Enron v Citi ***WON***

[Enron]

Had an offer for a partial refund of account charges, and still chasing CitiCard for the remainder.... and had this nice little letter.

 

----

Re: Your Account

 

I am writing further to your letter of 6th September. I fully expect you to ignore the content of this letter and issue proceedings but feel it necessary to set out the position fully in any event

 

Regrettably, my client cannot accept your terms of settlement as, to do so, would imply that you are entitled to breach your contract with my client, some 39 times in all, with impunity. That is not what the OFT report stated or intended and if you were to read the same I am sure you would understand that your claim is ill advised.

 

The OFT allowed for default fees but recommended a lesser sum than had been charged previously. It was not retrospective in nature. My client chose to treat it as retrospective and refund charges. It did not, contrary to your letter `retrospectively charge £12 per default when the initial charges, were unfair and unlawful`. Only the amount not the principle of the charges was deemed unfair hence my client has rectified that unfairness. Please note however that it and all other banks did not fully appreciate this at the time. The nature of contract law is that something can be deemed fully legal until a court determines it is not and that is what has effectively happened here.

 

The amount now charged is actually less than it costs my client in admin support to process and then deal with defaults as these are a collective not an individual charge to the business and this principle was also recognized by the OFT.

 

It is true that Germany charges less than the UK but it is an entirely different credit environment and German credit card customers take a very different view of their credit responsibilities. It is simply misleading as people do to insist that what works in one country ought therefore to work in all other countries we operate in. There are for instance, other countries where the default fees are higher than the UK.

 

In the event that you issue proceedings my client will defend itself on the basis that you have accepted that you breached a contract, that the OFT has agreed that default fees are not of themselves unfair or illegal and that it has therefore retrospectively amended its contract to reduce the charges it levied and refunded the difference. In your own case, I also note that your outstanding credit balance is £*,***.**. This means that you have not yet actually paid those charges as opposed to them being levied as the account is a single fluid whole rather than a series of discrete tranches.

[Enron]

Currently typing my reply.

 

Previously they had wrote:

Having reviewed your account, I have therefore recommended that the sum of £347 be written off, reflecting the difference between £815 and £468 had the charges been £12.00. Accordingly your account has been reduced by that amount.

 

My reply (relating to this):

Welcoming their decision to reduce my balance by £347, and accepting as a partial payment. And continuing:

 

I do however find it somewhat disturbing that you wish to restrospectively charge £12 per default when the initial charges were both unfair and unlawful. As such I still intend to persue for a full and unconditional settlement, which will be a further £478 prodiving that the your offer of £347 has been creditted to my card account.

 

... I did ask for a full and unconditional settlement which is probably why the reply has a certain tone to it.

[lickthewallfatboy]

citi are complete, 100% total idiots.....and as for their "solicitor".....

 

suffice to say I wouldn't like him representing me on ANYTHING.Was there a time when solicitors qualifications were handed out free with packets of smarties or something????I think I might give this solicitor lark a go....

[Enron]

Dear Mr. Smith

 

Thank you for your letter of 13th September of which I acknowledge receipt.

 

I am trying to be reasonable in relation to this matter, as such if you were able to demonstrate that the cost of handling an individual default including any manual intervention exceeded the OFT specified maximum of £12 then I could possibly be persuaded to drop any further claim.

 

While I appreciate that you are able to impose charges in the event of a default my understanding is that anything in excess of the true cost is unlawful.

 

In the absence of any such documentation I will be forced to proceed with a Money Claim against Citi Card for the remaining amount of £ 478 which is in dispute, plus interest, subject access request fee and any court costs.

 

Thank you for your time and assistance. I look forward to your reply.

[elsinore]

Well, I'm still gasping at the incompetence of Citicard's solicitor. If I was Citicards C.E.O. I would be thinking about jumping out of the window into Salford Docks after reading that letter.

 

I fully expect you to ignore the content of this letter and issue proceedings but feel it necessary to set out the position fully in any event

 

What kind of an opening statement is that?

I'm perfectly certain that I could defend his clients position in a much more cogent and professional way than he has done.

I think you are going too easy on him Steve.

Even so, I hope you get a result, without having to resort to the courts.

 

O.K. lickthewallfatboy, how about you and me setting up in practice?

 

Elsinore

[Enron]

This is what I fully expected to be honest.

 

I thought that a full settlement would not be forthcoming, as it would be akin to a turkey voting for Christmas.

 

There is a certain tone of intimidation which runs through the letter, in my belief to try and dissuade people from persuing a claim. Still going to sort my spreadsheets out at the start of next week and go to Money Claim.

 

On a side note, decided to get in touch with the Information Commissioner with regard to being sent another Citi Card customers statements in violation of the Data Protection Act.

[Enron]

From letter sent to me:

 

BRIAN SMITH, CitiCard Solictor: It is true that Germany charges less than the UK but it is an entirely different credit environment and German credit card customers take a very different view of their credit responsibilities. It is simply misleading as people do to insist that what works in one country ought therefore to work in all other countries we operate in. There are for instance, other countries where the default fees are higher than the UK.

