Legal Eagles? Nationwide admits charges for breaching contract

crazyworld_2

Hi all, i've just posted this over at the CAG forum. Can any legal eagles here take a quick look over the following as I think this may be an important find:

Following this thread, yesterday I decided to do some digging around for any old terms and conditions I could find in the back of cupboards or in any boxes, I came across 3 old leaflets detailing changes to terms and conditions.

Perhaps someone with a legal mind could reply as to whether this is a significant find, in the Nationwide's "Important Information Changes to your FlexAccount" leaflet (the back of the leaflet gives the reference number P7850 dated March 2004) under the heading "Changes to your FlexAccount" is the following:

"From 1st June 2004, we are increasing the fees for using FlexAccount outside its terms and conditions"

I thought this was quite an important sentence, as up until now I hadn't come across anything officially from Nationwide itself stating in simple words that their charges are a result of breaching the contract, and therefore penalty charges. (And specifically support our argument)

Additionally, the same leaflet then goes on to say "However, to ensure that we are able to continue to offer an excellent range of benefits and competitive interest rates, we must from time to time review the fees that apply to our accounts"

An admission that Nationwide are profiteering from the penalty charges arising from breach of contract to supply benefits to other users in black and white?

Could someone with a legal mind now clarify what i'm now thinking, that Nationwide have stated in no uncertain terms that these charges are indeed penalty charges, and are profiteering from them, which they seem to have been denying up until now in their defence. And surely, with this information, a judge could not do anything else but strike out any defence using the "these are service charges" argument?

That leaflet is numbered P7850, and once again, dated March 2004.

zootscoot

Excellent any chance you could scan it and send it to evidence@consumeractiongroup.co.uk?

Mark the e-mail FAO Zoot.

Thanks in advance

crazyworld_2

Hi Zoot, scans sent off to you, I hope you get them alright

crazyworld_2

Hi again, i've just finished drafting a particulars of claim, I wanted to get the issue discussed in this thread into the Particulars of Claim so that Nationwide could not in any way file any defence stating that these are not penalty charges for breaching their contract, and hopefully showing that I know what i'm talking about straight from the off, any thoughts on the following? Is this wording ok?

PARTICULARS OF CLAIM


1. The Claimant has an account ("the Account") with the Defendant which was opened on or around ***********

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. The Claimant understands that the Defendant contends that the charges were debited in accordance with the terms of the contract between itself and the Claimant.

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

4. The Claimant contends that:

a) The charges debited to the Account are punitive in nature; are not a genuine pre-estimate of cost incurred by the Defendant; exceed any alleged actual loss to the Defendant in respect of any breaches of contract on the part of the Claimant; and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

i) The Defendant has acknowledged on at least one occasion that the charges debited from the claimant's account are in fact penalty charges arising from a breach of contract, in its leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) which states "From 1st June 2004, we are increasing the fees for using FlexAccount outside its terms and conditions".

ii) The Defendant has admitted on at least two occasions that their penalty charges exceed any actual loss arising from the claimant's breach of contract. In it's leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) the Defendant states "We aim to keep our charges as low as possible to maximise the value we provide our members. However, to ensure we are able to continue to offer an excellent range of benefits and competitive interest rates, we must from time to time review the fees that apply to our accounts".

The second such acknowledgement that the Defendant's penalty charges are not indended to represent or related to any actual loss can be found in a BBC online article, titled "Ending free bank accounts 'fair' ", dated Monday, 19 February 2007 in which Mr Graham Beale, the defendant's Chief Executive states, in relation to penalty charges that "In a way, I do believe fee-based banking is a fairer proposition," and "It's not free to run an ATM or a branch, so what it means is that when you apply charges to delinquent accounts they bear the large proportion of that cost."

iii) Copies of the above references are attached to these particulars of claim

b) The contractual provision that permits the Defendant to levy such charges is unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations (1999) and the common law.


