abbey mortgage early redemption penalty?

[tamadus]

Juli, Thats exactly the same letter I got from them following my prelim, give or take minor variations like your name, amount etc lol.

 

The interesting point in it is that they are admitting that they expect us to compensate them for their business decisions of cutting the interest rate slightly to attract our business. The other thing that comes to mind is they are actually trying to prevent resposible lending/borrowing by penalising the consumer for paying a loan off early. So much for their responsible lending policy.

 

I replied immediately to this letter by sending a 14 day LBA and had no response back yet. I issue a claim on tuesday bang on schedule.

[GraemeC]

And exactly the same as the letter my girlfriend received from Std Life....

 

Its just a total fob off letter 'We think they're fair and are calculated blah blah blah...." but with no real substance.

 

Why have they not provided the breakdown of cost incurred due to you redeeming early which you asked for? Only answer is that they are nowhere near what you paid.

 

Go ahead with the court action (ignore FOS, just gives them more time to tstring it out in the hope you will lose interest and go away)

[JULI99]

Lose Interest When There Is £10000 At Stake.

 

I Should Coco.

 

 

Juli99

[tamadus]

Just over 2000 in my case Juli, a pifling amount compaired to yours but thats my holiday money I was saving in the Bank charges savings fund;) Have no fear I will be on moneyclaim Tuesday evening

[JULI99]

Good Luck I Won't Be Far Behind. Lba Going Out Monday.

 

Juli99

[tamadus]

Thanks Juli I issue on tuesday and hope ot make another donation in about 2 weeks

 

Good luck with yours

[JULI99]

just got round to writing my lba and was wondering if i could pm some one just to make sure i am doing the right thing.

 

juli99

[paulpb123]

You're welcome to pm me but you will get the benefit of many others if you just post it on here and xxxxx names, account numbers etc.

Paul

[tamadus]

Go for it Juli, I issued last night in the end after giving them an extra couple of days to reconsider ignoring my LBA but they still ignored it, they should realise by monday that I am serious

[JULI99]

Just about to issue. Could I ask, when claiming a joint mortgage can you use the mcol "account" that is in one persons name or do we have to set up a separate "account" that has both our names on.

 

juli99

[dolly]

I put it in joint names: "Mr P and Mrs D Dolly" and it was fine

[JULI99]

Hi again, had a bit of a bad time recently so not been up to doing anything too technical. Only just got round to filling in my N1 form. On Particulars of Claim I've put

 

We are claiming the return of money taken by the defendant in the way of a redemption penalty charge on xxth month year from account no xxxxxxx. This charge relates to our breach of contract in that we terminated the contract before the agreed period. The defendant's charge for our breach is a disproportionate penalty and therefore unenforceable as it is contrary to common law as established in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. Further, as a disproportionate penalty it is invalid under the Unfair (Contracts) Terms Act 1977 s.4 and under the Unfair Terms in Consumer Contracts Regulations 1999. Para.8 and sch.2(1)(e). We have repeatedly asked the defendant to justify their charges but they have declined to do so.

In the case of Castaneda and Others v. Clydebank Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords held that a contractual party can only recover damages for actual or liquidated losses incurred from a breach of contract as oppose to a charge which represents a penalty. This law was confirmed and upheld in Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79. A charge will be held to be a penalty if the sum stipulated for is extravagant and unconscionable in amount in comparison to the greatest loss that could conceivably be proved to have followed from the breach. A penalty clause is void in its entirety and unenforceable.

Attached is a copy of the redemption statement, in which it clearly states that there was a penalty period of xx days and an xx day penalty period, resulting in charges of £xxxx.xx and £xx.xx respectively.

As clearly stated these are penalties and therefore are void in their entirety and unenforceable..

 

We claim interest under section 69 of the County Court Act 1984 at the rate of 8% a year from date to date of £x and also interest at the same rate up to the date of judgement or earlier payment at a daily rate of £x.xx

 

Does this look ok. Do I attach the copy of the redemption statement.

 

Don't want to make any mistakes on this one.

 

juli99

[JULI99]

Quick update as I have been off line for a couple of weeks.

 

Issued just before christmas and recieved letter back saying defendant has filed an Acknowledgement of Service, they have until 25th January 2007 to file their defence.

Still wondering how they are going to say this charge was not a penalty when they clearly state on their Details of Product Related Charge Statement that it is.

Total Claim with 8% interest came to just under £15k.

 

juli99

[GSMGuy]

Chin up Juli, and keep us updated, I am reading this with interest, as just about to remortgage from Rooftop to Britannia, and rooftop are charging almost £9000 ERC....

 

Mike

[JULI99]

Thanks, I always have my chin up.

 

JULI99

[TUTTSI]

Good Luck with your claim Juli, I hope they pay out quickly.

We are just about to start on our old Mortgage files, so watching yours with great interest.

DS

[TUTTSI]

Chin up Juli, and keep us updated, I am reading this with interest, as just about to remortgage from Rooftop to Britannia, and rooftop are charging almost £9000 ERC....

 

Mike

Hi we are with Rooftop presently and if we were to change lenders we would have a vast £18K to consider and they have rooked us with all sorts of charges. But we intend to have these charges squashed in time so ROOFTOPS watch out.

