Left with overdraft after submitting claim

barto_2

I appologise if this has been covered previously.

I am in the process of claiming my charges from Lloyds TSB. SInce submitting the claim they withdrew my agreed overdraft facility. I have since moved to a new bank. Lloyds TSB are now demanding repayment of the overdraft. As my bank charges owed are greater than the overdarft I have told them that I will repay the overdraft when they repay the charges. They say this isn't possible. My view is that I would not have the overdraft if it wasn't for the charges and I believe they owe me money so therefore the amount owing to them is under dispute. The fact they have chosen to not look into these cases until after the test case, I believe is their decision. The amount owed and to whom can surely only be ascertained after the case and until then they should wait for their money just as they expect me to. Has anyone had any experinece of this or no what the ruling is on this?

Thanks!

Tozer

Overdrafts are repayable upon demand I'm afraid. Until the case is resolved, you do not have a legal basis for refusing this. I would suggest, if possible, repaying the o/d and submitting a claim for the charges (which will include interest) afterwards. Otherwise you risk more charges which could seriously hurt if the case is lost together with adverse credit rating.

Smasher

You could quite reasonably argue that no overdraft exists & was created purely by the bank by imposing penalty charges that you believe to be unlawful. I see no reason why a judge would not see it the same way. I know of a few people who are taking exactly the same route as this. Play them at their own game.

If, in the extremely unlikely event that the OFT lose the case, then it will no longer be safe to purchase goods & services in the UK full stop.

Tozer

So who are you going to argue this to? And when? Bottom line is if the overdraft is not repaid upon demand then the OP will be in breach of its agreement with the bank and will be deemed to have defaulted on a loan and adverse credit history WILL be recorded.

I think your last sentence is a touch melodramatic. I would also say that nothing in litigation is certain - there hasn't been an application for summary judgment and the hearing has lasted weeks! There are clearly a great deal of issues. I personally suspect that the banks will win the case - if necessary on appeal.

Smasher

What makes you suspect that banks will win the case?

The OP will first have to be found to actually owe money to the bank in order to be in breach of agreement or defaulted. I have helped people who have DCAs chasing them for an overdraft that is made up of penalty charges & not one of these DCAs has ever had the stupidity to pursue it any further than writing their threatening letters.. Wonder why??
If adverse data is recorded on his credit file, then he can, like I did, demand it be removed as part of his claim.

You seem to be scaremongering with rubbiish like that which clearly seems based on your opinions.

The last part of my post is most certainly not melodramatic, it is based on what is actually going on. If, in the unlikely event banks win, it will set a precedent that penalty charges are now perfectly ok as long as you dress them up as fees for a service. Further, it will also mean that can companies legaly force new services on their customers & charge what they like for them with no need to give the customer a choice as to whether or not they want them.
If the law & the regulators can be so easily flouted on this, then watch every other type of company look for ways to create more & more grey areas which allow them to rip people off..

Tozer

Oh give it a rest. It is my opinion. Not scaremongering. You keep on filling people with unbridled optimism. I am saying there are two sides to the case - hence LITIGATION - and there are by definition no certainties. You give your opinion that all corporations are evil, that the trial judge is bamboozled and that the lawyers are all corrupt and I give a counter-balance. Live with it.

Rubbish? It is my professional opinion (and that of many, many others that there is a good case on both sides) that there is a significant chance that the banks will win. Shout "I told you so" if the OFT win. Till then, give some credit to the fact that there are 2 sides.

Yes, we all know you have helped people. Actually, so have I - read my posts. So please, don't attack me personally for bringing some reality to this.

Your comments about what would happen if the banks win are wrong factually and legally.

You are incredibly melodramatic. Clearly, you feel strongly about this. For my part, I have never paid an unauthorised bank charge and, fortunately, never will. My interest is from the legal side and so am therefore not in the slightest bit biased. I think a little objectivity helps in these situations. Don't you?

Smasher

There are about half a billion reasons for optimism

Tozer wrote: »

Your comments about what would happen if the banks win are wrong factually and legally.

Tell me how..

Tozer

No you tell me how "companies legaly force new services on their customers & charge what they like for them with no need to give the customer a choice as to whether or not they want them"?

How the hell will that happen?

You are right - there are loads of reasons for optimism. But for crying out loud take the prudent approach - or at least do not tell people who may be on the verge that "everything will be ok" when it may well not be. Realism and caution is called for.

Frankly you are doing the opposite of "scaremongering". THERE ARE NO CERTAINTIES IN LITIGATION. As I have said, I think that the banks have put up an excellent case. The judge will now decide. Not you.

borgbaiter

hi

it irks me to agree with tozer. nothing is settled till the fat lady sings. i also agree with smasher that if the banks win the flood gates are truely opened. anyone who bills you will have late payement clauses for profit.

i would also add that adverse credit is at the whim of the banks so its easy for them to add it and not so easy to get it removed. if its at all possible id recomend avoidance rather that having to get it removed.

however this doesnt make any of it fair. the privalige enjoyed by banks has not been at all balanced by social responsibility


Borgbaiter

Smasher

Well, banks have all re-written their T&Cs saying that charges are fees for the services of providing formal & informal overdrafts. Before the test case was announced, they all said that the charges were to cover their costs. They claim in court that these services are part of their core terms.
How can a "service" that was only introduced a couple of months ago, be part of the core terms of an account that was opened years ago?
It is as obvious as a full moon on a clear night that these T&C re-writes are an attempt at circumnavigating the law. Or is it just mad coincidence that 7 of the 8 banks all rewrote their T&Cs in exactly the same way at exactly the same time??

These "services" have been forced on banks' customers. These customers have been given no opportunity to decide whether or not they want them and have been forced to pay for them. And before you say, well go somewhere else, there is no alternative. If you want to have a job, you must have a bank account.

Secondly, if I want to impose a contractual penalty on one of my customers, I could simply re-write my T&Cs to say I will provide the service of allowing them to pay late (or perhaps reword that to say "provide credit"), use more than agreed & charge what I like. I would have a high court ruing against the OFT no less, to say I am within my rights to do so..

Sure there are no certainties in litigation, but the odds currently stand at around 500,000-1 in favour of the claimant, possibly higher. You only need to look at all the hundreds of claim management companies springing up all over the place offering "no win no fee" reclaim your bank charges services (not that I would ever recommend using one) to see how good your chances are if you claim. These people are many things, but they ain't stupid. If the odds weren't so overwhelmingly stacked in favour of the claimant, these companies would not be sprouting in such a prolific fashion

borgbaiter

hi

if there fees for services they are subject to the supply of goods and services act and are therefore subject to being reasonable. this would also be subject to the OFT ruling on reasonable so whats the difference. maybe the players all change sides and we play this game in court again next year?


Borgbaiter