5. Accordingly the Claimant claims:

..............

zootscoot

Hi Zoot, scans sent off to you, I hope you get them alright

Yes thank you very much.

i) The Defendant has acknowledged on at least one occasion that the charges debited from the claimant's account are in fact penalty charges arising from a breach of contract, in its leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) which states "From 1st June 2004, we are increasing the fees for using FlexAccount outside its terms and conditions".

ii) The Defendant has admitted on at least two occasions that their penalty charges exceed any actual loss arising from the claimant's breach of contract. In it's leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) the Defendant states "We aim to keep our charges as low as possible to maximise the value we provide our members. However, to ensure we are able to continue to offer an excellent range of benefits and competitive interest rates, we must from time to time review the fees that apply to our accounts".

The second such acknowledgement that the Defendant's penalty charges are not indended to represent or related to any actual loss can be found in a BBC online article, titled "Ending free bank accounts 'fair' ", dated Monday, 19 February 2007 in which Mr Graham Beale, the defendant's Chief Executive states, in relation to penalty charges that "In a way, I do believe fee-based banking is a fairer proposition," and "It's not free to run an ATM or a branch, so what it means is that when you apply charges to delinquent accounts they bear the large proportion of that cost."

iii) Copies of the above references are attached to these particulars of claim

These are issues of evidence which should be included in your witness statement and bundle rather than your particulars of claim.

What you do need to include is the contractual terms which you are relying to demonstrate that you have breached your contract.

crazyworld_2

Thanks for the reply Zoot, so in this case, I could just attach a copy of this leaflet, with the words ""for using FlexAccount outside its terms and conditions" highlighted to the particulars of claim?

Tozer

crazyworld wrote: »

Thanks for the reply Zoot, so in this case, I could just attach a copy of this leaflet, with the words ""for using FlexAccount outside its terms and conditions" highlighted to the particulars of claim?

No need. It is evidential. Not the basis of the claim.

natweststaffmember

crazyworld wrote: »

Hi again, i've just finished drafting a particulars of claim, I wanted to get the issue discussed in this thread into the Particulars of Claim so that Nationwide could not in any way file any defence stating that these are not penalty charges for breaching their contract, and hopefully showing that I know what i'm talking about straight from the off, any thoughts on the following? Is this wording ok?

PARTICULARS OF CLAIM


1. The Claimant has an account ("the Account") with the Defendant which was opened on or around ***********

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. The Claimant understands that the Defendant contends that the charges were debited in accordance with the terms of the contract between itself and the Claimant.

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

4. The Claimant contends that:

a) The charges debited to the Account are punitive in nature; are not a genuine pre-estimate of cost incurred by the Defendant; exceed any alleged actual loss to the Defendant in respect of any breaches of contract on the part of the Claimant; and are not intended to represent or related to any alleged actual loss, but instead unduly enrich the Defendant which exercises the contractual term in respect of such charges with a view to profit.

i) The Defendant has acknowledged on at least one occasion that the charges debited from the claimant's account are in fact penalty charges arising from a breach of contract, in its leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) which states "From 1st June 2004, we are increasing the fees for using FlexAccount outside its terms and conditions".

ii) The Defendant has admitted on at least two occasions that their penalty charges exceed any actual loss arising from the claimant's breach of contract. In it's leaflet, titled "Important information Changes to your FlexAccount" (ref. P7850, dated March 2004) the Defendant states "We aim to keep our charges as low as possible to maximise the value we provide our members. However, to ensure we are able to continue to offer an excellent range of benefits and competitive interest rates, we must from time to time review the fees that apply to our accounts".

The second such acknowledgement that the Defendant's penalty charges are not indended to represent or related to any actual loss can be found in a BBC online article, titled "Ending free bank accounts 'fair' ", dated Monday, 19 February 2007 in which Mr Graham Beale, the defendant's Chief Executive states, in relation to penalty charges that "In a way, I do believe fee-based banking is a fairer proposition," and "It's not free to run an ATM or a branch, so what it means is that when you apply charges to delinquent accounts they bear the large proportion of that cost."

iii) Copies of the above references are attached to these particulars of claim

b) The contractual provision that permits the Defendant to levy such charges is unenforceable by virtue of the Unfair Terms in Consumer Contracts Regulations (1999) and the common law.


5. Accordingly the Claimant claims:

..............

Have you followed the OFT test case cos you are basing your claim on Bank charges being penal when the ruling has already stated with regards to Nationwide that they are not. That is a very poorly written POC, imho. Thankfully the courts will stay all claims so you are lucky.