DS

[Fullyskinted]

Hi guys, I am just about to send a letter to Abbey Re ERC charges. Do you have an appropriate address/contact to use?

Just to speed it up and not risk it going missing LOL

[Limana68]

Hi guys

I am in the same boat with Rooftop, we are going to be moving Mortgages to Abbey and they are wanting to charge us 8K redemption.............. !!!

 

Liz

[ginamaunder]

hi juli i am in the same posistion as you just waiting to hear back from halifax with their defence should hear next week, i am claiming £4000 i will keep you posted!

[JULI99]

Recieved copy of defence from DLA Piper today. reads like everyone elses defence. However please note when reading thru this I do have a copy of our "Details Of Product Related Charge" which clearly state that the early redemption charge bit is called a "Penalty Period"

1. Save as is specifically admitted in this Defence, the Defendant denies each and every allegation set out in the Particulars of Claim.

2. It is admitted that the Claimant has a mortgage account with the Defendant, reference XXXX ("Mortgage")

3. At all times the Mortgage has been subject to the applicable terms and conditions ("Conditions"), which form part of the contract between the Claimant and the Defendant and to which the Claimant agreed when he took out the Mortgage. The Defendant will refer at trial to the full Conditions.

4. It is admitted that there was a term of the contract, agreed by both parties, which made the Claimant liable for a charge in the event the Defendant chose to redeem the Mortgage early. This was a core term of the Mortgage referred to in Mortgage documentation as a product related charge ("PRC").

5. The Claimant chose to redeem the Mortgage early, and pursuant to the terms of the Mortgage, became liable to pay the PRC to the Defendant. The PRC was duly calculated in accordance with the terms and conditions of the Mortgage, and was paid by the Claimant, in accordance with his contractual obligations.

6. The PRC is the price which the Defendant charges when the Claimant exercised his right to redeem the Mortgage as such it is not an indemnity because it does not indemnify the Defendant against any liability it incurs to another person. Accordingly, to the extent that the claimant relies on Unfair Contract Terms Act 1977 ("UCTA"), it is expressly denied that UCTA applies to the PRC

7. To the extent that the Claimant relies on the Unfair Terms in Consumer Contract Regulations 1994 and 1999 ("UTCC") it is expressly denied that the UTCC apply to the PRC.

8. In the event that the UTCC do apply to the PRC then the Defendant contends that:

8.1 The UTCC stipulate that certain contractual terms may carry a presumption of unfairness

and could be subject to an assessment as to their unfairness because of their nature.

8.2 The UTCC state that an assessment of the fairness of any term shall not apply to terms

relating to the price of the product. The PRC the Claimant was required to pay was directly referable to the actual price of the product offered and as such the Defendant maintains that the UTCC does not apply and the terms are not subject to an assessment, nor does a presumption of unfairness arise.

8.3 In the event that the UTCC did apply and the even if the PRC was subject to an

assessment the PRC would not automatically be deemed unfair. The whole of the circumstances whereby the Claimant agreed to take out the Mortgage would be taken into consideration.

9. The Defendant contends that the following circumstances in which the Claimant entered into the Mortgage do not render the PRC unfair should the PRC be subject to an assessment under the UTCC.

9.1 The Claimant was aware of the terms of the PRC prior to entering into the mortgage.

9.2 The terms of the product were set out with sufficient clarity as to be clearly

understandable and with sufficient certainty so as to enable you to be aware at the outset of the amount you would pay on early redemption.

9.3 The Claimant would have been free to select other products which carry a lower PRC or

alternatively, to select a basic mortgage at standard variable rate which does not carry a PRC.

10. The Defendant contends that the common law of penalties only applies to sums of money that are expressed by a contract to be payable by a party in the event that that party breaches the contract and, since the Conditions did not expressly or impliedly oblige the Claimant to retain the mortgage until the end of the discount period, the Claimant's early repayment was not a breach of contract. Accordingly, the PRC cannot be deemed to be a penalty and/or unenforceable.

II. In addition, the PRC cannot be considered as a penalty, as it is a charge designed to cover the cost

to the Defendant of funding the product on early redemption. It is therefore calculated to compensate the Defendant over time and on average, for the cost of early redemption. Accordingly it is a genuine pre-estimate of loss suffered by the Defendant as a result of the Claimant's decision to redeem the Mortgage early, and, as such, cannot be deemed to be a penalty and/or be unenforceable

12. No admissions are made as to the amounts claimed by the Claimant and the Claimant is put to strict proof of the same.

The Defendant believes that the facts stated in this defence are true.

 

JULI99

[tamadus]

Juli,

 

Any chance of a copy of that 'Details of Product Related Charge document'

 

I'm sure the judge would like to read it

[JULI99]

Can send you a copy. PM me your address. I've no idea how you put it on email or how you scan it.

 

juli99

[Fullyskinted]

I think I have this when I got my reply from them. If I have Ill scan and host it on photobucket...

[JULI99]

Just getting round to filling in my Allocation Questionairre and was wondering if I could ask for my claim to be heard in the small claims track even tho claim + Interest brings it to over £14k. (I can but hope)

 

juli99