muggins73 v shabbynat

[muggins73]

After alot of deliberation and after the relisation that Abbey have taken a total of £758.11 in penalty charges and interest, I am contemplating on whether or not to embark on yet another journey against another bank.

In light of the OFT test case I am opting to head down the benefit route. With our financial situation in turmoil, yet again, I figured that nothing ventured is nothing gained. It's got to the point that we either pay bills and dont eat or buy food and forget the bills. Sad isnt it

I have formally written to Abbey on two seperate occasions quoting both the Tax Credits Act and the Social Security Administration Act in light of the fact that the income into both our joint and sole accounts comes from benefits.

I have advised them that I believe there has been a breach of contract and that I felt their organisation has failed to handle our affairs with reasonable care and skill. I go onto state that this failure on their part has caused me and my family a great deal of hardship, with no means to pay the rent due, and little or no money to pay for housekeeping and utility bills.

I asked for a little compassion and requested that the benefit amounts debited in order to pay for their default charges be refunded by return.

In light of this complaint and given our dire financial situtaion, our joint current account is now a cardcash account!!!! Although, I have received a refund in part of some of the charges levied on this account since my complaint, I have yet to receive the full amount.

Abbey sent their standard response, stating the usual...'although we believe the charges are fair, clear and lawful.......until the determination of thelegal issues in the proceedigns with the OFT, we have asked the FSA to suspend the normal timetable for dealing with bank charges complaints...'

Am I able to go straight ahead and commence court proceedings or do I respond with a LBA?

[Amy]

Re: muggins73 v shabbynat

They have clearly stated to you that they don't feel compelled to deal with you as per their usual complaints procedure, so I would go straight ahead and file a claim.

[muggins73]

Re: muggins73 v shabbynat

That was my initial thought to go straight for the jugular, however, would good ole DJ deem that as being fair and reasonable?

[Amethyst]

Re: muggins73 v shabbynat

21 days is specified in preaction protocols so A 7 day LBA is quite sufficient if you are intending to go down the court route.

With reference to your other claim this one has a greater chance of getting through the hardship issues....there is the option of going through the FOS and pleading your case through them rather than the courts.

If you go the court route I think we should amend the POC to account for these issues - SSA & TC acts - just as you have on your letters. So the hardship issue is there from the beginning.

I'll ask Kafka to have a look as he's been looking in to the FOS side of things....

hmmmm thinking lol.

[muggins73]

Re: muggins73 v shabbynat

LBA it is then. I'll adapt the normal template to suit my cause. I'll post it on here prior to posting, so you can have a little look see.

I have a POC already to go, which accounts for the above mentioned issues, see what you make of it.

IN THE XXXXX COUNTY COURT

BETWEEN

XXXX, CLAIMANT

AND

ABBEY NATIONAL DEFENDANT

PARTICULARS OF CLAIM

1. The Claimant has an Account Number xxxxxxx, Bank Sort Code xxxxxx ("the Account") with the Defendant which was opened in xxxxx.

2. During the period in which the Account has been operating the Defendant has automatically debited numerous charges to the Account in respect of referred Direct Debits and the Claimant exceeding his overdraft limit (“the Charges”). 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 (“the Agreement”).

3. A list of the charges (“the Schedule”) applied is attached to these Particulars of Claim.

4. The Claimant’s entire income is derived from Incapacity Benefit and Child Benefit paid by the Department of Work and Pensions, and Child Tax Credit paid by HM Revenue and Customs, all paid directly into the Account. This money does not belong to the Claimant but is public money to meet the basic needs of the Claimant and the Claimant’s family.

5. The Claimant contends that the clauses in the Agreement that the Defendant uses to justify the Charges constitute an assignment of money by the Defendant and to the Defendant contrary to

a) s187 Social Security Administration Act 1992 regarding Incapacity Benefit and Child Benefit, and

b) s45 of the Tax Credits Act 2002 regarding Child Tax Credit,

and are void. The Charges are therefore illegal.

6. The defendant has, in addition, levied interest on these charges which is also detailed in the Schedule.


7. Accordingly the Claimant claims:

a) the return of £xxxx (xxx Pounds Sterling) taken by the defendant in charges detailed in the Schedule and interest applied on the charges of £xxx (xxx Pounds Sterling and xx pence);

b) court costs;

c) interest under section 69 County Courts Act 1984 at a daily rate of 0.022% (8% per year) up to the date of judgement or earlier payment.

