Harsh Letter received from Kensington *Claim struck out in court*

[gizmo111]

You might want ot use the following as zootscoot has written it and put in all the legal bits that they are asking for.

ACCOUNT NUMBER: XXXX

 

Request for repayment of charges

 

Dear XXXX,

 

 

Our request

 

 

We are writing to ask you to refund the charges which you have levied from our account in respect of late payment fees to the sum of £XXX , the sum of £XXX representing the contractual rate of interest applied by yourselves in respect of the said charges (Please find enclosed schedule of charges detailing dates, amounts and interest) and xxx in respect of a redemption fee. We now understand that such fees are unlawful at Common Law, Statute and recent consumer Regulations.

 

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. (You may want to add something here relevant to how the charge they levied could not amount to a genuine pre-estimate. This will obviously vary depending on the particular product and lender)

 

In addition your charges appear to represent an unfair term of contract which is contrary to the Unfair Terms in Consumer Contracts Regulations 1999 (SI. 1999/2083). Our account falls within the ambit of Regulation 5 of the Unfair Terms in Consumer Contracts Regulations 1999 as we are consumers. Your charges constitute an unfair penalty under Schedule 2 of the said Regulations which provide an indicative and non-exhaustive list of terms which may be regarded as unfair. Under paragraph 1(e) of schedule 2 this specifically includes terms which have the object of requiring any consumer who fails his obligation to pay a disproportionately high sum in compensation. We would vigorously contend that this is the position regarding the fee of XXXX which you deemed fit to apply to our account.

 

 

Furthermore a fee levied requiring us to indemnify you against any commercial risk to yourself in offering us a reduced interest rate in order to attract our cutom is also contrary to s.4 Unlawful Contracts Terms Act 1977. We are confident that a court is likely to consider this clause to be unreasonable within s.11 of the said Act as a large commercial institution such as yourselves is in a far better placed position than us as consumers to bear the burden of the vassitudes of business.

 

 

I would like to bring your attention to the following statement by The Office of Fair Trading:

 

"A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations. A redemption charge may be regarded as a penalty even if it is expressd as the price for exercising a right rather than a consequence of breaking the agreement."

 

We believe that the charges you have levied of XXXXX for late payment, return of debit fees and early redemption far exceed any true cost to yourself as a result of our breach and any genuine pre-estimate you could conceivably reach. If you disagree, then will you please demonstrate this by letting me have a full breakdown of the costs to which you have been put to as a result of our breaches, in order to reassure us that your charges really do reflect your costs.

 

Your responsibilities

 

 

We would draw your attention to the terms of the contract which you agreed to at the time that we took out the loan. It is an implied term of that contract that you would conduct yourselves lawfully and in a manner which complies with UK law.

 

We are frankly shocked that you have operated our account in this way as we had always reposed confidence in your integrity and expertise. We consider that your repeated representations that your charges are fair and reasonable are deceptive and that they have deceived us into agreeing to pay them. Your concealment of the true nature of your charges has prevented us from asserting our rights until now.

 

 

Our targets to resolve this matter

 

We really hope that this matter can be resolved amicably and without the need for redress to the courts. Thus we are asking that you refund the charges which have unlawfully been levied on our account. Failure to refund all the money unlawfully taken from us will result in us taking further action. We will give you 14 days to reply accepting, unconditionally, our request in principle and letting us know a date by which we will receive payment. If you do not respond, or you do not respond positively, within this time period, we shall send you a letter before action giving you a further 14 days in which to reflect. We believe that these targets are more than sufficient for a large company such as yours with dedicated staff and departments.

 

After that, there will be no further communication from us and we shall issue a claim at the expiry of the second deadline. Thus take this letter as 28 days written notice of our intention to issue a court claim should you not comply with my request. I hope that you will enter into a sincere dialogue with me about this matter and I am writing this letter to you on the assumption that you will prefer to do this than merely respond with standard letters and leaflets.

 

Yours faithfully,

 

XXXX

 

 

Hope this helps

 

Best of luck

 

Zoot

 

 

[gizmo111]

Hi Jamorgan,

 

There is nothing of any real substance in the defence, simply denial without reasons.

 

It refers to counter claim, Have they submitted a counterclaim? You don't seem to mention this part? If they have submitted a counter claim you have 14 days to respond to this and will need to submit a defence.

 

You will need to address the issue regarding your husband also.

