Changing claim amount from Prelim to LBA

[redsue]

Hi everyone

This is my first posting, what a great site... We currently have two nationwide accounts which we have held for over 6 years, both accounts have an authorised overdrafts on each £1,000 on one and £2,000 on another. We generally live off our overdrafts (yikes, I know!). We have sent off and received all the information from Nationwide regarding our charges and I'm now working through them and inputting the information onto the wonderful spreadsheets - the question is... how can I work out how much is 'authorised' interest charges and how much is 'unauthorised' interest charges?

I'm about to send off our first letter about the charges (the one before LBA) but want to get my figures correct.

We are currently in the process of opening another bank account and moving our meagre savings into another bank account - all thanks to this site - I really don't think I would have had the balls to do this without everyones help - so a big thank you.

Any suggestions anyone?

[bill-k]

Hi Redsue - I'm a newbie at this, but have checked out a few threads now, and slowly getting the hang. Heck of a learning curve. I personally decided NOT to chase the bank for the interest which they charged me, as it was indeed one helluva job to add it all up. In my opinion, that interest was perhaps the ONE element of their usury that they were (arguably) allowed to keep.

The bit that they are now finding they were definitely NOT supposed to keep was the penalty charges themselves - which are easy to tot up if you have your statements still, or your DPA SAR reply. Enter those on to a spreadsheet first of all. Now check your 8% Statutory interest column (this is set at 8% Simple). Next I suggest you add Columns for compound interest at the HIGHEST rate that the bank charges. If you check out Mindzai and Lucid's joint claims, then you will find their spreadsheet & misc info - excellent stuff. Compare the Compound Interest at Contractual Rate against Statutory Interest at 8% Simple and you might be amazed. I personally decided to just claim Contractual Interest and let them keep their initial interest charges they made to your account(s). It is a b*$$@r to work out, and I don't think it ever amounts to that much, anyway. You can then demonstrate to the Court (if need be) that you are being reasonable by doing that.

Check out the "New Way of Looking at Interest Thread."

 

Holding your hand...

 

Bill.

[redsue]

Hi Bill

 

Thanks so much for the reply. You're right! It is SO hard to work out. What I actually ended up doing was inputting the info into the complex charges spreadsheet and I think that worked things out for me, but you're completely right as I don't think it worked out to much at all.

I've been all over the site - which is just brilliant - reading hundreds of threads to try and get up to speed on what I am doing.

I sent out my initial prelim letters (x2) to Charles Bacon by recorded delivery on the 6 Sept and am now waiting for my 'yeah, whatever, get lost' letter, if I haven't received this (or when I do) I take it I send out my LBA on 21 Sept? All in all I'm claiming over two accounts which tots up to an amazing £2,300 (without the 8%) I knew me and the hubby were bad but I'm shocked it is so much. We are also in the process of opening some parachute accounts too.

I think I am playing the waiting game at the moment - but like everyone else I'm convinced we'll by the first who have to go to court!

Thanks for the support - will keep you posted!

[dolly]

Yes, send your LBA out on the 21st if you haven't heard from them by then.

 

Keep us updated

[bill-k]

Yep - as Dolly says - send out your LBA next. I personally prefer to give them a few days extra, just so's they can't whinge that you didn't give them enough time !

 

Before you do, though, I really think you should decide fer sure exactly what it is you're going to claim via the Court (and the bank WILL make you go that far, you can be sure !!!) You have to be sure that the claim you submit to Small Claims Court is the maximum you think you're entitled to, and wish to claim back. As (I think) BankFodder put it, you can't go back later for the rest ! This is just my own thought process, but try this:

 

1. You want to claim the penalty charges taken from your account(s). No question - you're going to. Do it.

 

2. Do you want to claim back the interest that the bank(s) charged you on those penalty charges ? I decided not to, as I was not permanently overdrawn, and that interest didn't amount to that much, anyway. From what I can see, you might have been charged a lot more than me, though, so you have to decide whether or not it is worth the effort involved in calculating and claiming that interest.

 

3. Having decided that, you now have to decide whether or not YOU intend to claim interest YOURSELVES from THEM. If you just claim "Statutory Interest" OR "Contractual Interest" on those penalty charges (and whatever interest was charged to your account on them, if you decided "yes" to question 2). You can, of course, decide to claim neither, if it might cause you to lose sleep !! AS IF.

