hsbc bank charges **WON in COURT post-OFT!!!**

[syds mum]

hi new member today.. had a read of faqs... think i am in right place...

started in march 2007 i am in court process at mo.. had transfer to my local court today!! not heard from hsbc since beginning of may.. was gonna write to their solicitors (DG) anyone got advice???

[freakyleaky]

Hi syds mum.I can see you are quite far along the process but i will just post some advice that we give people at the claim stage just so you can see if you are up to speed.This is if you have filed your claim on line with MCOL. Just shout if you need help.

 

Once you have filed your claim, you need to send 2 copies of your schedule of charges, clearly marked with your claim no. + a brief covering letter asking for them to be filed with your claim to:

 

 

 

The Court Manager,

Money Claim Online

Northampton County Court

21-27 St. Katharine's Street

Northampton

NN1 2LH

 

Dear Sir/Madam

 

(Your Name) –v- (Bank)

Claim No: ********

Date Issued: xx/xx/xx

 

Please find enclosed a schedule of penalty charges taken from me by the defendant, along with interest claimed at the annual rate of 8% pursuant to section 69 of the County Court Act. The interest in addition to the amount in charges equates to the total amount of my claim, namely £(AMOUNT).

 

I respectfully request that the enclosed schedule should be attached to the particulars of my claim.

 

Yours sincerely,

 

 

 

 

Wait until you receive the Notice of Acknowledgement (not the Notice of Issue) from the court and then send a copy to the bank’s solicitors, since they are the ones who will now be dealing with your claim

DG's details will be on page 2 of the acknowl.

 

 

 

Dear Sir,

 

(Your Name) -v- (Bank)

Claim No: ********

Date Issued: xx/xx/xx

 

Please find enclosed a copy of my schedule of charges relating to the above claim.

 

(If, and only if, you are claiming overdraft interest on your penalties, also include this paragraph)

 

 

I understand you have a policy of initially rejecting claims for overdraft interest. However, should this be the case after you have reviewed my claim, you should be aware that my claim for overdraft interest has been meticulously calculated and double checked. It only ever relates to the cumulative charges within the overdrawn balance of the account at the point that the overdraft interest was debited

 

If it is that in your view the interest is not claimable, I am prepared to discuss this with yourseves and the judge in court.

 

Yours sincerely,

[freakyleaky]

New---after 28 Days - Maybe No Aq!!!!!!!

 

This is a must read thread at your stage!

[freakyleaky]

If you have been sent an aq

 

When you have filed your AQ................

[syds mum]

:) thanks freakyleaky will read every last bit of these threads but got to get kids in bed... thanks and will post again soon!! will send nudge letter tommoz once i have read everything

[syds mum]

hi its me again just had my court date in post this morn its not till 24th sept but i am unsure of when i have to send in my bundle is it 21 days from today?? and am i right in thinking i need a comparitor case in my bundle if so is there a thread on here where i can get a copy?? have checked out the treads you adviced last time and have saved the court bundle to my pc this does incule some evidence of cases already proved!!!... also you said to write to the court with my summary of charges, do you mean send it aswell as a copy in the bundle or do the charges have to be added to particulars of claim??? have sent your 1st nudge letter to DG but gonna send another telling them got court date so dab in!!

[icantlogin]

You will need to send a copy of your schedule of charges to the court and request that it gets attached to your claim. If you do not do this, it may delay your claim as the court will have to contact you and ask for you to send it in. also, if you haven't done this already, you will need to send a copy of your charges to DG aswell.

[syds mum]

will do.... just wondered when you have to tell them what the charge is, on my statements all it says is "total charges or noitifed fees/charges" is this what i have to put in the "in respect of... colume on my schedule??? thats is what i have put but just checking its right!!

[Castlebest]

For personal bank accounts just copy what HSBC have put on your statement.

 

pete

[syds mum]

thought so thanks a bunch love!!!

[syds mum]

does any body know if you can submit a copy of your court bundle on disc instead of photo copying everything?? surely they have computers at court!!! wondered if anyone had done this or even asked!! we can always follow up with hard copies if needed! as everyone has said it rarley goes to court and seems a waste of trees!!! :)

[freakyleaky]

Unfortunately the courts only accept the hard copies. I totally agree with you about how wasteful it is but dg and hsbc don't seem to care.

 

Its ironic reading the leaflets from hsbc all about how they only use recycled paper in order to save the planet!

[lateralus]

hi syd's mum, i've just posted to you on the other thread - it might be helpful if you copy out the court's directions exactly - on here for us to take a peak at - just xxx out personal details.