Just been ponderring Brian Smiths letter a couple of days back, and something didnt sound right when I read it initially.

 

It seems that he is trying to justify higher charges in the UK in comparison to Germany, because German people are more responible in making payments before the due date and not exceeding their limits.

 

However if people are LESS responsible here and incur more defaults on an `economies of scale` basis, surely the unit cost of each default would be smaller.

 

You could explain regional difference down to employment costs, premises and IT support. Though Citi Cards charges still remain approximately 1/3 higher than that of Germany at present.... and were 3 times that of their German counterpart before the OFT statement was issued.

[Enron]

Thought that the partial refund had been creditted to my account, but double checking dont think its come through yet...... time to submit money claim me thinks.

[Enron]

No letter to confirm that their offer has been creditted to my account, so money claim submitted this afternoon.

[Enron]

Money Claim issued, deemed served on 30th September. Defendant has until 14th October to reply.

[Bookworm]

Cool. Fun, fun, fun

[Enron]

No doubt will have an interesting defence submitted, but willing to take all the way if necessary.

[rich2568]

Yes- it will go all the way.

 

Get your best suit ready!!

[Enron]

...

[Enron]

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[Enron]

Citi`s AQ submitted, no doubt will be the same as the other ones we`ve been seing so far.

[gizmo111]

Citi`s AQ submitted, no doubt will be the same as the other ones we`ve been seing so far.

 

have you asked for copy from court?

[Enron]

Phoned this morning, and a copy is being sent through.... no doubt because of the court the case will be heard at, a stay will be applied but have yet to receive paperwork.

[Enron]

Citi AQ received, same as everyone elses - gonna draft a nice little letter back to the court now.

[Enron]

Citi AQ

 

I would be grateful if the Court would consider remitting this matter to Salford County Court, the Defendants home court.

 

This is in keeping with the principles of the overriding objective insofar as it has the benefit of keeping costs down (the Claimants costs of travel are reimbursable if successful) and enabling one Court to develop local familiarity with the accounting methodologies relied upton by the Defendant in calculating its charges and allot sufficient time to deal with a spate of similar cases all of similar amounts of money and involving virtually identical pleadings.

 

From the CPR, notes on allocation at 26.2.1, it is also clear that justice out to be `local` to the Defendeant, and that this priniciple is of general application.

 

My client, which has a national customer base, is currently defending several dozen identical claims to the present one, based on the recent OFT report on default feees, in as many courts around the country.

 

The Defendant will be relying upon its Director Of Finance to explain the basis of its charges and their level. As this is the commercially sensitive information, we would wish to present this evidence orally and in private. As this is potentially required in many other similar cases. It would be commercially less onerous if this could be done locally, this minimising the absence from the business of a member of senior management.

 

Furthermore, the Defendant has already sucessfully defended the first one of these cases to be listed and heard, that of Kissick v Citi Financial Europe Plc in the Craigavon Court in Northern Ireland. I submit that it would be inequirable and against the principles of fairness, certainty of outcome and natural justice if the Defendant were to face the prospect of each different court where a claim has been allocated coming to different conclusions on identical claims brought on identical contracts. Although the above decision is one of first instance only and thus only persuasive, the Defendant has a legitimate expectation that a court faced with similar evidence would come to a similar conclusion. That expecttation would be greatly enhanced if one court only was dealing with all of these claims.

[Enron]

Order made for case to be heard at Bristol CC, and not transferred to Salford.

[stan5131]

Just subscribing to this thread steven. What are your thoughts on Citi being allowed to disclose costs in private to the judge. This is just scandallous!

[Enron]

My case has been slow, still waiting for a court date....

 

The evidence in LTWFBs case was introduced at the last minute. He was unable to scrutinise it or consult expert opinion regarding it which was somewhat surprising.

 

Citi's entire defence hinges on their ability to support their claim that a default costs them £12.88 as they have stated.

 

However to date when standard disclosure has been orderred they have written in objecting to the decision or some part of the legal process in the case. It could lead some to say that they have something to hide.

 

Likewise in the mercantile court a breakdown of Citi's figures was requested and not supplied by the due date.

 

You could argue that if Citi's £12.88 figure is water tight they would welcome the opportunity to prove this, and immediately solve the problem of people claiming for more than the difference in charges that has so far been offerred.

 

Also the question that if the £12.88 figure is correct, they are effectively now losing 88p per default. Which represents surprising generosity from a bank.

[stan5131]

Yes I agree. I think they think they can now get away with judgement in their favour from now on.

[elsinore]

Yes I agree. I think they think they can now get away with judgement in their favour from now on.

 

I sincerely hope not, stansfield. If you read LTWFB's thread you'll see that he was well and truly mugged by the combined efforts of Citi and the judge.

 

We have moved on since then, to a degree where our tactics should provide problems for Citi. 'Nuff said!

 

Elsinore