I'm not sure, but I suspect that there is a bit of confusion surrounding this issue. The interest that THE BANK charged YOU (either at authorised or unauthorised rate) is one thing - but the interest that YOU can now claim back from THE BANK on those charges is another. Now THAT interest is what I think you should consider going for - particularly if we're going back some years !!

If you use Mindzai's spreadsheet, you will be able to see the difference between claiming Statutory and Contractual Interest. In both cases, this is interest which has not actually been charged to your account(s), but which you can now claim yourselves on the penalty charges made. This is truly "QUID PRO QUO !!!" (Now...was that quote from Hannibal Lecter, or Del Boy ? Oh, well, "Mange Tout" I say !!!)

 

Statutory Interest is set at a paltry 8% p.a., and is calculated as Simple Interest. It is generally accepted by the Courts without fuss, but is a lot less than the banks were charging you on the money that you had from them !!

 

Contractual Interest is interest set at the rate that the bank were prepared to charge YOU and is almost invariably compound. It is of course subject to their objection, but they cannot reasonably object (and haven't done so yet as far as I know) to an interest rate that THEY THEMSELVES CHARGED YOU !!! I don't think any have objected, yet !! This is where I suggest you check Mindzai & Lucid's stuff. Basically, their Particulars of Claim allow you to claim the maximum rate ("Unauthorised rate") of Contractual Interest in the first instance, but set up fallback positions ("Authorised rate" - then "Statutory rate") for claiming interest at the lower rates if it is contested. I questioned them on this, but their answers make sense. Claim Contactual Interest at the "Unauthorised" rate as your primary claim, but claim it at the "Authorised" rate as a secondary fallback position, and finally claim "Statutory" rate as the final position. It might seem odd to you (it did to me) having to overtly state your fallback positions. I put this to Mindzai, who filled me in to the effect that "if you don't actually claim it then the Court will not award it."

If you have a long history of these charges, then Contractual Interest is worth consideration.

 

5. Decide whether you are going to claim for charges made over six years ago. If you are going to, then give it extra thought. I was going to, then Glenn UK gave me some wisdom on the "A New Way of Looking at Interest" thread. I have now decided to go for charges up to 6 yrs back (plus Contractual Interest) first of all. Then I am considering going for the earlier stuff separately as another job, at a later date. I don't think there is any problem in doing that, AS LONG AS YOU DON'T SIGN ONE OF THOSE "IN FULL AND FINAL SETTLEMENT" FORMS !!!

 

4. Check out the "A New Way of Looking at Interest" thread, if you haven't already. The contributions there are excellent stuff (present company excepted !). I think if you can show the bank(s) that you at least have done some work on this, then they won't consider making yours the "Test Case."

 

Hope this makes sense - and helps !!

 

Bill.

[redsue]

Thanks Dolly,

Thanks bill-k,

I've just spent a considerable amount of time reading through the "A New Way of Looking at Interest" thread and I have to say my head really hurts! It really has boiled my brain!

I'm still unsure as to which way to go, at the beginning of this exercise I was content with just claiming back my charges and accepting the 8% interest from the courts as a bonus! (If I were to win of course...) but now I'm not so sure.

Unfortunately, I've been unable to download Mindzai's spreadsheet for compound interest so not sure what the difference is likely to be although our claims do go back a full 6 years.

I am going to give this some real thought over the next few days to be really sure as to the basis of claim against NW - I have to wait until the 21 Sept to send my LBAs - but I feel I may go down the 8% route (as I'm a bit of a wuss!) and follow the tried and tested method - unfortunately, as we are always using our authorised overdraft it just confuses the whole matter - to me anyway!

bill-k how are you progressing? what stages are you up to?

[bill-k]

Hi Redsue,

I feel your pain !! Yes, it's heavy going some of it, innit ? Sorry you weren't able to download Mindzai's spreadsheet. You might have to be patient if you're not on Broadband, as it is fairly big. But it's worth it I reckon. I note that Vampiress is "re-vampng" (heh-heh) her spreadsheets, so that might be worth waiting for, though.