[syds mum]

hi here is the directions...

 

on 3rd July 2007

 

the papers in this claim were considered by district Judge Douce who allocated the claim to the small claims court track to be heard

 

at Derby County Court, Combined Court Centre, Morledge, Derby

 

on 24th September 2007

 

with time estimate of 1 hour

 

The following directions apply to this claim:

 

1) The Claimant shall within 21 days or service of this order send to the Defendant and to the Court:

 

a) A schedule (unless one has already been sent to defendant and to the court) setting out each charge repayment of which is sought, showing account number, date,amount and reason ( if any) for that charge being made;

 

b) A statement of evidence, if such is to be relied upon, is surpport of the claim together with copy statements or other relevant documents.

 

If the Claimant fails to comply with this order, the claim will be struck out without further order.

 

2) The Defendant shall within 21 days thereafter file and serve a witness statement in response to the Claimant's schedule, stating in repect of each item claimed;

 

a) Pursuant to what contractual provision such charge was made, producing a copy of the contractual document relied upon;

 

b) Whether such charge is excepted to be a penatly, and if not, why not,

 

c) If such charge is alleged to be a pre-estimate of the Defendant's loss incurred by the Claimant's actions (whether or not such action is to be treated as a breach of the contract between the parties), all facts and matters intended to be relied upon as showing that such is a proper estimate of such loss, and all evidence to be adduced a trial as to what the true cost of dealing with the matter was.

 

If the Defendant fails to comply with this order, the defence will be struck out without further order and the Claimant may enter judgment.

 

3) The original documents shall be brought to the hearing.

 

4) The court must be informed immediately if the case in settled by agreement before the hearing date.

 

have copied this word for word sorry took time!!!

[lateralus]

it's just what we needed - yes, this is not one of the usual ones - but it's good - works as well as the draft order i'd think.

ok, you need to do as you thought - send them (again) a schedule of claims - even though it says you don't have to send again - do it anyway - and be sure the schedule is complete - meaning each charge listed - oldest to newest, each with a date charged, a name (as it appears on the statements), and the amount. plus the 8% interest as calculated by the simple spreadsheet and claimed on the court claim plus the court filing fee.

you also need to send the statement of evidence - ) A Statement of Evidence: (post 55 in the new strategy): New strategy for Allocation Questionaires note here: hsbc uses the service charge defence - so use the first letter in post 55

 

that is the basic one - then you need to make it specific to your case - so let me find one that has done that so you'll get the idea:

 

here is how lotte did it - with her comments - just edit where you need to:

 

1. The Claimant has an account number ********** with the Defendant which was opened as a student account on or around October 1991 and updated to a standard joint current account on or around July 1996.

 

2. During the period in which the Account has been operating the Defendant debited numerous charges to the Account in respect of purported breaches of contract on the part of the Claimant and also charged interest on the charges once applied.

 

3. A list of the charges applied is attached to these particulars of claim.

 

4. The Claimant submits that the charges levied to his bank account, as set out in the attached schedule, are, notwithstanding the contention of the defendant, penalty charges arising from and relating directly to breaches of contract on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

 

5. It is admitted that the Defendant’s charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant which, by virtue of the legislation cited in paragraph 4 above, exercises the contractual term in respect of such charges with a view to profit.

 

6. The Defendant avers that the charges levied are legitimate fixed price contractual services, unrelated to breaches of contract, which are therefore not required to be a pre-estimate of loss incurred on the part of the defendant. The Claimant further submits that this contention is merely an attempt to ‘cloak’, or disguise, their penalties in order to circumvent the common law and statutory prohibition of default penalty charges with view to a profit.

 

7. The Claimant believes the definition of a 'service' to be a provision of knowledge, skill or other transferable facility that benefits the consumer, and one that the consumer agrees is at a reasonable market rate commensurable with the service provided. The Claimant believes it to be inconceivable that the charges levied to his account by the defendant could be any form of ‘service’, rather than a penalty.

 

8. I understand the definition of 'breach of contract' to be the failure of a party, without legal excuse, to perform a contractually agreed obligation pursuant to any or all of the terms agreed within that contract. I have an overdraft with the defendant. This overdraft has a contractually agreed limit, which is an express term of the bank account contract between myself and the Defendant. When I exceeded this agreed overdraft limit, therefore breaching an express term of the contract between myself and the Defendant, I was consequentially penalised for each such breach by way of a charge ranging from £18 to £27.50.

