Allowed Or Not

[Advoc8]

Interalia your insistence on the collection of this money may amount to an attempt to obtain property by deception,which is a violation of section 15 of the Theft Act 1968.

Two problems with this that mean that there's no point trying it.

 

1. s.15 does not apply to electronic transactions.

 

2. If a complaint was made under s.15A (dishonest appropriation of a money transfer) it would still fail as the requirement for dishonesty wouldn't be met - if the person (bank) taking the money believes he has the right to do so it's not dishonest.

[webbscatering]

Thats Good, that we now know the correct terminology, how does this help my case, in one hand i have a letter from the bank with the threats giving me till 2nd April to cover the arrears on the other they have settled the whole loan without permission before the 2nd April. Now I believe they can get back their arrears at anytime they see fit where does it state they have the rights to settle a loan early without my consent.

[Advoc8]

If I understand this correctly they've moved money from a current account to a loan account and cleared the loan rather than the arrears - bear with me because it's the nature of the accounts that is important here.

 

Although they can use set-off between different current accounts there is case law that says they can't do it between a current account and a loan account. The particular authority to use is:

Bradford Old Bank Ltd v Sutcliffe [1918] 2 KB 833, a Court of Appeal decision. The crucial paragraph of the judgment is:

The sums paid into the current account are appropriated by the customer to that account, and cannot be used by the bank in discharge of the loan account without the consent of the customer. No customer could otherwise have any security in drawing a cheque on his current account if he had a loan account greater than his credit balance on current account.

Although this is an old case the decision has been applied to other cases in more recent years and still holds good.

 

The other crucial thing to bear in mind are any terms in the loan agreement that might purport to allow them to do this as it's something else they can hide behind.

 

Can you get back to us on the exact nature of the accounts and whether there appear to be any terms in the loan agreement that might purport to allow them to do this?

[webbscatering]

The account is a business account, i may have to request a copy of the loan agreement though

[Advoc8]

So we're talking about a business current account and a business loan account then?

 

The other question is having established that the bank probably shouldn't have done what they did what do you want to happen now?

[webbscatering]

In normal circumstances I would have just paid and left it at that, but in the nature of how they have gone about this I want the money back into my account less the agreed arrears.

[Advoc8]

We need to take this in small steps to make sure we've covered all the options, so to start with it I understand that...

 

You want your loan 'reinstating' with the debit balance it would have at this point in time if there were no arrears, to be repaid at the amount per month and for the number of months it had left to run prior to their action.

 

You want the current account crediting with the amount they took to pay off the loan minus the amount of any arrears.

 

This right?

 

If they refuse to do this what do you want to happen?

[webbscatering]

Sorry just finished work back home now, right Its obvious they are going to refuse so the ombudsman looks tempting to start with.

[webbscatering]

Sorry so far you are correct, as they are legally obliged under the offset rule they can take the arrears on any loan or credit card when they can. So let them have it and give me the balance, but they must also prove the arrears are the amount they say they are.

[Advoc8]

What I'm saying is the case law I quoted says they've no right to move money from a current account to a loan account without your consent full stop. The problem comes in deciding what you want to do about it and what you can then do if they refuse.

 

It's a case of assessing what real harm this has done to you and taking the appropriate action.

 

If for example this transfer has caused you some financial loss that you can prove then you can pursue them for damages.

 

On the otherhand if all you've suffered is some upset (not that I'm trivialising that in any way) and inconvenience tbut no financial loss then the courts really can't do much and in that case the Ombudsmen might be the best route so the bank gets a slap on the wrist.

 

If you do contact the ombudsmen quote the case law I gave in my earlier post in the complaint as it's an obscure bit of law and you'll steer them in the right direction.

[webbscatering]

No im just niffed, the money is working capitol and its not until later when the financial hardship will come into play, by then it would be all forgotten about. But as a matter of law, it is suggested something has been breached irrespective of how i feel surely they cannot refuse to pay back, on the grounds they do not have to pay me, if they do not want to. It must be a matter of you got to pay or else. Do see my angle?

[Advoc8]

I see your angle, I know from bitter experience how something like this can cause problems in business and I agree totally with you.

 

If the best thing for you is to have the position reversed I'd write to them and tell them this is what you want. I'm not too sure but I believe that if there's a complaint made to the Financial Ombudsmen the bank gets charged?