There are some on-line Compound interest calculators, where you can make a quick check on a particular charge. Basically, the further back in time you go, the more attractive Compound becomes (by definition !) Try comparing the interest on your earliest charge with one of these - then make your decision.

I can't work out how to send you a link to one, here, but try Google. I think there is a link on the "New Way..." thread somewhere.

If it comes to it, I can send you the formulae to put in to a standard Excel spreadsheet, so you can tot up the whole lot and compare between 8% Statutory and (too much)% Contractual. Depends on how much of a "techie" you are, really. Like I think BankFodder expressed earlier - "You can't go back for the rest, later" - so take the time to compare and decide.

Hope this helps,

Bill.

[bill-k]

Sorry, forgot to mention.

I've sent off four County Court claims (for initial charges plus Contractual Interest !!) in the past week, plus one LBA. Also currently awaiting 2 DPA SAR replies (Ho-hum...) Have had a couple of "goodwill" cheques meanwhile, which I cashed, but which I consider as partial payment only !!

Also helping In-Laws to open parachute account, then going for some more. DPA SAR sent. It's worth getting the In-Laws to OWE ME !!!

Roll on, Christmas !!

[ukaviator]

Hi Bill k

 

Vampiress has just posted the new spreadsheets in the library

 

Good luck

 

Ukaviator

[bill-k]

Cheers UKAviator. I notice you have a 5K+ claim filed today. Just keep the cockpit door firmly locked until you're taxi-ing off the runway !!!

[redsue]

wow bill-k you're keeping busy! good for you keep us updated on your progress, UKAviator, I'm about to download the new vampiress spreadsheets and go from there.

I'm not too sure why I was unable to download Mindzai's spreadsheet - not sure whether it's because I'm using an apple mac instead of pc...

Off to do my inputting now.. I may be some time...

[bill-k]

Redsue - yes it might be the old Apple Mac -v- MS incompatibility problem. I'm using Windows XP and managed to down Midzai's sheet and Vamp's earlier ones. Her new ones use the Google facility, and I haven't yet been able to down them !!

Ah well - C'est la Guerre !!

There are more posts on the "A New Way..." thread.

When you've cooled your brain down a bit, that is !!

[redsue]

Arrghhh - right! Got that out of my system

I have finally come to an 'executive' decision after much deliberation and messing about with various spreadsheets.

I have tried to use both the wonderful vampiress spreadsheets on google and I've also taken a look at Mindzai's spreadsheet and inputted all my details and I have to admit it makes no sense at all

I've read and read and read loads of threads on this whole site (I think I need to go to CAG annoymous as I'm always on it) the spreadsheet that makes perfect sense to me is the 8% simple interest.

The problem I have been encountering is because the hubby and I live on our authorised overdrafts it is difficult to work out what amount I can charge contractual interest on.

Therefore if I am ever the one who has to go to court I know that I understand the basis of my court action and the reasoning behind the 8%.

My argument for being a thicko when it comes to figures is the creative job I am in and I use the other side of my brain....

I have to admit when the spreadsheets began showing figures of about 17K I thought - hhhmmm - maybe not. Sorry guys I'm too much of a wimp but I applaud each and every one of you who is going for it - I'm so rooting for Mindzai and Lucid - see there post regarding LTSB.

Sending my LBA out tomorrow - still no word from NW regarding my prelim - but hey - Not bovvered!

[dolly]

A Nationwide member made her claim with contractual interest and got it all back - taylormandy is her user name.

[redsue]

thanks Dolly for the quick reply

I'm not too sure that my figures are correct though when I'm inputting the information - the figure seems way too high - sorry to be such a pain but is there anybody out there who could take a look at my spreadsheet? I think that I'm charging contractual interest on an authorised overdraft amount. I'm due to send my LBAs out tomorrow and would want all the info to tie in together.

[bill-k]

Redsue - DON'T send the LBA yet. You are not obliged to send it at 14 days on the dot. Don't send until you're sure, PLEASE !!!

I haven't checked Taylormandy's case, yet (see Dolly's post above) - but please do. Please also check the most recent posts on "A New Way..."