 

9. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79, Lord Dunedin stated that a clause is a penalty if it provides for;

 

"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part;”

I.e. if it is designed to scare or coerce or is used as a threat. It is submitted that the charges applied are not representative of any 'service' provided by the Defendant, but instead are punitive, and held "in-terrorem".

 

10. The Claimant further submits that the Defendant’s contention that the charges are now a legitimate service charge represents a contradiction to materials published by the bank previously. Midland Bank’s 1996 Terms and Conditions section 7.9 state: “As well as charging interest for unauthorised overdrafts, we may also charge a fee to cover the cost of the administration involved”

Is this the right thing to argue or have I completely misunderstood?! Also still not really clear on which T&C's and how many to use. Don't want to go for overkill - don't want to miss anything really important ...

 

11. The Claimant refers to the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair within their interpretation of the Unfair Terms in Consumer Contracts Regulations 1999. With regard to the ‘cloaking’ or disguising of penalties, the OFT said this;

 

“4.21 The analysis in this statement is in terms of explicit, transparent default fees. Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for ‘agreeing’ or ‘allowing’ a customer to exceed a credit limit is no different from a customers default in exceeding a credit limit.) The UTCCR’s are concerned with the intentions and effects of terms, not just their mechanism”.

 

12. As submitted above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the account contract between itself and the Defendant. The Claimant vehemently refutes the Defences contention that they are legitimate contractual service charges.

 

13. However, and without prejudice to the above, in the event the charges were accepted by this honourable court as being a fee for a contractual service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.

 

14. Further, under the UTCCR:

 

"5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was."

 

Schedule 2 also includes such clauses (to define examples of unfair clauses) as:

 

"(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

 

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract."

 

The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract.

 

15. Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as a service charge. It is not disputed that the Defendant is entitled to recover its damages following my breaches of contract, and it is entitled to include a liquidated damages clause. I accept without reservation the banks right to recover its actual losses or a genuine pre-estimate thereof. A penalty however, is unenforceable.

 

16. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850 which states that a contractual party cannot profit from a breach and that the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred.

 

17. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. One of these principles being -

 

"The sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach"

 

 

18. The Claimant will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

19. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as -

 

"(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"

 

20. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. By reviewing the charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.

 

21. For their recent BBC2 documentary “The Money Programme”, the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.

 

22. It is submitted that the Defendant’s charges are applied by an automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. It is therefore impossible to envisage how the Defendant can incur costs of between £18 and £27.50* by carrying out this completely automated process. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

*The charges are shown on my statement as being taken out as sums between £18 and £100. I know the ones that are £100 are actually 4 x £25 charges but have nothing to demonstrate this. If I put £100 they'll say their charges were never that much.

 

 

23. On 22nd May 2006, the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".

 

24. The Claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states bank charges are used to fund free banking for all personal customers as a whole.

Is it worth putting this in as I am taking HSBC to court and not Lloyds TSB?

 

25. As set out previously, it is submitted that The Defendant’s charges can not be considered to be a service charge. In arguing that they are, they also effectively admit that their charges make profits. The Defendant seemingly contends that their charges are not subject to any assessment of fairness whatsoever. This implies they can set these fees at whatever level they like without limit or regulation. Similarly, as set out above, the charges cannot be considered to be liquidated damages. They, by The Defendant's own admission, are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, held “in-terrorem", and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

 

26. Accordingly the Claimant claims:

 

a) the return of the amounts debited in respect of charges in the sum of £701.50 and any interest charged thereon;

 

 

b) Court costs;

 

c) The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year, from the date that each charge was applied to 23 April 2007 of £179.72 and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of ????.

Not sure what daily amount is - know it is somewhere on this site but if anyone has it to hand would be grateful!

 

 

I, the Claimant, believe all facts stated to be true.

 

Signed, dated.Documents attached in support of this statement

 

* HSBC and Midland Bank’s Terms and Conditions

 

* Office of Fair Trading report, April 2006

* House of commons early day motion, May 2006

* BBC commission conclusion - BBC NEWS | Business | The Money Programme bank commission

* Australian Default charges report, Nicole Rich - Domain Names, Web Hosting, Web Design, Search Engine Optimisation, and Search Engine Marketing at Melbourne IT

 

 

 

 

and for good measure - here is another one:

 

Claim Number: XXXXXXXXX

 

In the XXXXXXXX County Court

 

Between:

 

 

X.XXXXXXX

(Claimant)

 

 

 

and

 

 

 

 

HSBC Plc

(Defendant)

 

 

 

 

_________________________ ______

Statement of Evidence

 

 

_______________________

 

 

 

 

 

1. The Claimant has an account 00000 with the Defendant which was opened on or around 19XX.

 

2. During the period in which the Account has been operating the Defendant debited numerous charges to the Account in respect of purported breaches of contract on the part of the Claimant and also charged interest on the charges once applied.

