Bank Charges - illegal?

dchurch24

The Pre-Estimate bit is as such:

In law, a breach of contract cannot be punished. If the other party has incurred costs because of a breach of contract, they can of course recover these costs.

In the case of a bank account where a breach of contract could occur many times, a pre-estimate of the cost of a breach of contract can be written into the contract (or T&C) as to apply to the court for recovery of these costs each time a breach occured would be very costly and time consuming.

The problem is that the banks pre-estimate is nothing of the sort - it is a profit making vehicle and as such not legally enforcable.

If you really don't want to start court proceedings against them (and I suggest that you really consider it), then I would overdraw by the amount that the charges came to, and tell them that to recover those charges they will have to take YOU to court to enforce them. I don't believe they will, even though apparently they believe that they are legally enforcable. I think they would most likely (if they have any sense) write it off as a 'goodwill' gesture.

westernpromise

dchurch24 wrote:

If you really don't want to start court proceedings against them (and I suggest that you really consider it), then I would overdraw by the amount that the charges came to, and tell them that to recover those charges they will have to take YOU to court to enforce them. I don't believe they will, even though apparently they believe that they are legally enforcable. I think they would most likely (if they have any sense) write it off as a 'goodwill' gesture.

I doubt it. They will report it to the credit reference agencies as a default, with negative implications for her credit score for years to come.

dchurch24

the manner in which this matter is resolved should set a precedent which can be invoked in the event of further such charges in the future.

A legal precedent can't be set in the county courts.

I doubt it. They will report it to the credit reference agencies as a default, with negative implications for her credit score for years to come.

It wouldn't be a default - it will just show that the account is overdrawn, which of course will dissapear when they wipe it out.

May

Thanks for all the advice. I shall definitely write a letter back to the bank. I might charge them £25 for my letter as a pre-estimate charge!

westernpromise

dchurch24 wrote:

A legal precedent can't be set in the county courts.

May has to rationalise why she's not going the Ombudsman route. The real reason for the court route is that it is going to annoy the bank more and force it to work to the court's timetable rather than allowing them to procrastinate for months until she gets bored and goes away. Since it is never helpful to one's case to appear to have obstructed or refused reasonable attempts at settlement short of going to court, she needs a plausible reason for not going to the Ombudsman.

It wouldn't be a default - it will just show that the account is overdrawn, which of course will dissapear when they wipe it out.

You hope. Defaulting on debt does not clear your credit history, otherwise everyone would do it. They may pass it to a debt collector for 25p in the pound and then May is in court just the same.

I once paid Diners Club 42 quid, which they lost. They insisted I still owed them, but gave up chasing. I soon found it impossible to obtain credit cards and bank products. When I checked my credit history, I found out why: I had a 9 on there from Diners Club for the 43 quid I had paid which they had lost, written off, and marked as an unrecoverable default.

Why faff about? They owe her and she should not have to resort to wheezes to get her money back. They have no case and they know it.

dchurch24

Trust me, the Ombudsman will not interfere with this. They have replied in the required timescale and the charges are in the t&c's - the Ombudsman will not be drawn on the legalities of punitive charges.

>> Why faff about?

May had stated that she really didn't want to take them to court - I was just offering a different solution with the same end.

Incidently, I overdrew by the amount that Abbey owed me. I didn't pay into that account ever again.
Abbey knew I had them over a barrel and paid up. Part of my settlement conditions that I gave to their solicitor was that they repair my credit history. They replied, stating that it hadn't been affected.
I checked my credit report and all it showed was that my account had been overdrawn. No default.

If the debt was passed to a debt collecter and eventually court (which I seriously doubt), she could prove that the charges were directly responsible for her overdraft and therefore not legally enforcable. Saving her the bother of having to fill the forms out to start legal proceedings against them.

Although, I still believe that the best option is to take them to court. No amount of letters to them is going to change their mind until they get one from the court.

dchurch24

You hope. Defaulting on debt does not clear your credit history, otherwise everyone would do it.

Sorry, what I meant was, that the bank will refund her money in this instance as a "gesture of goodwill" and then the overdraft entry in her credit file will no longer be there, not that if she didn't pay it, it would just go away eventually.

Sorry if I didn't make myself clear.

syfodyas

Well I wrote a stern letter to Natwest, saying that they were exploiting my period of financial difficulty with their charges, I only hinted at legal action but stated that their charges were punitive. They wrote me a letter back refunding me fully and waivering all end of month charges for Nov and Dec due to the "problems experienced"

It CAN be done!!

Bossyboots

syfodyas wrote:

Well I wrote a stern letter to Natwest, saying that they were exploiting my period of financial difficulty with their charges, I only hinted at legal action but stated that their charges were punitive. They wrote me a letter back refunding me fully and waivering all end of month charges for Nov and Dec due to the "problems experienced"

It CAN be done!!

I wish I had added something like that to my friend's letter. Might try it if they don't play ball first time around. She has £50 to last her until the 3rd January.

westernpromise

syfodyas wrote:

Well I wrote a stern letter to Natwest, saying that they were exploiting my period of financial difficulty with their charges, I only hinted at legal action but stated that their charges were punitive. They wrote me a letter back refunding me fully and waivering all end of month charges for Nov and Dec due to the "problems experienced"

It CAN be done!!

Well done. Good result!