Nationwide default notice

[mutzi]

I'm looking for opinions on how to proceed with this.

 

My sister has a nationwide account with an overdraft of £600. Some months ago she clipped her limit by a few pounds and incurred charges. She's paid in a little when she's had any money but not enough to bring it back under the limit. The current balance is £715.04. Deducting the charges and increased interest rate the balance reads at a little over £500.

 

Now a few weeks ago I wrote up a prelim letter for her to send to them to which she recieved the standard 'get lost' reply. I was just about to draft an LBA when a default notice dropped though the letter box demanding the entire balance by the 9th September.

 

She is currently unemployed (former student) and having still waiting for her housing benefit to be sorted out. She has an income of less than £50/week at the moment. She has no way of paying it off.

 

Now do we proceed with the LBA including the additional paragraph about the default notice as normal or let them take it to court and use the charges as a defence?

 

I have some other questions.

 

The default notice was issued on an account 'under dispute, can they do this?

 

The default notice seems wrong, perhaps it's not been updated with the terms. Also the stated term relates to actions by the account holder, not NW taking charges themselves.

 

Notice states:

...........

Provision breached: Condition 11

Nature of breach: Failure upon demand to immediately bring back into credit the balance....... has been created by the account holder by withdrawals or payments by the Flexaccount.

Now the nationwide T&C's seems to say:

 

Terms state: ( from http://www.nationwide.co.uk/pdf/current_account/P9292_FlexTermsConditions.pdf )

11. In normal circumstances, we will not close your account without

giving you at least 30 days’ notice.

....

49. If withdrawals or payments made from your FlexAccount create an

unauthorised overdraft, your account must be brought back into

credit immediately.

Is this a defence in itself?

 

Further with respect to credit reference agencies, I noticed there is actually no consent given in the T&C's by the customer for sharing of data with 3rd parties except for default notices and joint account associations. The other terms seem only to imply they may make searches with CRA's but nothing about sending them account information. Am I correct in assuming this is a breach of the DPA?

 

This is all I could find on CRA's in the terms ( same as above http://www.nationwide.co.uk/pdf/current_account/P9292_FlexTermsConditions.pdf )

50. If full settlement of any unauthorised borrowing is not made within

28 days from the date we issue a Notice of Formal Demand, we

reserve the right to register the account as “defaulting” with one or

more licensed credit reference agencies.

....

53. An ‘association’ between the joint applicants and/or any individual

identified as your financial partner, will be created at credit

reference agencies, which will link your financial records. This

association, and any others that either of you may have, will be

taken into account in all future applications by either or both of

you. This linking will continue until one of you successfully files a

‘disassociation’ at the credit reference agencies.

54. We may make periodic searches within Nationwide, at credit

reference agencies and fraud prevention agencies to manage

your account with us, to take decisions regarding credit, including

whether to make available or to continue or extend existing credit.

The searches will not be seen or used by lenders to assess your

ability to obtain credit.

 

This might be of use to a few NW customers around here

[mutzi]

Seems no one knows?

 

Anyway thought it through an I came up with the idea of tieing the issue of the charges and default into the repayment agreement. My letter so far:

Dear Sir/Madam

I am writing in reply to the recent default notice you have served on me in relation to my account [number]. I dispute the validity of such a notice on the following basis: Your default notice states the nature of the breach as:

“Failure upon demand to immediately bring back into credit the balance upon the above numbered FlexAccount upon which an unauthorised debit balance has been created by the account holder by withdrawals or payments by the FlexAccount”

Firstly the current unauthorised balance was created by your debiting of charges from my account. Any unauthorised balance created by my own use of the account has long since been been brought back within the limit.

Secondly these charges are unlawful in nature. I have already sent a preliminary letter to your member services department regarding this issue and have received an unsatisfactory standard response, evading the points put forward and wasting everyone's time. I am enclosing a copy of said letter and a schedule of charges for your convenience.

With respect to the remainder of the balance (approximately £500) I ask you to note that I am currently on state unemployment benefits and therefore have little to spare and no way of paying it off quickly. You may confirm this fact via my other FlexAccount [number] which is in receipt of such payments. I propose the following solution in order settle the balance:

• I will agree to pay you the token sum of £2/week which you may debit from my other account.(numbered as above.)

  
  

• I will not use the account to make any payments (note that it has already not been used for some time)

  
  

• You will return the unlawfully debited charges and associated interest to my account.