 

3. A list of the charges applied is attached to these particulars of claim.

 

4. The Claimant submits that the charges levied to his bank account, as set out in the attached schedule, are, notwithstanding the contention of the defendant, penalty charges arising from and relating directly to breaches of contract on the part of the claimant. As a contractual penalty, the charges are unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations 1999, the Unfair Contracts (Terms) Act 1977, and the common law.

 

5. It is admitted that the Defendants charges were levied in accordance with the terms and conditions of the account in question. However, it is submitted that the Defendants charges are not related to or intended to represent any actual loss arising from a breach of contract, but instead unduly enrich the Defendant which, by virtue of the legislation cited in paragraph 4 above, exercises the contractual term in respect of such charges with a view to profit.

 

6. The Defendant avers that the charges levied are legitimate fixed price contractual services, unrelated to breaches of contract, which are therefore not required to be a pre-estimate of loss incurred on the part of the defendant. The Claimant further submits that this contention is merely an attempt to ‘cloak’, or disguise, their penalties in order to circumvent the common law and statutory prohibition of default penalty charges with view to a profit.

 

7. The Claimant believes the definition of a 'service' to be a provision of knowledge, skill or other transferable facility that benefits the consumer, and one that the consumer agrees is at a reasonable market rate commensurable with the service provided. The Claimant believes it to be inconceivable that the charges levied to his account by the defendant could be any form of ‘service’, rather than a penalty.

 

8. I understand the definition of 'breach of contract' to be the failure of a party, without legal excuse, to perform a contractually agreed obligation pursuant to any or all of the terms agreed within that contract. I have an overdraft with the defendant. This overdraft has a contractually agreed limit, which is an express term of the bank account contract between myself and the Defendant. When I exceeded this agreed overdraft limit, therefore breaching an express term of the contract between myself and the Defendant, I was consequentially penalised for each such breach by way of a charge of £10-£75.

 

9. In the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79, Lord Dunedin stated that a clause is a penalty if it provides for;

 

"The essence of a penalty is a payment of money stipulated as in-terrorem of the offending part;”

I.e. if it is designed to scare or coerce or is used as a threat. It is submitted that the charges applied are not representative of any 'service' provided by the Defendant, but instead are punitive, and held "in-terrorem".

 

10. The Claimant further submits that the Defendant’s contention that the charges are now a legitimate service charge represents a contradiction to materials published by the bank previously

 

11. Additionally, the claimant believes there to be a high possibility that the terms and conditions of her account contract explicitly describe the charges as to be levied in instances of breaching those terms. This is true of the contracts of other customers of the defendant that the claimant is aware.

 

12. The Claimant refers to the statement from the Office of Fair Trading (April 2006), who conducted a thorough investigation into default charges levied by the British financial industry. While the report primarily focused on Credit card issuers, the OFT stated that the principle of their findings would also apply to Bank account charges. They ruled that default charges at the current level were unfair within their interpretation of the Unfair Terms in Consumer Contracts Regulations 1999. With regard to the ‘cloaking’ or disguising of penalties, the OFT said this;

 

“4.21 The analysis in this statement is in terms of explicit, transparent default fees. Attempts to restructure accounts in order to present events of default spuriously as additional services for which a charge may be made should be viewed as disguised penalties and equally open to challenge where grounds of unfairness exist. (For example, a charge for ‘agreeing’ or ‘allowing’ a customer to exceed a credit limit is no different from a customers default in exceeding a credit limit.) The UTCCR’s are concerned with the intentions and effects of terms, not just their mechanism”.

 

13. As submitted above, the Claimant believes the charges levied to his account to be disproportionate contractual penalties, arising from clear and demonstrable breaches of express terms of the account contract between itself and the Defendant. The Claimant vehemently refutes the Defences contention that they are legitimate contractual service charges.

 

14. However, and without prejudice to the above, in the event the charges were accepted by this honourable court as being a fee for a contractual service, the claimant submits that they are unreasonable under section 15 of the Supply of Goods and Services Act 1982.

 

15. Further, under the UTCCR:

 

"5. - (1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

 

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term.

