The Reclaiming Process - Ideas

[Smasher]

I posted all this on the old forum already, but as its gone now I'll put it all together & post here.
As many of you may know already, in addition to the test case against the major bankers, the OFT also conducted an investigation into personal current accounts (PCA report). In this report, they found that over 30% the banks total revenue was generated by unauthorised overdraft charges (now known as arrangement fees). This EXCLUDES charges for unpaid items such as direct debits, bounced cheques & 'debit card misuse'.
For more information on the PCA report visit the Legal Beagles OFT Forum. You may need to register to view it, but these guys have been working with the OFT in response to this report & have lots of great info on this and the test case.

Prior to the mass changing of terms & conditions by most of the banks in preperation for the test case, unauthorised overdraft charges were described in the terms & conditions as charges to cover management & administration costs of dealing with instances of people exceeding their overdraft limit or entering into an overdraft where no facility existed.

The above findings of the OFT and the banks' previous T&Cs can't possibly mix.
It is inconceivable that dealing with instances of unauthorised overdraft would cost the banks over 30% of their total income.
Recently, Judge smith found that these charges, under old (Pre september 2007) T&Cs were not capable of being penalties, which is the argument many claimants used when the whole reclaiming movement started.
However, whether or not they can be called penalties, should not really be the issue, its just a name in my opinion. Claimants quite understandably still believe that what was in the T&Cs was not the truth.

With this in mind, I went looking for other legislation & found clauses in the trades descriptions act 1968
I refer to sections 13 & 14 in particular which state:

Quote:

13. False representations as to supply of goods or services.
If any person, in the course of any trade or business, gives, by whatever means, any false indication, direct or indirect, that any goods or services supplied by him are of a kind supplied to any person he shall, subject to the provisions of this Act, be guilty of an offence.
14. False or misleading statements as to services etc.
— (1) It shall be an offence for any person in the course of any trade or business— (a)
to make a statement which he knows to be false; or

(b)
recklessly to make a statement which is false;


as to any of the following matters, that is to say,—
(i) the provision in the course of any trade or business of any services, accommodation or facilities;
(ii) the nature of any services, accommodation or facilities provided in the course of any trade or business;
(iii) the time at which, manner in which or persons by whom any services, accommodation or facilities are so provided;
(iv) the examination, approval or evaluation by any person of any services, accommodation or facilities so provided; or
(v) the location or amenities of any accommodation so provided.
(2) For the purposes of this section— (a)
anything (whether or not a statement as to any of the matters specified in the preceding subsection) likely to be taken for such a statement as to any of those matters as would be false shall be deemed to be a false statement as to that matter; and

(b)
a statement made regardless of whether it is true or false shall be deemed to be made recklessly, whether or not the person making it had reasons for believing that it might be false.


(3) In relation to any services consisting of or including the application of any treatment or process or the carrying out of any repair, the matters specified in subsection (1) of this section shall be taken to include the effect of the treatment, process or repair.
(4) In this section “false” means false to a material degree and “services” does not include anything done under a contract of service.

Given that the current account as a whole is a service, I believe that if it were proven that the banks' charges unreasonably exceeded their costs (and the PCA report should emphatically back this up), then S.14 of this statute has been contravened and an offence has been comitted. This should not only give claimant's the argument they need to confidently persue their claim, but it may possibly also carry a penalty for the offenders..

[Smasher]

I am going to get to work this week developing the step by step for bank charge claims. Credit card claims methods need not change, but I have dreamed up a new strategy for bank charge claims which could provide a much stronger case for you when you get to the court stage.
A new POC & court bundle will also need to be developed. Here is a brief outline of what I propose which will include one extra letter so it will add another 14 days to the process, but as all cases are on hold until god knows when anyhow, it shouldn't make any difference.

Part 1 - Approaching the bank over issues with post Sept 2007 T&Cs.
a) Write a letter or an application asking for an overdraft, or an extended overdraft of the amount at which your account was overdrawn the most. Ask on what basis it will be granted or refused.
b) Ask on what basis "unarranged/informal" overdraft is granted or refused and how the maximum limit for unarranged/informal overdraft is decided.
c) Ask for payments to be always refused if there are insufficient funds.
d) Ask for the so called "Service" of considering & refusing a transaction to be removed from your account.

