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

[Spiceskull]

In my opinion, it is unreasonable to assert that you as an individual could command an APR of 16% or anything like, as you do not possess the investment power of a financial institution.

I have to say that it is a fair argument, and more so when you consider that we, as customers, do not hold a consumer credit licence.

 

However, the bank, in being granted the licence and all other privileges, is duty bound to act lawfully. By not doing so, it is breaching the very terms of contract it sets, and therefore the mutuality and reciprocity comes in to force when dealing with those breaches.

 

The argument is not that we are lending money to the banks at 16%, but that the breaches and penalties are applied at this rate...

 

To be honest, I expect the bank to argue more about my estimated charges than about the interest rates...

[Don Quioxte]

The argument is not that we are lending money to the banks at 16%, but that the breaches and penalties are applied at this rate...

 

Yes but there is reasonable recompense for this - in that you can A) calculate what you have unfairly paid and claim it back (interest and all). And b) claim an additional 8% on top. I think the UTCCRs work both ways and we have a responsibilty to ensure that we do not expect the courts to award damages in our favour that would be deemed unfair if the contract was breached the other way. That is to say that the UTCCRs protect us in so much as penalties/charges should not reflect an amount greater than a court would award in general damages for a breach of contract in our favour - we should respect this when claiming damages against the service provider.

[Spiceskull]

But looked at another way - if I owed the bank £1,000, and they took me to court to recover it, what interest rate would they claim? You ban bet your bottom dollar it would not be 8% - they would claim a higher rate, and say that losses they incurred justified this...

[Don Quioxte]

- they would claim a higher rate, and say that losses they incurred justified this...

 

ya agreed spice. but it goes back to what i said about "them" being a business with accepted overheads and genuine (if limited) administrative costs. We don't have that.

 

But I will be most intrigued (as you well know) to follow the progress and I am confident that you will prevail!

[Spiceskull]

and I am confident that you will prevail!

That makes two of us...now all that remains to be done is for me to shift my butt, and actually get down to writing those letters...

[fivelaws]

I know this is only slightly relevant, but I have used a different Act for recovering debts in my business life. The legislation that provides small businesses with a mechanism to claim interest on late payments (the fabulously descriptive and surprisingly compact) The Late Payment of Commercial Debts (Interest) Act 1998.

 

I know that this legislation SPECIFICALLY excludes consumer credit agreements and that the Act we rely on (CCA1984) is a *totally* different ballgame .... but I think there are some interesting aspects.

 

The definition of "Interest" that this Act employs is;

1. If the contract has a stated right to charge interest, then the claim cannot include statutory interest - the rate stated in the contract will apply.

2. Statutory interest is calculated by a formula set down by the secretary of state and in doing so, the Sec. of state will consider the following criteria; a) To protect suppliers whose financial position makes them particularly vunerable ... b) To deter generally late payments.

Where it does apply, the rate of statutory interest is not fixed. It is determined by taking the Bank of England base rate at the beginning of each half year and adding 8%. For the first half-year of 2006, the rate is 12.5%. (there is a full list of rates here; http://www.payontime.co.uk/legislation/legislation_main.html [Edit: Link fixed]

 

As I said - I know this is all very different because it only relates to small businesses taking on customers, but there are a couple of interesting parallels in this legislation - specifically the bit about the interest rate used *MUST* be the one in the contract if stated and that under such circumstances, statutory interest cannot apply.

 

Does anybody actually have access to the full wording of s.69 of CCA84? And are there any appropriate amendments? How/where would we find such beasts?

[caro]

I will leave it for the experts to comment on this except to say it is very interesting, and I believe could be relevant.

 

Could you check the link though please, as it doesn't seem to be working.

[blueskies]

How about, and I know it will take a lot of work, taking the bank statements from the last 6 years. Starting with the opening balance, enter all the transactions that have passed through the account and, by using the rules applied to the account, recalculate what the balance would have been. The difference between this and the balance at the start of the claim would form the basis for the claim.

 

My LBA is in and my moneyclaim entry is due for Tuesday 6th. I'm prepared for the hours of work involved (estimated 15 hours).

 

Just 2 questions:

 

1) Can I claim for time spent preparing? and at what rate? (ok that's 2 questions)

 

2) is it possible to scan and OCR into a spreadsheet? if so, please tell me how

 

Steve

(volunteer guinea pig)

[Spiceskull]

2) is it possible to scan and OCR into a spreadsheet? if so, please tell me how

It is possible - I know I used to do it with TextBridge Pro.

 

When scanning you usually have a few options: image, newspaper article, letter, table etc, and it is table that you want.

 

I think that once the scan has taken place, instead of RTF the file can be saved as CSV, and hence a spreadsheet.

 

I remember thatthe process was a bugger to get used to, but once familiar, it was relatively straight forward. My only suggestion is to scan and CHECK everything...don't assume that OCR will recognise everything on a statement.

 

Good luck.

[blueskies]

I won't use the OCR method and there 4 different layouts over the six years and a lot of them are fairly poor quality fiche images. I will have a play and see what happens.