 

(3) Notwithstanding that a specific term or certain aspects of it in a contract has been individually negotiated, these Regulations shall apply to the rest of a contract if an overall assessment of it indicates that it is a pre-formulated standard contract.

 

(4) It shall be for any seller or supplier who claims that a term was individually negotiated to show that it was."

 

Schedule 2 also includes such clauses (to define examples of unfair clauses) as:

 

"(i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract;

 

(j) enabling the seller or supplier to alter the terms of the contract unilaterally without a valid reason which is specified in the contract;

 

(m) giving the seller or supplier the right to determine whether the goods or services supplied are in conformity with the contract, or giving him the exclusive right to interpret any term of the contract."

 

The defendant is a multi-national corporation. The term regarding charges was inserted unilaterally in contract. The contract was pre and mass produced and I had no opportunity to negotiate the clause, or indeed any of the contract.

 

The cost of HSBC's charges have increased on more than one occasion during the period in which my account was held, neither time was I given the opportunity to negotiate, or even notified of this increase. This means the bank has unilaterally altered the terms of my account contract to my detriment, and to their advantage.

 

16. Following on from the above, the claimant does not accept The Defendants contention that the charges are enforceable as a service charge. It is not disputed that the Defendant is entitled to recover its damages following my breaches of contract, and it is entitled to include a liquidated damages clause. I accept without reservation the banks right to recover its actual losses or a genuine pre-estimate thereof. A penalty however, is unenforceable.

 

17. The Claimant cites the case of Robinson v Harman [1848] 1 Exch 850 which states that a contractual party cannot profit from a breach and that the charge for a loss suffered from a breach of contract should be the amount necessary to put both parties in the same position before the breach occurred.

 

18. Lord Dunedin in the case of Dunlop Pneumatic Tyre Co v New Garage & Motor Co [1915] AC 79 set down a number of principles in definition of a penalty clause and how such clause may be ascertained from a liquidated damages clause. One of these principles being -

 

"The sum is a penalty if it is greater than the greatest loss which could have been suffered from the breach"

 

 

19. The Claimant will further rely on numerous recorded authorities dating throughout the 20th century up to the most recent case of Murray v Leisureplay [2005] EWCA Civ 963, all of which have upheld and reinforced the principles set down by Lord Dunedin defining contractual penalty clauses and the unenforceability thereof.

 

20. Further, under the Unfair Terms in Consumer Contracts Regulations 1999, schedule 2 (1) includes to define an example of an unfair clause as -

 

"(e) requiring any consumer who fails to fulfil his obligation to pay a disproportionately high sum in compensation;"

 

21. On numerous occasions, the Claimant has requested that the Defendant justify its charges by providing details of the costs incurred as a result of my contractual breaches. Each time those requests were rebutted or ignored. MAY DELETE

 

22. In a recent study undertaken in Australia, (Nicole Rich, “Unfair fees: a report into penalty fees charged by Australian Banks”) it was estimated that the cost to an Australian Bank of a customers direct debit refusal was estimated to be in the region of 54 cents. By reviewing the charges against the above figure, the study estimated that banks could be charging between 64 to 92 times what it costs them to process a direct debit refusal. The study’s key findings stated that in its opinion the Australian Bank’s cheque and direct debit refusal fees were likely to be penalties at law.

 

23. The Defendant, or indeed any of the UK banks, has never published any information to support how their charges are calculated, or what their actual costs associated with such breaches are, or what revenue they derive from such charges.

 

24. For their recent BBC2 documentary “The Money Programme”, the BBC appointed a commission of former senior banking industry figures and business academics to attempt to ascertain the actual costs to the UK banks of processing a customer’s breach of contract. They concluded that the absolute maximum conceivable cost that could be incurred by a direct debit refusal or overdraft excess is £2.50, and of a returned cheque £4.50. They did state however, that the actual cost is likely to be much less than this. The commission also estimated that the UK banks collectively derive as much as £4.5billion in profit a year from their charging regimes.

 

25. It is submitted that the Defendants charges are applied by an automated and computer driven process. This process consists of a computer system ‘bouncing’ the direct debit, and sending out a computer generated letter. It is therefore impossible to envisage how the Defendant can incur costs of £** by carrying out this completely automated process. Note that the letter received notifying of a charge is identical in every instance, and if multiple breaches occurred on the same day, a separate letter will be sent in each instance.

