WEST BROM claim for early redemption interest

[njtkc]

3yr tie in finished Jan 02, so for the sake of 4 mths we had to pay £2,518.50 or they wouldn't release the deeds, we had our house on the mkt and sold, didn't want to loose buyer so moved in with family whilst looking for a house. They wouldn't refund it unless we had another mtge with them, but we didn't need one and they wouldn't mortgage a building plot thats what we bought.

At the time I offered them the 4 mths payments we would have made and could they refund us the rest but they wouldn't budge. Now it's time to go for the lot, thanks you guys out there.

prelim letter being sent 17th August.

[THEVARNSTER]

I hate redemption penalties. I am going to sell a property (£4600) redemption on £85,000 mortgage. Let me know how you get on.

 

 

Good LUCK

[njtkc]

No probs...will update this thread, but don't hold out hope for a couple of weeks.

[njtkc]

STD Letter recv'd, as expected, quoting usual customer relations jargon and coping the T&C for early repayment, seen another thread detailing success of claim for their charges so using the element that they thought clinched it and will let everyone know.

[alans]

Hi, I have recently had to pay £11,000 erf to UCB and would love to find a way to retrieve it. Sounds as though some of you guys out there are a few moves ahead of me. Would greatly appreciate advice as to where best to begin??

alans

[njtkc]

This is what I've done...

read lots of threads and got a feel of the mtge co reaction.. threads from

gizmo111----first successful ERC claim and read link to google groups uk finance

barracad--- barracad 'v' GMAC and link to OFT

Firstly sent a letter based on the prelim letter for normal bank charges and had a very standard letter showing the T&C and my signature.

Today I've written using the thread I found with the following and copied it to my word file but can't find the link to the thread so I don't know who wrote it ?

.............................

This is the part of my letter that I think clinched it:

We were contracted to stay in the mortgage for 5 years, but had to cancel 2 months short of the deadline and subsequently had to pay early redemption charges, which we now feel were excessive and unfair. In Common Law you can only recover liquidated losses stemming from a breach of contract - that is, money which it has actually cost you to end the contract early.

 

To quote The Govan Law Centre: "[bank] charges represent a penalty and are therefore irrecoverable at common law. In the Scottish 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. This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd [1915] AC 79."

 

As we were only 2 months from the end of our contract we feel that the losses that you incurred were well below what you actually charged us.

 

Therefore, we request that you refund the following to us:

......................................

I'll keep my thread updated.....when I get an answer, it is my intention to give then 14 days and then use the LBC letter as for bk charges. they've got 14 days and counting.

[njtkc]

recv'd reply from executive.... explaining in detail how they priced the product and how I had made a good decision on choosing it and how they calculate the penalty, the mortgage rate proved to be below the LIBOR rate throughout the term...etc etc But he used the calc over 2yrs and mine was 3yrs so justification argument not correct ha! ha!

writing back to request a full breakdown of cost in order fro me to be reassureed that the penalties reflect their actual costs...and put no refund then letter before action.....just going to check any new threads before I write letter....

[njtkc]

found just what I needed on zootscoot.....halifax settled in full

won't be able to use all of it but some excellent phrases and case studies to quote. I will be sending it 2morrow so will update again soon.....they will have 14 days from receipt or lba will start.

[zootscoot]

Best of luck!

[paddym]

good luck !

[njtkc]

They received the letter on the 7th Oct so waiting 14 days and LBA letter ill be on it's way....21st here we come...preparing lots of facts for this one.

[njtkc]

I even left it until they'd had my letter 14 days.....today's the day still not even an acknowledgement and it's done LBA being sent recorded delivery 2morrow 24th....... I'm giving them until frid 3rd 11 days and sent them LAA letter (thanks Zoot) just to remind them and also delay a bit cause I'm on holiday for 10days the following week. if nothing when I return - then off to court we go and more lovely .....££££££'s

[njtkc]

I'VE HAD A REPLY-----it seems they replied to me on the 9th Oct but I never got it. basically saying NO. But I am going to type it below and PM a MOD for help.

Thank you for your letter dated 4th Oct, I do understand your concerns regarding the level of your early repayment charge. i can assure you that before we launch a product we run through many product models to ensure that-

 

Our products are competitively priced.

We do not make a loss on the transaction.

 

If a customer repays their loan before the end of fulll term, we try to calculate a fair early repayment charge with a view to balancing the interest of our members as a whole. I can assure you that the fee that we charged was calculated on the basis that it was a genuine pre-estimate of the loss that we believed that we would incurr if a customer repaid their loan before the end of the agreed mortgage term.

 

As indicated in previous correspondence there is no evidence to suggest that we have unduly profited from your mortgage by charging an early repayment fee.

 

Upon examining your file, it is evident that the Society offered a selection of various products at the time that you took out our loan and you selected a fixed rate product which had an early repayment charge. The extent of that charge was clearly described in our advertising material, your mortgage offer and reference to the charge was also made in your mortgage conditions. the charge was not hidden in small print it was clearly stated, transparent and you signed to say htat you fully accepted those terms. As your acceptance of offer was signed your solicitor would have also explained the extent of the charges to you.

 

I note with interest your reference to the Unfair Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999. I cannot find any evidence to suggest any breach of those regulations or the Common law. A liquidated damage clause is based on a genuine pre-estimate of loss and I beleive that the charge was based upon a genuine pre-estimate of loss. I am sorry if I did not make this point clear in my previous letter.

 

As indicated in my earlier correspondence an alternative is to calculate the precise cost of termination at the time of repayment using mark to market rate method. This method had beed held as unfair because it is not transparent and customers could be hit by a very high repayment charge. The Office of Fair Trading has indicated that where a loan had a fixed rate of interest of five years or less the redemption fee should be capped at five percent. For loans with a longer fixed rate, the cap will be seven percent. Against this background, I am confident that your charge is within acceptable guidelines.

 

The Society prides its self upon offering value for money producs and services. The fixed rate that you selected provided you with significant savings over the period that you had the loan.

 

In conclusion, I beleive that our charges are fair and justified under the current law.

 

This is the Society's final response. However, if you remain dissatisfied with my decision, you may refer your compalint, within six months of the date of this letter to

The financial Ombudsman Service.

 

I have enclosed a leaflet.......Yours sinc Lee Cruickshank Executive

 

 

Can someone give me any guidance on reclaiming ERC I'm having a panic day......."am I really going to court" more importantly CAN I WIN?

[njtkc]

PM bankfodder and zootscoot.....both said go for it keep to deadlines and don't throw empty threats......what you say is what you do.....so when deadline finished off to court I go. looking at info from google uk legal , intersting stuff, talking back as far as 1996....1999 seems some people were trying before us. But can't find anyone that's won through the court.......anyone got any info apart from us on this site?

knowing my luck ............... West Brom will take me all the way there.........

and turn up.