  
  

• You will remove the default entry from any register with which you have entered it. Please note that mere correction or amendment to the entry will not be acceptable.

  
  

• Please will you agree to freeze all interest as applied to the account in order that payments are not immediately negated by interest charges

  
  

• I will inform you when I manage to find work and have a greater income.

  
  

• At this point I will agree to increase these weekly payments to a reasonable level until such time as the balance is paid off.

  
  

If this proposal is acceptable to you in it's entirety, you may begin taking these token payments with immediate effect. Would you also please confirm as much in writing.

If you are not willing to accept such an arrangement then I leave it to you to take such legal action as you deem fit. Any claim issued by you will be disputed on the basis of the aforementioned charges and on the understanding that I am offering you what little I can currently afford. I will also issue a claim under the Data Protection Act 1998 for the removal of the default.

Yours sincerely,

Any vital improvements needed?

[dolly]

I will have a look at this tonight for you and get back to you.

[mutzi]

oh well we sent it anyway and got a response today:

 

Thank you for your letter.......

 

The overdrawn balance on your account on 11th of July was £624.20 and this is made up of funds taken from your account either in cash or by using you visa card. The remaining balance is made up of charges due to exceeding your overdraft limit of £600 and for direct debits that have been applied for and not honoured. I have now cancelled the direct debits.

 

[standard paragraph about T&C's that probably copied from they're 'NO' templates']

 

I have also contacted our customer care team who will contact you about refunding charges on the account. They will write to you with their decision.

 

The minimum payment I can accept per month is £10 and the interest could be frozen. To do this I will need you to fill in the attached statement of means and return it in the envelope provided. You will need to advise me when the payment will be made each month.

 

[phone number]

 

Your sincerely

A real signature.

 

Ok some confusion it seems here.

The balance was £624.20 on the 11th of July. So? Money has been paid in since then and some taken out. I should point out more has gone in than out, such that the 'real' balance is well under £600. The next sentance seem to me to imply that either theres only been about £90 of charges (over £200 by my count) or more likely that this person is trying say that the money in has been paying off previous charges only.

 

I can only assume this is some quite pathetic attempt manipulate the truth and validate the default notice, which is not mentioned once in this letter I notice. Perhaps in the hope that we might forget about it?

 

The next 2 sentances are equally confusing. No direct debit has ever been set up on the account. On checking the statement for last month there were 2 DD's for £5 taken out and immediately returned with 'correction' written beside them. This is obviously them messing up and paying someone elses DD. There were no charges applied for returned DD's either.

 

Why is the minimum payment they can accept £10/m and why using the phrase 'could be frozen' and not 'will be frozen'? I'll get my sister to fill in the statement of means, I image, since myself and others are constantly having to help her get enough together for bills etc that we'll end up with a deficit at the end.

 

The fact that they've passed the charges issue onto customer care is I believe an attempt to get a repayment arrangement in place before sending a standard 'NO' letter for the charges. They don't want this to go to court as they'll have to defend the charges so they are trying to seperate two issues which are obviously linked. If we agree to what they are saying, they'll get the money really owed back and settle out of court when we issue a claim for the rest.

 

The whole thing, while polite is written in a deceitful and evasive manner. I'm going to have some fun drafting a response

[dolly]

I would advise them that the account is in dispute due to unlawful charges and so, until these are refunded in full, I would not be making payment arrangements as it is highly probable that the outstanding amount would decrease significantly.

 

If they threaten to default her or close her account, they can be reported but I would need to look up the relevant sections for you.

[mutzi]

13th September 2006

Dear Sir/Madam

FlexAccount: 1234

Thank you for your letter dated 12th September. Please be so kind as to reply to all points raised, both those you neglected in my previous letter and those contained within.

From your reply:

"The overdrawn balance on your account on 11th of July was £624.20 and this is made up of funds taken from your account either in cash or by using you visa card. The remaining balance is made up of charges due to exceeding your overdraft limit of £600...."

The balance on 11th July was indeed £624.20. I fail to see how this is relevant since money has both been paid in and withdrawn from the account since then. Further the remaining balance (the current balance of £715ish minus £624.20) comes to [need exact figure]. Not including interest you have currently levied £190 in charges on my account. I can only assume that you are attempting to imply I currently owe over £600 and justfify the default notice which, rather strangely you forgot to mention. You are twisting the truth in order to justify the default notice regardless of the charges but are at the same time offseting some of the money paid in against these same charges. In any case no money paid in was ever intended to cover your charges and since your charges are still, in my view, unlawful and I will not be paying them until otherwise instructed by court order.