[skyrocket123]

[quote=BankFodder

 

I can't see that this approach creates any risks for anyone unless it brings the amount claimed over the £5,000 limit. But if it doesn't then there is no problem. If the matter went to court then I would suggest that the N1 was worded to claim the contractual rate of interest or in the alternative, 8% pursuant to section 69 blah blah blah

 

 

I thought that the £5000 limit was just the claim amount itself and not the interest itself. I was advised the other day by Jonni2bad that the £5000 limit was before interest not including. Can you clarify this please as different people are saying different things.

[Spiceskull]

The £5K limit applies to your claim (charges plus charges interest, plus contractual interest if you are going down that route)

 

s.69 interest is not includd in the £5K limit, but you cannot charge s.69 PLUS contractual - it is one or the other...

[skyrocket123]

Let me just clarify: the 8% interest that we work out in the exel spreadsheet is the s.69 interest? And your claim for charges could be up to £5000 and this interest is not included in the £5000?

Sorry I am a bit thick

[barracad]

Let me just clarify: the 8% interest that we work out in the exel spreadsheet is the s.69 interest? And your claim for charges could be up to £5000 and this interest is not included in the £5000?

 

Correct.

[skyrocket123]

Whilst waiting for an answer I rang my local county court and the man there said the £5k limit was including the 8% interest. This is getting very confusing.

[Spiceskull]

Whilst waiting for an answer I rang my local county court and the man there said the £5k limit was including the 8% interest. This is getting very confusing.

We are checking this now...the status has been that the s.69 was NOT included as part of the claim limit of £5K, and this has been what people have been applying to date. However, interest claimed directly in your claim (such as contractual interest) IS included in the limit.

 

When are you raising your claim?

[skyrocket123]

Well I am waiting to send my prelim letter at the moment but the amount depends on this answer really.

[skyrocket123]

Any update on this question?

[lee6370]

Your interest is taken into account when calculating the cost of your claim, so if adding the 8% interest takes you over £5'000, you'll have to pay £250 to money claim instead of £120. This maybe what the man at the court meant.

[skyrocket123]

There seems to be a lot of people confused by wether the 8% interest is included in the £5k limit and it seems very hard to get definitive answer. It says in the Lawpack book that interest is included yet I was told it isn't from jonni2bad and others. Does anyone actually know?

[alanfromderby]

CPR 26.8 (2)(b) states that claims for interest should be excluded from the decision on whether a claim should be deemed to be within the £5,000 limit. The lawpack is in error on this, and I understand somebody is currently trying to get in touch with the writers regarding this error.

 

It would certainly be worth getting back to the person at the court who advised that this was not the case, and ask why they gave the advice they did in the light of CPR 26.8 - we would be interested to hear what their response is.

 

My understanding is that the total money including interest etc should be entered in the amount claimed box - however, the interest should be disregarded when it comes to deciding on the track.

 

If your claim is affected by this, to ensure that it goes on the correct track, I would advise including on the Allocation Questionnaire that the claim be heard through Small Claims Track, quoting CPR 26.8 as the reason for your assertion.

[Spiceskull]

The £5K limit applies to the claim only. In most cases this will be penalty charges and penalty interest (where it is applied and claimed for)

 

Court costs and s.69 interest (8% APR) are NOT included in the £5K limit...this is covered in the Civil Procedure Rules [26.8 (2)] here

[bfb]

If one has been overdrawn and a charge has been made then the bank will have been charging interest on the charge from the date of the charge

 

therefore to include interest at the overdraft rate used by the bank is consistent ,the unlawful charge is not a one off but a continuing penalty in extra interest on an overdraft,

 

additionally charging the interest at 8% compounded is also logical because that is what has been foregone by the bank charging the fee and the interest on it

 

The claimant could have used the money t pay off debts or invest. Both of these are natural and reasonable consequences of the bank's uinlawful actions and are not too remote

 

see my thread started before I saw this one

[bram stoker]

If one has been overdrawn and a charge has been made then the bank will have been charging interest on the charge from the date of the charge

 

therefore to include interest at the overdraft rate used by the bank is consistent ,the unlawful charge is not a one off but a continuing penalty in extra interest on an overdraft,

 

additionally charging the interest at 8% compounded is also logical because that is what has been foregone by the bank charging the fee and the interest on it

I think you may find that's what my spreadsheet does, but the contractual charge is a replacement for the 8% with their percentage that they charge us.

 

It's all so complicated, I'm so glad I only have to calculate it and not determine law on it.

[blueskies]

I started entering the information into a spreadsheet and after having entered a few days worth of entries decided to put the interest on. I then discovered the as part of my account services that no interest is charged on the first £250 of authorised overdraft. Beyond that it is at 9.9%APR, and unauthorised overdraft is 20% APR. Having scan read through the rest of the account I think it will come to less than an average of the 8% County Court rate. It will work for some people but for me it won't. Do you think that I could use a flat rate of 9.9% as contractual rate? (P.S. it would be lovely to use the 20% figure as I never authorised the withdrawals made by them but cannot see a judge agreeing with me).

 

What do people think?