 

All the best

 

Zoot

 

Does it have to be issued in joint names - even if you are seperated?

[gizmo111]

Is he aware of the claim?

 

In a cider enhanced sort of way

[gizmo111]

lol...seriously tho if it was a joint account you may well need his permission to proceed and split the payout... unless of course it was you alone that paid it.

 

Yes it was me that paid it - it is part of a remortgage - that was then transferred into my sole name.

[gizmo111]

Sorry to jump in here - but do we think now that all claims on joint accounts should be issued in joint names? Not a problem if that is the case - would just rather not.

[gizmo111]

AFAIK The costs under the contract is stupid as the contract no longer exists.

Don't forget this :

 

I would like to bring your attention to the following statement by The Office of Fair Trading:

 

"A term in a mortgage agreement which requires the borrower to pay more for breaching the contract terms than actual costs and losses caused to the lender by the breach (or a genuine pre-estimate of that) is likely to be regarded as an unfair penalty and to be unenforceable both at common law and (in a consumer mortgage) under the Unfair Terms in Consumer Contracts Regulations. A redemption charge may be regarded as a penalty even if it is expressed as the price for exercising a right rather than a consequence of breaking the agreement."

Have you a full hearing on the 19th

[gizmo111]

Good Luck for tomorow morgy.

[gizmo111]

Morgy,

 

Sorry to hear what happened - I am sure zoot and others wil lbe along with advice later. Was this fast tracked and do you feel up to posting more details.

 

Regards

[gizmo111]

Night Morgy,

 

I'd sleep on it if I was you and see what advice and support tomorrow brings.

 

Regards

[gizmo111]

Hi Morgy,

 

I would get the full transcript - can you afford this at present.

As Mrs Foot says if you need someone to come wit hyou let me know - I am just over bridge in Bristol - wish I had realised earlier in the week and at least you would have had some support.

 

Warmest wishes

[gizmo111]

Hi to all ,

How are you all doing,can't wait to get the ball rolling again but awaiting on the bloody transcipt.

Thanks again for the comments and support some fantastic people on this site with the lovley kind words and thoughts people post to me and others you are all truley wonderful people.

Shall I still hang on for the transcipt before writing a letter of appeal (which i'm sure you will help me with because i havn't got a clue what to say)

Do we all think this is the right thing to do?

M x

 

How long will the transcript take - cos you now only have a week left - maybe start the letter and fill in the case law etc, and then personalise it to the transcript- I beleive rbears said he would help also - just my thoughts .

[gizmo111]

Will ring transcript lady tommorrow and chase,

Could somebody please help me with an appeal letter, if possible

sorry to call on you guys but really need the help

 

thanks x

 

Post your transcript when you get it morgy and you wil lget plenty of help, which you are more than welcome to.

[gizmo111]

Hi All,

 

Had a loan with Associate now (Furture Mortgages aka Citi financial group) for 5years but decieded to repay it 2years into the agreement following a remortgage. I got heavely stung with early redemption charge, sealing fee, redemption fee the lot. So I decieded to send off a copy of Zootscoot's request for repayment of charges letter found in the libary on 6th January 2007 and like other people on these threads I have recieved a "fob off" response on 23rd January 2007 as follows: please help!

 

RE: COMPLAINT

 

We thank you for your letter of 12th January, the contents of which are noted.

 

We do not accept your claim that the charges are either unlawful or unenforceable either for the reason you state or for any other reason. The recently released Office of Fair Trading report "Calculating fair default charges in credit card contracts" was issued after an investigation involving submissions from eight of the leading credit card issuers. However, the contract that is the subject of your claim is a mortgage, which is an entirely different kind of financial product from a credit card. In addition redemption and sealing fees are not charges for breach of contract, and are outside the scope of the OFT Report.

 

In any case the OFT stated that its finding was merely "a statement of [its] position and reflect[ed] the exercise of [its] discretion as an enforcement agency." It went on to say, " Only a court can decide finally whether a term is unfair or at what level default charges should be set to meet the requirements of the UTCCRs." Based on the evidence it received from the credit card issuers, the OFT established a threshold of £12, beyond which its "presumption will be that credit card default charges set above this level are unfair unless there are exceptional factors that legally justify the higher charge." Whilst the OFT's report is confined to default charges in relation to credit cards, it stated that it expected the general principles to be applied to other kinds of financial product, including mortgages. We do not accept that this equates to a blanket application of the same £12 threshold to cases other than credit cards, and that a different figure would be likely to be arrived at, based on the higher costs involved in managing mortgage arrears.