"...and for direct debits that have been applied for and not honoured. I have now cancelled the direct debits."

I have never paid anything by direct debit and so would be interested to know how you managed to cancel them. You have however 'corrected' two items you debited from my account last month, I presume instead of someone elses. I do hope you haven't cancelled theirs.

"I have also contacted our customer care team who will contact you about refunding charges on the account. They will write to you with their decision."

So you wish me to agree to repayment while awaiting their response? The amount due is in dispute. The bases on which you have demanded repayment and issued a default notice are intrinsically linked to the lawfulness of your charges. I will not allow these issues to be seperated and I leave it to you to either agree to my original proposal or take this matter before a court.

I cannot afford £10 per month. You have access to the account which recieves my benefits payments and can see I live on less than £50/week which has to cover all of my expenses. As already stated these payments will increase once I find employment. The offer remains at £2 per week. If you wish it paid monthly you may debit £8 every 4 weeks beginning 27th September. In all seriousness what's £2 per month extra to you?

Again I leave it to you to either agree to the original proposal, confirm this in writing and begin debiting my account or to issue a claim against me in my local sheriff court.

 

Dolly thats our intent, they can't really take it to court without having to defend the charges. Just have to make sure they know we know

 

Just a draft, will finish and send it tomorrow.

I'm not sure about the 3rd paragraph. Does someone here understand what I mean? My original version called them some nasty things.

[dolly]

Third paragraph I would avoid rhetorical questioning. I would simply state that the amount is in dispute.

 

Also, send the LBA if not already done so.

 

And best to avoid calling them nasty things

[chimp choker]

 

 

The next 2 sentances are equally confusing. No direct debit has ever been set up on the account. On checking the statement for last month there were 2 DD's for £5 taken out and immediately returned with 'correction' written beside them. This is obviously them messing up and paying someone elses DD. There were no charges applied for returned DD's either.

 

 

Do a site search on my name and see what i've written about dodgy DD's on nationwide accounts.

 

What they do, or did in my case is reinstate a DD after I have cancelled it and then when it is returned unpaid they bang on the £30 in charges so i pay off £35 in my CCCS agreement and they put interest and these spurios charges for bounced DD and that comes to about £49 so i'm in greater debt each month even though I'm trying to pay it all back.

 

Incidentally I complained to them and told them I was going to the banking ombudsman and also to try and get them removed from being a credit provider and they offered me £120 today ......I'm owed over £3k......

[mutzi]

post not relevent, letter here

[mutzi]

Letter just arrived, dated 22nd.

 

Acknowledges CCA request....

Sorry you didn't like our last letter....

 

As you are aware our customer care department have already declined a refund of charges on the account and I am not in a position to over ride this decision.

Your offer of £2 per month towards the debt is unacceptable as per our previous letter. A minimum of £10 per month with a completed statement of means is required for consideration to suppress interest on the account.

 

Something about DD's from their records... (no real information)

 

The default notice that has been issued will not show on yuor credit records unless Nationwide decide to register the debt.

 

I hope this covers all the points mentioned in your letter. If you require further information......

25h September 2006

Dear Sir/Madam

FlexAccount: 1234

With reference to your letter of 22nd September.

The offer for repayment of the balance was and remains at £2 per week or £8 every 4 weeks, not as you seem to have taken it, £2 per month. You have yet to explain why this is unacceptable.

I invite you once again to justify how exactly the current charging scheme covers your liquidated losses in relation to my account. Failing that no repayment will commence until all of the charges applied have been refunded, as the amount due is still in dispute. As you state you are not in a position to make any decision regarding these charges may I suggest you forward the details of my account to someone within your department who has such authority.

Further you have neglected to address the points of the validity of the default notice or the relevence of the balance as of July 11th.

This will be the last time I write regarding these issues. If your reply is simply a repeat of your previous letters, quotes from the standard rhetoric of 'It's in our Terms & Conditions...' or just plain avoidant I will lose all patience and cease further correspondence with you.

Yours sincerely,

Let's see what they do now.

[mutzi]

eek, maybe someone can help with this.

 

Got a reply to the CCA request today stating that as it's a current account it's not covered by the act. Instead an unsigned copy of their current agreement was provided.

 

Credit is credit surely? If it's exempt under the CCA what is it covered by?