Barclays rejects bank charges refund due to six year statute of limitations / statute barred

[hacksaw]

Hi All,

 

I sent Barclays the letter template I found on this great website on 24th August 2009 to claim back unfair bank charges and I received a reply this morning. They refused to refund me a returned cheque charge (£30) on a closed account that was deducted from it in November 2002. Here is the exact wording of their letter:

 

Dear Mr XXXXXXXXXXXXX

 

I am sorry you have had to contact us about the charge applied to your account in November 2002. Thank you for taking the time and trouble to do so.

 

As it is over six years since the fee was applied to your account, I regret that we are unable to proceed with this claim.

 

It is reasonable to expect customers to raise an issue within a reasonable time, after the event has taken place. By posponing making the complaint at this late time, our position has been prejudiced and the level of any investigation could have been compromised. Where a complaint relates to an alleged breach of duty outside the last six years, it is considered time barred under the statute of limitations.

 

I am sorry that this is not the answer you were looking for, but I hope my explanation is helpful.

 

I hope I have answered all your concerns. If you would like to talk about this further please call Customer Relations on 0845 6090806. I will keep your complaint file open for 8 weeks so you have time to consider my response. If I have not heard from you by then, I will regard your complaint as closed.

 

Our aim is to resolve all complaints internally, although we recognise this may not always be possible. If we are unable to agree a way forward you may be able to ask the Financial Ombudsman Service to review your complaint. We will help you if you would like to do this; however, I hope we can resolve matters for you before you take this step.

 

You can find more information about how we deal with complaints and the Financial Ombudsman Service in the leaflet enclosed.

 

Once again I am sorry for the problems you experienced, than you for letting us know.

 

Yours sincerely

 

 

Customer Relations Advisor

 

Enc: Complaints leaflet

So Lowell can send me debt collection letters for a statute barred Barclays overdraft and even say in their letter "this debt is not going to go away" which is misleading and deceptive because six years have elapsed, but when you claim bank charges from Barclays, they say statute barred.

I'm going to send them a letter informing them about the FSA waiver's conditions (of which Barclays is a signatory) that, in effect, says that the clock stopped on 27 July 2007 (the start of the test case). I found this from the following link:

 

Unauthorised overdraft charges : FSA Money made clear ? News

 

My letter would go something like this:

 

 

Your Reference: XXXXXXXXXX

 

Dear Sir/Madam,

 

Thank you for your letter dated XXXX September 2009 regarding a claim for a refund of a returned cheque fee debited from my Barclays Current Account.

 

I would like to draw your attention to the Financial Services Authority waiver, of which Barclays Bank plc is a signatory.

 

One of the conditions of the waiver is that complaints will not be time-barred (under the Limitation Act 1980). The Financial Services Authority have already stated that the clock, in effect, stopped on 27th July 2007, the start of the test case on bank charges. As the charge was debited from my account on XXXX November 2002, only four years and eight months have elapsed between November 2002 and July 2007, less than the six years indicated by the Limitation Act 1980.

 

You have seven calendar days to accept, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If I do not hear from you within seven days, or you refuse to accept, unconditionally, my request in principle for a refund, I shall issue a County Court Summons against you. You will be liable for all costs incurred plus Statutory Interest, applied at a rate of 8% per annum from the date of the debit of the charge.

 

 

Any suggestions will be greatly appreciated.

 

Thank you very much.

 

hacksaw

[slick132]

Hi Hacksaw,

 

Even if Barclays reply saying they accept the charge is NOT statute barred, you'll still have to file at court to reclaim it.

 

By all means, wait for their reply but, unless they agree to refund as a goodwill gesture, file a claim at court for this as soon as your deadline for their response expires.

[hacksaw]

Thanks slick

 

I just realised that my reply letter above is a really bad idea, i'm in effect shooting myself in the foot by saying (and admitting) that the cause of action started in November 2002. I just read the FAQ entitled "IMPORTANT Things You REALLY Need To Know - Updated to reflect the OFT court judgment -j" and it says that the cause of action starts immediately, so copying and pasting some parts of this FAQ (if thats OK with you), I think I'm going to say something in the lines of:

 

Your Reference: XXXXXXXXXX

 

Dear Sir/Madam,

 

Thank you for your letter dated XXXX September 2009 regarding a claim for a refund of a returned cheque fee debited from my Barclays Current Account.

 

I would like to draw your attention to s.32 (1) (b) of the Limitation Act 1980 which says:-

• (1) .... where in the case of any action for which a period of limitation is prescribed by this Act, either-
  
  • (a) the action is based upon the fraud of the defendant; or
    
  • (b) any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or
    
  • © the action is for relief from the consequences of a mistake;
    

  the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it....

The Office of Fair Trading by their investigation has announced that at least all charges more than £12.00 are unfair in that they are most unlikely to represent the true costs of a breach of the banking contract.