FWIW I had to come down off the ceiling when I finally checked my spreadsheet totals using Contractual Interest Compounded Daily. I had to double and triple-check everything with on-line calculators before I'd believe it. THAT is why the banks use compound - it looks innocuous, but it creeps up on you and they know it. Don't feel guilty unless you think they do !!

There was an old fable about a Chinese bloke who asked for a debt to be repaid by putting one grain of rice on the first square of a chess-board, two grains on the next, four grains on the next. The debtor agreed, thinking the lender was nuts. The entire rice harvest of the country was used up before they got to square 64. Try working out 2 to the power of 64.

 

May I appeal to your artistic side, then ?

- USE BOLD STROKES !!!

 

Don't let this opportunity to come up with a masterpiece slip away without all due consideration. I beg you.

 

I'm not sure how to PM anybody here, yet, as I know PM'ing the Moderators is frowned on, but if you & hubby wanna swop some stuff, I'd be glad to. If we're considering claiming big figures, it's probably best to talk in whispers. Careless talk & all that...

[dolly]

Bill - the amount that redsue is claiming is a drop in the ocean to what I have seen Nationwide pay out on, believe me.

 

PM me Sue and I will give you my email address to send your spreadsheet to and I will have a look at it tonight.

[redsue]

Thanks bill-k and dolly,

I'm going to go through the spreadsheets again to double check everything is correct in the figures then I'll PM you both (once I've worked out how to do it!) - thanks guys - I'm feeling braver already...

[bill-k]

Redsue - I'm glad you're hanging back. Take up Dolly's offer to PM her - she's Platinum with 1,525 brownie points (posts). I'm Newbie with 32. No need to PM me, really, unless you want to. I won't feel slighted !!

FWIW by way of a single example I have one charge (the earliest un-estimated charge, in fact) of £9.00 on my spreadsheet, which was charged in January, 1991. It attracts £11.29 Simple 8% Judicial interest, but £97.71 at 17.08% AER Compounded Daily !!! I couldn't believe it at first. Punch that example in on your spreadsheet and/or ask Dolly to check it. By keeping that money all this time, the bank has earned AT LEAST that much on it, either by lending to others or re-lending it back to me !! It's yours, not theirs - BELIEVE IT.

By the way, if you Google something like "Compound Interest Calculator" there are a couple of them. The one I preferred (although it will not give identical results to the spreadsheet, as it doesn't compound on a daily basis) is provided by a firm of solicitors by the name of "Arghyrakis" (or similar). I can't seem to put click-on links in my messages here, otherwise I'd give it to you direct.

Dolly - thanks for the bigger picture snapshot. Yes, I guess they seem like big figures to us little guys, but you can see the whole mountain from where you are. Good to know.

[redsue]

Hi Guys - back again - I've been catching up on taylormandy as dolly recommended and rather than work through vampiress google spreadsheet - she just changed the % amount in the simple spreadsheet

Re: A New Way of Looking at Interest- 1st successful Claim - N'wide

by taylormandy - sorry not sure how you can link to other threads.

 

Anybody know what the current unauthorised interest rate is for a flex account with NW?

[bill-k]

Redsue - welcome back from the brink - I'm glad you're re-considering.

 

I found my interest rates by Googling the card or bank, and checking out their actual AER or APR rates from there. You might have to dig a bit deeper than the first or home page to get them but they're there somewhere. I've just done it and Nationwide current account shows 7.75% authorised (or 7.25% if you have a mortgage with them), and 24.9% unauthorised EAR rates.

 

Be aware - please - that just punching in the higher Contractual rate on the Simple spreadsheet just gives you Simple interest. I would still go for Compound if you are going to claim Contractual rate. After all, Compound calculation is part of the same contract. By claiming at Contractual rate, but calculating in simple form, you're basing your claim on a half-measure.

 

I don't know how conversant you are with spreadsheets (I'm slowly getting the hang with Excel myself), but if you click on the "Interest" boxes you will see a formula appear in the toolbar above. For F9 it will be something like "=(C9*$K$18/365)*E9" - this takes the annual interest rate you punched in to K18 and divides it by 365 to give the daily equivalent. It then multiplies the charge in C9 by this percentage to give the actual daily interest on that charge. It then finally multiplies that by E9 (the number of days since the charge). It is calculated daily, but it is NOT Compound. Try adding another column to compare. Copy the column F, then substitute another formula in the Interest column. Try this:-"=C9*((1+($K$18/365))^E9)-C9" - which is the formula for calculating compound interest.