Part 2 - The preliminary approach for repayment.
There will be 2 types of letter template for these. One for accounts which have charges levied under the current T&Cs (or a combination of pre & post Sept 2007) and another for accounts which have charges which were all levied under old pre Sept 2007 T&Cs (the ones which present charges as admin charges to cover costs).
Now, as the high court has ruled that charges are subject to the test of fairness you will have very strong arguments that all charges are unfair if the bank has refused your requests as above, which is very likely. I know this has happened in one case already. Apart from reasons already known as per most of the usual letter templates available on various sites you can now add the following arguments:
a) The amount that you had become overdrawn is only allowed on an unarranged basis. You have applied to have the arranged overdraft extended and been refused.
b) The service for considering & declining transactions is enforced upon your account. It wasn't in effect at the time of opening the account (if you opened your account before Sept 2007) and you have written & asked for its removal which has been refused.
c) You have asked for payments to be refused where there are insufficient funds, but this has been refused. Again forcing you to pay for a service that you have made clear, in writing, that you do not want. In all other industries, a service is something that a customer can decide to use or not. In no other industry is it acceptable for a company to introduce a new service and force their customers to use and pay for it.

Part 3 - The LBA Basically just a repitition of part 2, but with the final warning before court action and some further argument depending on what response you get from the bank. Then it will be on to your POC. This will now need to incorporate the arguments over fairness as outlined above. I will be making a start on some template letters this week & next. I will post my first 2 drafts within the next few days. As will be the nature of this site, it is open to contribution & variation by anyone who wishes to take part.

[Smasher]

Ok, here's a draft of the first letter. This could actually oblige you to follow the bank's 8 week complaints proceedure, but again with all cases on hold until 32nd Octember MCMLXXXVVIIIXXLLMMXXVVIIIV or thereabouts, it shouldn't make any difference.

-------------------------------------------------------------------------

Dear Sir/Madam

I am writing to ask for some assistance & clarification in light of the huge amount of charges which you are levying from my account which are causing me increasing financial difficulty.

My request
1) At its peak, my account was overdrawn by £XX.XX. I would like to apply for an arranged overdraft facility equal to this amount. I would like to apply in writing so please send me an application form or an address where I could make a written application. Please could you also explain the basis upon which this application would be accepted or refused
2) I would like to ask, that in future, when a transaction is requested where there is insufficient funds or insufficient overdraft available, are declined rather than creating an unarranged overdraft.
3) I note that some of the charges are for the service of considering and declining transactions where there were insufficient funds or insufficient overdraft available. This service introduced in 2007 and applied to my account. I request that this service be removed from my account immediately as it was not part ofd the agreement when I opened the account. I did not ask for it and I do not want it.
4) Where charges were to cover administration & management costs, I would like an explanation as to what exactly those costs are and how you arrive at the sums charged. I am particularly confused as to how the cause, effect & action of a default charge is exactly the same as the cause action & effect of an unarranged overdraft service and the sums charges are exactly the same. What exactly is the difference apart from the wording of the terms & conditions?
I look forward to your swift response

Yours sincerely

[refie999]

I like it, right to the nitty gritty, lets see them answer that eh?

[Smasher]

Hmm, maybe just the misrepresentation act itself would do a better job. For claims with historic T&Cs, maybe this could be the only argument you'll need.
The Misrepresentation Act 1967

Anyone got any thoughts on this?

[Smasher]

Ah yes, one other point.

If it were to become acceptable for a company to introduce a new service after an account has been opened and make it a part of the core terms, then how long before utilities companies start adding services of 'extra usage', or providing gas/electricity/phone on credit?

Imagine for example: an old man who might be late paying his gas bill, therefore enjoying the new 'service' of an 'unarranged gas overdraft' at £30 a time. You can see from just that one example that a precident for allowing companies to write new services into their core terms without negotiation whenever they fancy it has potential for all manor or economic chaos!

[refie999]

That is so true Smasher, I feel it is more important than ever to fight these charges. I can see all and sundry jumping on the bandwagon and charging for anything they feel like