They have based their conclusion upon evidence provided by the banks and by their own research. Therefore I can reasonably conclude that Barclays Bank must have known this all along.

It seems quite reasonable to infer that Barclays Bank must have concealed the information and therefore the cause of action and that this has been done deliberately.

You have seven calendar days to accept, unconditionally, my request in principle and letting me know a date by which I will receive payment.

 

If I do not hear from you within seven days, or you refuse to accept, unconditionally, my request in principle for a refund, I shall issue a County Court Summons against you. You will be liable for all costs incurred plus Statutory Interest, applied at a rate of 8% per annum from the date of the debit of the charge.

 

thanks once again

hacksaw

[yourbank]

Hacksaw this is a breach of the FSA Waiver on Bank Charges so I think as you have written confirmation please email: centralwaiversteam@fsa.gov.uk and make them aware you have the letter in writing if they would like a copy of it.

[hacksaw]

thanks yourbank.

will do.

[hacksaw]

Hi all,

 

I've sent my 2nd letter above three weeks ago, and therefore given Barclays an extra week because of the postal strikes. If I don't get a reply this morning (Monday) then I will have to file a claim.

 

I have a few questions before I proceed with my claim:

 

1. I sent my 2nd letter to customer services in Leicester instead of Barclays registered office (though 1st letter I sent it to reg. office). Is that OK? The reason I sent it there was because the reply to the 1st letter was from Leicester.

 

2. Could I claim the cost of recorded delivery for the 2 letters and travel to the court (cannot use MCOL because I don't have to pay court fee)?

 

Thanks.

hacksaw

Edited September 28, 2009 by hacksaw
Added to question 2

[slick132]

Hi Hachsaw,

 

1. If your wrote to the office they replied from, that's fine. However, you must use the Churchill Place address when filing your claim.

 

2. You can claim the costs of postage.

 

If you want to claim for other costs, see here - http://www.consumeractiongroup.co.uk/forum/lloyds-bank/65921-application-costs-updated.html

[hacksaw]

thanks slick

 

I filed the court papers yesterday, which were accepted by them.

 

The POC would not fit on the PDF file, so I wrote continued on the PDF file and on the next sheet I put my name, date and signature (Statement of Truth) in addition to the POC.

 

At first they were going to stay the claim, but then I said to them "Oh, but other people have successfully claimed from the banks, Barclays might admit the claim" Then the lady asked her manager and said something like "That's fine, I asked my manager and she said because its based on a mistake we'll accept that."

 

Thanks very much for your help slick. Let's hope Barclays pay up instead of defending the claim. After all, its only £30 and they have billions!

 

Best regards

hacksaw

[slick132]

Experience suggests they won't have the sense to refund, and will file a defence.

 

The court will impose a Stay on the claim further down the process unless the OFT test case appeal is resolved beforehand.

 

[hacksaw]

Hi

 

I received a defence notice from the court on Friday morning. I'm going to fill in my allocation questionnaire and send it to the court in the next couple of days, as its quite straightforward. However one of the paragraphs of their defence really caught my attention:

 

It is averred that the said charges and interest are and remain lawful and enforceable and that the Defendant was entitled to debit the same. In the alternative if (which is denied) the said charges are unenforceable and consitituted a breach of contract by the Defendant, those charges which were applied to the account prior to XXXX [six years before my claim issue date] are not recoverable because they are time-barred under the terms of the Limitation Act 1980 in that more than six years have elapsed since the accrual of the cause of action.

I thought they weren't allowed to do that under the terms of the FSA waiver? I already complained about Barclays to the FSA Central Waivers Team when they sent me their first letter saying its statute barred, and I was thinking of doing the same now. Any ideas?

[slick132]

It's up to you if you want to make a further complaint.

 

I'm not sure it will help your claim though, and this is what you should focus on.

 

[hacksaw]

Yes you're right, FSA probably won't do anything anyway. Thanks.

[hacksaw]

Hi,

 

I received a letter from Barclays a few days ago, warning me that if I do not withdraw my claim they'll apply for an application to strike it out.

 

I have to admit that I used the old POC's in my claim, and as you already know, more than 6 years have passed between the charge and the claim. I am worried that if Barclays succeed in their application to strike out, or I lose at the hearing, Barclays might apply for an application for costs. I know that its unlikely that the judge will grant them an entitlement to costs, but what if the judge believed that I acted unreasonably, in that I continued with the claim all the way to the hearing, especially when Barclays gave me a chance to withdraw my claim? The Reward to Risk ratio is very poor, as I could either stand to gain £30 if I win, or possibly lose hundreds of pounds if I don't.

 

Sorry for the very long post, but I've included three pieces of information:

 

1. My POC's

2. Barclays' defence

3. Barclays' letter (March 2010)

 

My POC's:

 

The Claimant had an account xxxxxxxx ("the Account") with the Defendant which was opened on or around xxxxxxxx and closed on or around xxxxxxxx.