 

Before you go using it in a LBA spreadsheet, though, you have to apply another formula to work out the actual rate to use from the AER. Mindzai has done this in his already, but you can do it this way:- Label a box "AER" (say...F1 for instance), and punch in the AER to that. Next, label a box "Annual rate" (say...F2), format it to use percentages to 3 places, and punch in the following formula in the function toolbox:"=365*(((1+F1)^(1/365))-1)" - THIS is the rate you should use in box K18. You could transfer this formula directly to K18 or simply punch in the function "=F2" into K18.

 

You should get exactly the same result from Midzai's spreadsheet. The difference is that Mindzai has done it very tidily, whilst my way is doing it the long way. It helped me understand what was going on, though. Having said that, I'm more of a techie than an artie, so we might not be hitting the spot here. But whatever you do - don't let the bank keep a penny more than they are entitled to - please !!!!

[redsue]

Thanks B I'm not a complete novice when it comes to spreadsheets so I kinda get where you're coming from with the formulas, I've PM'd Dolly who is taking a quick look at it for me and she not too sure about it so I'm going to try and work through your formulas above - thanks for the info as aways

[bill-k]

I've recently had an interesting chat with Vampiress, who along with words of encouragement, also expressed her view that such a degree of precision may not be necessary, and indeed may be frightening people away. I see her point, and she sees mine, I think.

 

In the end, I agree with her that we are all here to have our say, and make our points whether they be major or minor. We make our contributions, and take away what we wish from the Forum. But finally, we must decide on our chosen route, and it must be the route we feel safest taking.

 

As you will no doubt be aware, I shall be going for max rate, using max precision (I can't help it - it's a kind of compulsive behaviour disorder with us techies !!)

 

Redsue - in the light (or penumbra ? ) of Vampiress's recently imparted wisdom, I feel I should say "don't let us precision-geeks bully you." I've posted some stuff in "A New Way..." ("Geek Alley" ), if you want to take a look.

 

Stick with Dolly, and tread your chosen path knowing that it is your choice.

 

Know, also, that - in the best possible way - "Every step you take, every claim you stake, I'll be watching you."

 

Now go for it - seeya.

 

Bill.

[redsue]

Hi everyone - I've been reading the debate regarding compounded contractual interest with great interest and the case of taylormandy who successfully claimed this back with NW - in light of this I have decided to claim this back also and have spent the last few days reading up as much as possible to try and get my head around it.

 

I orginally sent my prelim letter on 6 Sept claiming charges and interest only on two accounts, to which I've not heard a sausage back from NW. I came to the figures below using the complex spreadsheets in the templates library.

 

Acc1 = £1,221.50 in charges + £49.81 interest on penalties = £1271.31 total

Acc2 = £970.00 in charges + £65.76 interest on penalties = £1035.76 total

 

However, I am just about to send my LBA but would like to claim compounded contractual interest on my charges only (not the interest as quite frankly I can't get my head around it at all - but this bit I do understand:))

 

I've worked through the figures using Vampiress google spreadsheets (thanks vamp) and have now come to the following conclusion

 

Acc1 = £1,221.50 in charges + £1,135.40 compounded contractual interest on penalties (24.9%) = £2,356.90 total

Acc2 = £970.00 in charges + £971.17 compounded contractual interest on penalties (24.9%) = £1,941.17 total

 

I'm sending out my LBA and I want to change the amount I'm claiming from my premim letter to take the the new figures.

Has anyone any suggestions on what I should add to my LBA letter? I'm thinking along the lines of -

" since my previous letter I now understand that the principle of mutuality, or reciprocity, applies to the aforementioned contract and will be claiming back compounded contractual interest on these charges"

 

Any advice would be greatly appreciated as I've spent the last few days knee deep in spreadsheets.

[Isiris]

If red sue doesnt mind I would also like to think about changing my interest ON A MCOL that already has a Court Date.

Lloyds are playing sill buggers and I want them to pay dearly now.