just carry on just asking for my charges back as I have started this way and if I can I still charge the 8 % interest rate when it comes to the court stage?

 

Many thanks - really keen to get my letter off today as had their first fob off letter on 17 May 2007.

[Falkirk1298]

Annyone noted this thread?

 

http://www.consumeractiongroup.co.uk/forum/halifax-bank-bank-scotland/97691-contractual-interest-precedent-lost.html

[tifo]

that link above to the thread would seem to kill off this thread for good.

[Gez]

Legal precedents have been in place for a heck of a long time now regarding penalty charges, yet these bankers still impose them.

[MilkTrayMan]

that link above to the thread would seem to kill off this thread for good.

£100.76 says that U're wrong!...lol...

[tifo]

£100.76 says that U're wrong!...lol...

 

Does that figure include CI?

 

I've read responses to that thread which state that claiming CI is going to be difficult now.

 

So does the case not set a precedent then?

 

Confused .....

 

I have several complaints with CI and have refused charges + stat offers. Now i don't want to lose the whole amount because of confusion over what can and cannot be done.

[overflow]

I noticed this thread and did a bit of looking into it.

not that I really understand most of it but under Interest under the Supreme Court Act 1981 heading it says;

 

Section 35A of the Supreme Court Act 1981 confers a power to award simple interest in a judgment for a debt or damages:

The section also provides for interest on a debt that has been wholly paid after the institution of the action otherwise than under a judgment:

Since there is then no judgment for the principal sum, the relevant subsection reads " the defendant shall be liable to pay the plaintiff " rather than "the judgment may include", but leaves it to the court to determine whether the interest shall is to run on the whole or part of the sum, and the rate at which and the period for which it is to run. There is no power to award interest on a sum paid in full before the institution of the action, to represent the delay in payment from the time provided in the contract.

 

It was made clear in the Westdeutsche Landesbank case that the power under section 35A is exclusive. That is to say, while there is an equitable power to require payment of interest on money found to be due on the taking of an account in equity, or otherwise in connection with an equitable remedy, this power will not be used in support of a judgment for an ordinary debt, as the statuatory power exists for this purpose and should not be duplicated or by-passed. Thus the equitable power cannot be used as a means of awarding compound interest , EXCEPT IN THE TRADITIONAL CASES OF FRAUD AND PROFIT MADE FROM A FIDUCIARY POSITION.

 

Now if anyone can unravell this for me I have a feeling that there is a message there somewhere.

As I understand things ( god I hope ive got this right) the banks are in a Fiduciary Position regarding our money sooo could this point hold water in the argument for compound interest regarding anyone who wants to claim this ?

Am I making any sense or have I completely lost it . Ive read so much about interest and the different types Ive propably got the wrong end of the stick entirely and this whole thing is irrelevant to any argument or purpose.

[neilwoods]

I don't think a bank holds a fiduciary position wrt a customer. But I could well be wrong!

[steven4064]

I don't know whether they do officially but they certainly do morally as it means a position of trust. THe Westduetsche case mentioned above is authority for the following propositions:

 

1. The basis of all trusts is conscience - see Westdeutsche v Islington BC

Steven

 

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[1970]

I have £500 of charges from a loan shark. The agreement was signed for and paid up within in 6 months a couple of years ago.

 

At 285% compounded interest, my claim would now come to £47k

 

Here are some questions:

 

1. Shall I go for it?

2. If so, do I issue a claim for the charges in the small claims court and pay the fee for a claim under £1000 and then in my particulars ask for compounded interest taking the claim to £47k with a caveat that says in the alternative, if the judge disagrees to my compounded claim then I'll accept statutory interest at 8%???

 

Cheers,

 

1970.

[overflow]

Hi 47k would be nice but have you got the interest rate fight. should it be 28.5% which would be more realistic.lol

If youve sent the prelim and the LBA and had no response to them then yea id say go for it.

regards

[1970]

Hi,

 

The rate is correct at 285% as it is a loan shark who doesn't perform credit checks and requires security. Worse than a pawnbroker. Disgusting in fact.

 

Therefore, a £20 charge becomes £5890 with interest from June 2005 until now.

 

;-]

 

 

1970