 

1. The account was conducted on the basis of the defendant’s own standard terms and conditions.

 

2. At all material times the Claimant was a consumer and the Defendant was a supplier within the meaning of the Unfair Terms in Consumer Contracts Regulations 1999

 

3. During the period in which the Account was operating the Defendant debited a charge to the Account in respect of an alleged breach of contract on the part of the Claimant.

 

4. Alternatively the charge was levied in respect of a purported service provided by the Defendant and related to a returned cheque.

 

5. The charge was levied on the basis of certain purported contractual terms which apparently permitted the charge to be made.

 

6. The charge was debited from the Claimant's bank account on xxxxxxxx and is shown on the Claimant's bank statement under Description as "Charge for item returned unpaid" and under Details as "Transaction Charge 1 item(s) at £30.00."

 

The Claimant contends that:

 

Insofar as it may be a penalty, the charge debited to the Account is punitive in nature; is not a genuine pre-estimate of cost incurred by the Defendant; exceed any alleged actual loss to the Defendant in respect of any breaches of contract on the part of the Claimant; and is extravagant and unconscionable in amount in comparison with the greatest loss that could conceivably be proved to have followed from the breach, but instead act in terrorem to ensure contractual compliance and to deter a breach on the part of the Claimant. Insofar as it purports to be a service provided by the Defendant, the High Court and subsequently the Court of Appeal have held the services in respect of which the defendant has levied charges are subject to tests of unfairness under the Unfair Terms in Consumer Contracts Regulation 1999.

 

The purported terms imposing the charge levied by the Defendant are invalid under UTCCR because

 

a. They are contrary to the requirement of good faith.

b. They cause a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer in that:-

 

* Bank accounts have become a basic essential service

 

* The Defendant is a wholly dominant partner in a non-negotiable standard-form contract.

 

* There are a limited number of providers of banking services all whom exercise similar dominance over their customers in non-negotiable standard form contracts.

 

* These banks exercise a collective dominance in the market.

 

* The charges of all banks are highly similar in nature and in cost and so the consumer in general and the claimant in particular has no real choice between banking service providers and is forced to acquiesce to the charges.

 

* The charges exceed actual costs by several thousand percent

 

* They are applied unilaterally in a standard form contract without the possibility of negotiation

 

* The Defendant raises the charges or restructures its charging scheme at will without discussion with its customers

 

* The charges are of subsidiary importance to the customer in the context of the Banking Contract as a whole and would not influence the making of the Banking Contract.

 

* The customer had no means of assessing the fairness of the Charges at the time of entering the contract

 

* The charges reflect a markup of several thousands of percent on the costs of dealing with the claimant's "delinquency" episodes. This is an extraordinary markup for any UK business. The normal markup on the High Street is less than 100%.

 

* The Defendant operates its high level of charges in order to cross-subsidise other banking services which it provides to other customers at less than cost price - "free banking".

 

* The charges could be imposed repeatedly and interest at a higher rate could be charged on those accumulated charges

 

* The Defendant's charges structure depends upon the impecuniousity and vulnerability of its poorer customers to provide free-banking services for those in a better position.

 

* The overall charging regime operated by the Defendant is disproportionately applied to a minority of its customers, often those who are least able to afford it.

 

As established by the High Court and subsequently by the Court of Appeal (OFT v Abbey & 7 Ors) the customer would receive no service or benefit in return for the imposition of the charge.

 

In the premises the terms imposing the charges are unfair within the meaning of Regulation 5(1) and thus not binding on the Claimant under Regulation 8.

 

Accordingly the Claimant claims:

 

a) the restitution of the amout debited in respect of the charge of £30.00;

b) {Other costs such as postage, etc}

Barclays' defence:

 

1. The Defendant is entitled to charge the Claimant for unauthorised borrowings by reason of its standard terms and conditions. The Claimant accepted the same when the account was opened, including (in particular but without limitation) the following terms and conditions (which are summarised):

 

a. The Defendant's right to charge a "Paid Referral Fee" where the Defendant pays an amount (either by compulsion or election) which causes the account to become overdrawn - £30 per item (previously £25).

 

b. The Defendant's right to charge an administrative fee if any cheque, standing order or direct debit cannot be paid because of insufficient cleared funds in the account - £35 per item (previously £30).

 

c. The Defendant's entitlement, if the Claimant becomes overdrawn without an overdraft limit, to charge interest at the unauthorised borrowing rate on the excess balance.

 

2. The Defendant's standard terms and conditions give the Claimant a fair and transparent view of those terms and the charges applicable for unauthorised borrowings (including where the account is overdrawn without an overdraft limit or where the Claimant exceeds the authorised overdraft limit).

