formal demand issued for overdraft total while account was in dispute - is it legal ?

[Catcall9]

Hello,

 

I'm trying to find something that I can use to argue that a formal demand that was issued for an entire overdraft amount, while the account was in dispute, isn't legal.

 

I understand that banks can demand the overdraft be repaid at any time as CCA doesn't apply to short-term unsecured loans but,

 

 

• The Office of Fair Trading Code of Guidance states:
  

“putting pressure on debtors or third parties is considered to be oppressive. This includes ignoring disputes about whether money is owed and refusing to freeze action if the debt is in dispute.”

 

I wrote asking that action on the account be stopped while it was in dispute, they just carried on adding charges (unplanned overdraft to cover the repayment plan I had set up but stopped paying because I disputed I owed it as it was made up of charges). I wrote again saying I wouldn't be making payments while the account was in dispute, they then issued a formal demand for the entire overdraft amount.

 

 

I need advice on whether they were allowed to do this....was thinking of replying along the lines of

 

 

• When I opened this account, I did not agree in the terms and conditions that you could refuse to freeze action, including making formal demands and continuing to apply charges on my account, when it was in dispute.
  
• Furthermore, it was not explained to me anywhere when I opened this account that the OFT Code of Guidance would be overruled in such circumstances and that you would continue to take action while the account was in dispute.
  

any advice appreciated, my ultimate goal is to try and prove that a default notice that was issued and recorded on my credit file, after the banks full and final response, isn't valid (I recieved one that stated the default sum, about £60, and demanding I pay the money immediately by contacting them the day I recieved the letter, doesn't meet the consumer credit regulations).

The bank are currently saying that the default notice is valid because,

 

 

1) they issued a formal demand prior (when the account was in dispute). I think they are trying to say that they followed the right procedure before defaulting me ? But I don't think a formal demand while an account is in dispute sounds right.

 

2) that it was clear from a statement issued just prior to the default being recorded that the account was with thier consumer debt recover department

 

 

Am I on the right track here ? Or is there something else relating to action on disputed accounts, bearing in mind it's an overdaft that was being disputed, that I can use ?

 

 

 

Also do default notices issued on overdarfts have to satisfy the consumer credit regulations, in terms of the amount of time given to avoid the action they say they are going to take ?

 

I am ultimately trying to remove the default notice, but realise I will have to start a repayment plan for the overdraft in the end as the test case wasn't successful.

 

many thanks in advance.

[BRIGADIER2JCS]

I would guess that the formal demand is their final response

to your dispute.

As you say they can require repayment in full at any time.

My opinion stays that this is a final response and they consider

there is now no dispute.

Seen similar many times.

[dx100uk]

typically if the OD contain PENALTY charges

 

then that in effect also invalidates any DN.

and yes they must give a stated date, [dd/mm/yyyy] 14 clear days from the date of the letter

plus any postage time [4 days 2nd, 2 days 1st]

 

if posted by any others mean, say UKMAIL co.

then its well known that their S on the envelope means 2nd class

that typically takes 5 working days to even get into royal mail delivery system

so at least 9 days on top of the 14 days.

 

how old is the bank account

an when was your 1st PENALTY charge

 

as if since 2009

 

then BCOBS might help as well

 

dx

[Catcall9]

Hi Brigadier,

 

thanks for your reply, just to clarify

 

I had a final response (OCT 2009) to my complaint/dispute

3 months after I logged it with them (JULY 2009).

 

There were various letters responding to my complaint

putting me off and saying they were still looking at it or had referred it to their bank charges team,

but the charges and final demand were issued (AUGUST 2009) independently,

 

actions and letters with demands just kept coming with no reference or acknowledge of my dispute or complaint in them.

 

It was like the two things were completely unconnected as far as the bank were concerned, I don't think this is right ?

 

If you dispute that you owe money that they are trying to collect, shouldn't they stop collecting until the dispute is resolved ?

[Peterbard]

typically if the OD contain PENALTY charges

 

then that in effect also invalidates any DN.

and yes they must give a stated date, [dd/mm/yyyy] 14 clear days from the date of the letter

plus any postage time [4 days 2nd, 2 days 1st]

 

if posted by any others mean, say UKMAIL co.

then its well known that their S on the envelope means 2nd class

that typically takes 5 working days to even get into royal mail delivery system

so at least 9 days on top of the 14 days.