 

26. On 22nd May 2006, the House of Commons passed an early day motion which welcomed the OFT's statement that default charges should be proportionate to the actual loss incurred. The house described such default charges as "exorbitant" and "excessive".

 

27. The Claimant also cites a radio interview in 2004 with Lloyds TSB’s former head of personal banking, Peter McNamara, in which he states bank charges are used to fund free banking for all personal customers as a whole.

 

28. As set out previously, it is submitted that The Defendant’s charges can not be considered to be a service charge. In arguing that they are, they also effectively admit that their charges make profits. The Defendant seemingly contends that their charges are not subject to any assessment of fairness whatsoever. This implies they can set these fees at whatever level they like without limit or regulation. Similarly, as set out above, the charges cannot be considered to be liquidated damages. They, by The Defendant's own admission, are not a pre-estimate of loss incurred as a result of the breach of contract. The charges are punitive, held “in-terrorem", and unduly and extravagantly enrich the Defendant. As such, they are a contractual penalties and unenforceable at law.

 

29. Accordingly the Claimant claims:

 

a) the return of the amounts debited in respect of charges in the sum of £855 and any interest charged thereon;

 

 

b) Court costs;

 

c) The claimant claims interest under section 69 of the County Courts Act 1984 at the rate of 8% a year, from 01/07/03 to 13/04/2007 of £ 124.28and also interest at the same rate up to the date of judgment or earlier payment at a daily rate of £0.21.

 

 

I, the Claimant, believe all facts stated to be true.

 

Signed, dated

 

 

 

 

so, just read through and make the little changes that will make it pertain to your claim.

[syds mum]

thanks for that will read it properly when i get a minute's peace!!! (kids)... i did think it was different from the others cos most advice i had did contradict what it said on my directions!!! was confussing me:confused: !!! is clear now and will get it all in order and let you know!! just one thing am i right in thinking that even tho my AQ has been dispensed with i will have to pay £100?? my claim is for £2065.87 + court cost £120.00! it does say if claim over £1500 still have to pay fee!

 

syds mum

[pinkduchess]

best to double check on the allocation fee. some courts are still requesting it even with no AQ. get the name of person, time of call when you ask this.

[syds mum]

hi all have been doing my bundle and have done a schudule of charges on your spread sheet (my other one was using the money save expert one) and of course the interest has been calaculated up to yesterday therefore the total amount claimed has changed is this still o.k to send to court,if so do i need to cover the reason for differance in a letter??

[freakyleaky]

No you have to have the same figure. Go back to the spradsheets and when you enter the fighures, change the date on your computer to the same date that you entered your claim. It will work the interest out to the same ammount.

[syds mum]

o.k love thanks... on the case now...(pardon the pun) just got to make the figures add up to same as i claimed when filed with mcol... do you know what the daily interest rate is regarding money from date of claim to date it will be resolved?? is it 21pence per day or is everyones different?

[lateralus]

charges x 0.00022

 

so, roughly if charges are 2,000 - would be 44p per day

[syds mum]

hi there need advice i have been looking thu treads and realised i may need to check my particulars of claim....

i did mine on mcol and not sure if i am o.k...

heres what my poc say...

 

1. between *****and ***** the defendant debited numerous charges from the claimants account.

 

2.the charges are an unfair penalty under the unfair terms and cosumer contracts regulations 1999, because they are a disproportionately high sum in compensation compared to the cost of the purported breach.

 

3. under the law of penalties, the charges are an unlawful, extravagant penalty.

 

4. under the county courts act 1984 section 69 the claimant is entitled to interest of 8% per annum from the date they were deprived or the money. (***** to*****) this totals £***.** accruing at daily rate or 0.021% until judgment or payment.

 

5. the claiment asks the court to enter judgment in their favour for £***.** plus interest, totaling £***.**

 

 

is this o.k or if not can it be rectified when i send in a copy of my schdule of charges ( it will have my account number on)??

[syds mum]

could someone please check out above thread as worried i have missed something on poc!!! thanks

[lateralus]

they are a little different from mine and don't have absolutely everything but i'm thinking i've seen a lot worse and if they aren't up to scratch - you'll hear from the court and then you can change them. i think i'd let them go as is - if you change them it costs £35 - if the court tells you to change them, it doesn't cost.

 

and yes, put your account number and sort code on your schedule of charges.

[freakyleaky]

Hi SM, your poc's are more or less the same as mine and I got my money without them being questioned! The main problem I nearly had was the schedule of charges which was lacking in detail. Luckily I found this site and sent more detailed SOC's to the court and dg before I was asked!