 

3. If and to the extent it is the Claimant's case that the failure to make necessary payments and/or failure to remain within authorised overdraft limits and / or failure to arrange an authorised overdraft constituted a breach of the terms applying to the account and that the contractual entitlement to debit charges from the Claimant's account constitutes a liquidated damages clause, the same is denied. The charges constitute payments the Claimant agreed to make by reason of the terms and conditions of the account and were consideration for the Defendant advancing credit to the Claimant, which the Defendant was under no obligation to advance. The Defendant was entitled to impose such charges and interest when the claimant incurred the overdraft.

 

4. Accordingly, it is denied that the legal principles relating to the liquidated damages clauses and penalty charges are relevant or applicable to the facts set out above. Further or alternatively it is denied that any such charges constitute unlawful penalty charges, or are in breach of the Unfair Terms in Consumer Contract Regulations 1999, or indeed any other provision.

 

5. Therefore, it is denied that the charges were unlawfully debited from the account.

 

6. If and to the extent the Claimant incurred charges on the account, this was caused by the Claimant having gone into overdraft without having agreed with the Defendant an authorised overdraft facility or to increase the overdraft facility and / or by the Claimant's failure to make payments to bring the balance of the account back into credit.

 

7. It is averred that the said charges and interest are and remain lawful and enforceable and that the Defendant was entitled to debit the same. In the alternative if (which is denied) the said charges are unenforceable and consitituted a breach of contract by the Defendant, those charges which were applied to the account prior to XXXX [six years before my claim issue date] are not recoverable because they are time-barred under the terms of the Limitation Act 1980 in that more than six years have elapsed since the accrual of the cause of action.

 

8. In the alternative, and without prejudice to matters stated above, if (which is denied) the said charges and interest or any part thereof are unlawful or unenforceable as alleged by the Claimant or at all, and the charges were a consequence of the breach of contract by the Claimant, the Defendant has nonetheless suffered loss and damage as a consequence of such breach of contract in allowing the account to go into unauthorised overdraft. Accordingly, in the event that the Defendant is unable to rely on its express entitlement to enforce the charges as set out above, it will seek to recover to the extent necessary such loss and damage as it actually suffered, which will not necessarily be limited to the value of the said charges, and the Defendant seeks to set off such sums against any liability owed hereunder to the Claimant.

Barclays' letter, March 2010:

 

Dear Mr Hacksaw,

 

I refer to your Claim Form, served on XXXXXXX in which you state you intend to claim back an unauthorised overdraft charge, citing Regulations 5 and 8 of the Unfair Terms in Consumer Contract Regulations 1999 (the "UTCCRs").

 

I consider that your claim is misconceived and for the reasons set out below, I do not consider that you have advanced any grounds on which your claim can succeed.

 

The Office of Fair Trading (the "OFT") and consumers have previously challenged unauthorised overdraft charges on the grounds that a) they constituted penalties at common law; and b) they are unfair under Regulation 5 of the UTCCRs, on the basis that they are too high. Following decisions in the case of Office of Fair Trading - v - Abbey National PLC and others, given by Mr Justice Andrew Smith ([2008] 2 All ER (Comm) 625 and [2009] 1 All ER (Comm) 717) and the Supreme Court on 25 November 2009 ([2009] UKSC 6), neither of these arguments is now open to consumers. Barclays' overdraft charges have been held by Andrew Smith J not to be capable of amounting to penalty charges; and the Supreme Court has confirmed that such charges are part of the price for personal current account services and so cannot be found to be unfair under the UTCCRs on the basis that they are too high.

 

Accordingly, on the basis of the claim that you have pleaded, it is clear that you seek to rely on legal arguments which have been considered and rejected by the High Court and by the Supreme Court. It follows that your claim must fail.

 

Moreover, as the Returned Item Charge was applied to your account on XXXXXXXX it is not recoverable as it is time barred under the terms of the Limitation Act 1980 is that more than six years have elapsed since the accrual of the cause of action.

 

I ask that by XXXXXXX you withdraw this claim. If I do not receive confirmation from you that your claim has been withdrawn by the close of business on that date, I shall proceed with an application to the Court for the claim to be struck out.

 

Yours sincerely,

Is it worth continuing with this claim, considering the above? I've also read Aequitas' thread about using s32 of the the Limitation Act 1980, saying that it will be of no assistance to bank charges claims:

 

http://www.consumeractiongroup.co.uk/forum/oft-test-case-updates/248391-32-limitation-act-bank.html

 

Thanks very much for spending the time to read this long post.

[slick132]

Hi Hacksaw,

 

Given the value of your claim, the complications because of the Limitation Act 1980 and the possible costs implications, I think you should let this claim drop.

 

I can see no reason to pursue it further and you have summarised the risk position well.

 

Letters to the bank and to the court should be sent accordingly.