 

how old is the bank account

an when was your 1st PENALTY charge

 

as if since 2009

 

then BCOBS might help as well

 

dx

 

HI

 

I had a similar issue over a DN on an overdraft a while ago. Their response which was supported by TS was that they did not have to send a default notice under the CCA because , A, it was not necessary to terminate the account in order to demand repayment, and B there are no repayment arrangements on any agreement, so they are not demanding early or accelerated repayment.

 

DB

[Catcall9]

Thanks dx,

 

Why is the default notice invalid if the OD is made up of penalty charges ? I thought that the test case ruling decided that these charges weren't refundable and had to be paid, I don't think I've seen a successful case where they've been paid back since the OFT ruling - any links to law appreciated

 

The entire OD was made up of penalty charges, all added before November 2009 (Banking Code, I don't think BCOS applied until Nov 2009, last charges applied October 2009) . I started a claim against bank in 2007, just as test case stuff was coming in and the claim was stayed, the bank refused to lift stay although they acknowledged hardship.

 

With regards to the default notice, the bank really muddied the waters

I logged a complaint disputing the overdraft sum JULY

Then separately, they granted me an unauthorised overdraft as I didn't pay my installment on my repayment plan on the overdraft, because I was disputing the overdraft amount

I had a demand for full sum AUGUST because I hadn't paid the unauthorised overdraft amount and the interest charges on the unplanned overdraft back.

In SEPTEMBER they did the same thing again and then sent me a letter saying they were willing to temporarily suspend legal action on the account if I contacted them "straight" away to discuss repaying the full demand they issued in AUGUST.

They granted me an unauthorised overdraft every month when I "missed" my payment installment and didn't pay the unplanned overdraft charges until OCTOBER

 

Then 13th OCTOBER I had a NOTICE of court proceedings saying they wouldn't take action if I immediately paid the unplanned overdraft amount of about £60.

 

 

thanks in advance for any links oir advice.

[Catcall9]

I think the main thing that I'm confised over here, is can they demand full amount, repayment plan was in place but I'd asked for them to suspend it because I was disputing that I owed the money, they didn't acknowledge this request so I wrote and told them I wouldn't be making any more payments.

 

 

Can they issue a formal demand for the overdraft amount, while the overdraft amount owed is disputed and before a full and final response ? Is this legal ?

 

I'm not sure it is because I didn't agree to keep paying charges while those charges were being disputed in the T&C's, and also because OFT says the bank should suspend action on amounts that rae being disputed.

[dx100uk]

at the end of the day

 

they'll never go near a court because of the fear of a counter claim - the PENALTY charges.

 

matters not about the court case with the FSA etc.

still doesn't make the charges lawful.

 

have you actually written to them in recent times?

 

something along the lines of the default is preventing you from gettting ******

 

and the OD is solely made of unlawful penalty charges, would they be prepared

to write the debt off and remove the default?

 

this might help.

[Catcall9]

thanks dx, I'll look through it on detail later, but there's nothing in there about making formal demands while an overdraft account is in dispute.

 

They have already replied to my first letter of 14th May,

where I asked for them to send a true copy of a valid default notice or remove it,

saying that one was sent,

that a formal demand had been made in any case in August 2009,

and the account was clearly defaulted because they issued a statement from CDR department.

 

They are acting like I'm saying I hadn't received a default notice at all,

which I have it's just that the notice I received isn't valid.

They have also clearly stated that they would not be willing to remove the default.

 

 

I've never gotten anywhere with Lloyds by asking nicely,

when I asked for my charges back,

asked them to lift the stay because I was in hardship both times

they told me where to go basically because there was no law that said they had to do these things, only guideline.

 

 

I need to be much more heavy handed with them, they aren't going to remove the default unless I threaten them with something that will make them remove it.

 

So I'm just trying to clarify the law on

 

 

1) issuing formal demands on overdraft accounts while the amount of the overdraft is in dispute

2) filing defaults on an overdraft account - I think the pdf you sent me, and also the CCRegs will help with this. - are the rules for default notices the same on overdrafts as they are on other accounts - I'm pretty sure I don't have a valid default notice as they demanded payment immediately and did not explain to me, AFTER the dispute was resolved, that the consequences of not paying the money back would be to file a default with the CRA's.

 

 

thanks