 

I wonder if what's needed is a two-pronged approach saying you want the position reversed or you'll take action to recover the damages you'll suffer (to be assessed somehow - have a think if you can estimate what it will cost you) AND complain to the ombudsmen. Put in a letter addressed to the appropriate department and give them a couple of weeks then follow up. Are you in a position to threaten to move banks?

 

I'm just thinking off the top of my head here and this might all be a load of cobblers. This does need a bit of time to think about properly and a bit more research I think...

[Advoc8]

One other point - was the loan a personal loan or a business loan? I note that they defaulted you under the consumer credit act? This obviously doesn't change the current position but if the loan wasn't one that is regulated by the act it's yet more ammunition for a complaint.

[webbscatering]

I agree with everything you have stated, much thought will be needed to get my point over by not a difficult one. Thanks to you Sir, and your knowledge in this field this has set the bench mark for the letter intead of going all out gung-ho which is my normal approach the use of lawfull facts holds much more water. Maybe I will talk more later my midnight oil has burnt out and so am I, Cheers Kev

[gizmo111]

I phoned the bank soon as i received the letter and was told by the assistant I am two payments behind which works out to £534 this is the last two months payments and not old debts.

 

Do you have any old debts outstanding - with the bank? Or is this the only one and is current.

[Guest Zooman]

2 quick questions

 

1. do you trade as a sole trader/partnership or a limited company?

 

2. who took the loan out, you as an individual or the company?

[webbscatering]

Hi Gizmo, no just the loan and absolutley nothing else. I dont know if i have been given an ace card, but Martineau Johnson has requested that I instruct the courts that the claim has been settled. As far as im concerned why should i comply with their wishes unless the banks return from that claim the loan money they have unlawfully taken.

[webbscatering]

To be honest lets go to court, I will stand up in front of the judge and tell them what exactly they have done and I am well within my rights as a laymen to be heard.

[Advoc8]

To be honest lets go to court, I will stand up in front of the judge and tell them what exactly they have done and I am well within my rights as a laymen to be heard.

 

I don't actually think doing what you propose is going to achieve anything as the original claim has been settled if I understand it correctly. What they've done after is a separate event and is a separate cause of action.

 

All you will do is irritate the judge if you act as you say you will. That won't help you.

 

When's the court date?

[webbscatering]

2 quick questions

 

1. do you trade as a sole trader/partnership or a limited company?

 

2. who took the loan out, you as an individual or the company?

 

Hi Zooman, Im a sole trader and i only took the unsecured loan out.

[webbscatering]

I don't actually think doing what you propose is going to achieve anything as the original claim has been settled if I understand it correctly. What they've done after is a separate event and is a separate cause of action.

 

All you will do is irritate the judge if you act as you say you will. That won't help you.

 

When's the court date?

 

Somehow your right but in another way not entirely correct, I have been involved with various court cases and I have always found every Judge to be sympathetic to a laymen and as against a corporate giant trying to come down hard on the little man. But your advice has been good so far, the court date is 19th April 2007.

[webbscatering]

Hi Zooman, Im a sole trader and i only took the unsecured loan out.

 

Any particular reason?

[webbscatering]

Somehow your right but in another way not entirely correct, I have been involved with various court cases and I have always found every Judge to be sympathetic to a laymen and as against a corporate giant trying to come down hard on the little man. But your advice has been good so far, the court date is 19th April 2007.

 

Maybe a good nights kip, did'nt quell my anger!!

[Advoc8]

You've got a little time to play with then. I would probably in the first instance write a letter along the lines I suggested asking for the loan to be reinstated (if that's what you want) and saying that you won't inform the court of the settlement until that loan has been reinstated as you've grounds that their action in off-setting the loan was unlawful.

 

Give them 7 days to comply, meanwhile some thought is needed.

 

 

I would say the problem is that if you go into court with the position you'd end up either with no judgment or a decision that could be appealed and would just spin this out and you'd end up in no better a position.

[webbscatering]

True! thats the risk though, which I dont think none of us want to gamble on, but the threat is the spin though, thats the perfect angle I was looking for so I now have two guns pointing at them, the Bradford Old Bank and the Court settlement letter.....they got to yield, surely?