 

We do not accept your claims that, on the strength of the matters stated in the OFT Report, the charges applied to your account are either unlawful or unenforceable, or that you would be entitled to recover these charges in whole even if (which is not admitted) they were held to be a penalty. It seems undisputed that you breached the contract on each occasion a charge was levied. The law allows us to charge an amount that reflects the reasonably foreseeable costs of the breaches.

 

We note that you rely upon the Unfair Terms in Consumer Contracts Regulations (1999) "UCTCCR" and the Unfair Contract Terms Act 1977 as the legal rationale of your claim. Paragraph 8(1) UTCCR 1999 states that "An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer." Para (2) provides that "The contract shall continue to bind the parties if it is capable of continuing in existence without the unfair term." Schedule 2 identifies terms that may be unfair including at (1)( e) "a term requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation."

 

We consider that-your argument-t-hat-thefees-you have been charged fall foul of Schedule 2 1 ( e) is wrong. On a true construction of both the Regulations and the OFT Report it is clear that we are not constrained by the £12 figure that the OFT has laid down in respect of credit cards because of the different nature of the account that is the subject of the proceedings. Equally, your argument that the charges are totally unenforceable is misconceived in law. The law does not preclude a lender from imposing charges that reflect the reasonably foreseeable costs of the breach. It will only disallow those that are clearly a penalty on the defaulting party (see Jobson v Johnson [1988] 1WlR)

 

We also consider that we have satisfied the tests of reasonableness imposed both under section 11 Unfair Contract Terms Act 1977 and by the High Court, per Coleman J in Lordsvale Finance Pic v Bank of Zambia [1996] QB 752, 762G in relation to our default fees policy. We retain in place an infrastructure involving staff, computer systems and other administrative tools in order to operate an effective collections function based on reasonable assumptions about the number of defaulting customers in any given period.

 

We believe you have both misunderstood and underestimated the true cost to the company of even a single breach, since an infrastructure in staff and other resources with resulting overheads is essential for commercially viable operations.

 

We therefore confirm that we do not propose to remit the sum claimed or any sum at all to you and reserve our rights to recover any and all sums due by due process of law.

 

Yours sincerely

 

 

 

 

Hi ell,

 

Can you please start a new thread so we can follow your story,and was this a loan under £25k, and please post the letter you sent and their reply. Thankyou.

[gizmo111]

It is good news in the papers for those who have paid exit fees - but we are claiming ERC's which are totlaly different.

[gizmo111]

Bona I shall do that hun, cheeky buggers

 

Yes - you make sure you do

 

Just recieved the transcript and will have a look over that and relive the nightmare of that day

 

The end result was not good , but just think about how much courage it took to be there - you did really well and I for one am proud to be here fighting with you

 

I am really in a pickle about the paypal thing and donations that people have supportedly said they would contribute but

Do I set an account up and ask for help or not ??

I know I need the help and it is hard to ask for people's help when they have very little money themselves to give

What shall I do ?

Whats people's thoughts ?

 

It could have been anyone of us Morgy - I have donated to Maroon fox and I will to you. I couldn't do his by paypal (computer illitrate but I have sent chq today ). People have offered and want to help you - don't be too proud to accept and end up carrying this outrageous bill by yourself.

 

shall I wait and see if we can get the fighting fund off the ground

Help!

X

 

As I understand it the fighting fund is aimed at a class action - we need to help with individuals costs before that can be explored and acted on or put to bed. You need help regardless of this decision. Obviously this is an individual choice and not something recommended or endorsed by CAG.

 

Anybody wants to see the transcript let me knowand I shall e-mail

I think this is ok to do. Is it?

 

I see absolutely no reason why this is not ok, and thankyou for sharing it with us.

[gizmo111]

My thoughts are if you are appealing the the jdgement is in dispute anyway, and could be overturned, but this is costs awarded on their indemnity so even if you win the appeal you could still be liable for their costs?

Dunno how best to advise you here - hopefully zoot will. No doubt she will be along later.

[gizmo111]

Don't ever pay a broker Morgy - have a look at Birmingham Midshires, GMAC etc if you still need a sub prime loan? Search for adverse credit mortages and get quotes from non charging brokers.