8. The Claimant also respectfully asks the court to make an order requiring the Defendant to cease taking public money paid in benefits to the Claimant from the Claimant’s account.

I believe that the contents of these particulars of claim are true

This is obvioulsy going down the ourt route, however, if you or kafka feel that it would be quicker to proceed down the alternative route then pls say.

[Amethyst]

Re: muggins73 v shabbynat

Okay looks good....I do think you need to go with the argument these charges ARE penalties too, and disproportionate as service fees. Without the charges being penaltys then the SSA and TC acts dont work. so I think you need the inalienability arguments alongside the standard penalty charges arguments UTCCR etc. too.

[muggins73]

Re: muggins73 v shabbynat

Ok, ta.
Will adjust and post for feedback, once I've pieced together the LBA and got that out the way.

[muggins73]

Re: muggins73 v shabbynat

Whilst I'm on the subject of the LBA, is there an LBA template which includes the benefit argument?

[muggins73]

Re: muggins73 v shabbynat

Well having searched around, I've pieced togethe this LBA in relation to my benefit argument.

Any comments and/or suggestions would be greatly appreciated.

(address)

Mr Richard Harris
Head of Complaints
Abbey
PO Box 5129
Milton Keynes
MK9 2YN

XX September 2007


RE: LETTER BEFORE COURT ACTION

Dear Mr Harris,

Account Number: xxxxx
Your ref(s): xxxx

I am somewhat disappointed that you have failed to respond positively to my previous complaints dated 15th and 26th July 2007.

Further to recent publicity, and the Office of Fair Tradings’ report dated 5th April 2006, I am aware that the penalty charges you have been applying to my account over the past year are unlawful. These charges have been levied on my account following breaches of contract by myself, returned direct debits for example. If you contest these are penalty charges, please supply me with a copy of the terms and conditions from the time my account was opened. As disproportionate penalty charges, I also request that you provide me with a full breakdown of the costs you have incurred as a result of my breaches, in order to show the level of charge reflects your actual losses.

I calculate that you have taken £745.00 from my account between 16/01/2007 and 08/08/2007. I enclose a schedule of the charges which I am claiming.

I require repayment in full of this money. If you do not comply fully within 7 days then I shall begin a claim against you for the full amount plus interest plus a claim under s.7 and 13 of the Data Protection Act 1998 plus my costs and without further notice.


In considering this letter before action, you are reminded of the Press Release issued by the FSA on 27th July, which states:

"Consumers who are in very difficult financial circumstances - 'hardship cases'
Banks and building societies will have to conduct a filtering process to ensure that cases of genuine hardship are still dealt with during the waiver period. Cases of hardship would still be entitled to be referred to, and dealt with by, the FOS."

I believe that my personal circumstances fall within this category because our entire income is derived from Incapacity Benefit, Housing Benefit and Child Benefit paid by the Department of Work and Pensions, and Child Tax Credit paid by HM Revenue and Customs, all paid directly into the Account. This money does not belong to myself but is public money to meet the basic needs of myself and that of my family.

As highlighted in my letter dated 15th July 2007, if the income in an account comes from benefits, they are contrary to the legislation relating to benefits. If the income comes from Tax Credits, they are contrary to section 45 of the Tax Credits Act 2006. If the income is from Incapacity benefit, job seekers allowance, etc, they are contrary to section 187 of the Social Security Administration Act 1996. The workings of these two acts come under the Treasury and the Department of Work and Pensions, respectively and are once again quoted below for your immediate attention.

Tax Credits Act 2006
45 - Inalienability

(1) Every assignment of or charge on a tax credit, and every agreement to assign or charge a tax credit, is void; and, on the bankruptcy of a person entitled to a tax credit, the entitlement to the tax credit does not pass to any trustee or other person acting on behalf of his creditors.
(2) In the application of subsection (1) to Scotland-
(a) the reference to assignment is to assignation ("assign" being construed accordingly), and
(b) the reference to the bankruptcy of a person is to the sequestration of his estate or the appointment on his estate of a judicial factor under section 41 of the Solicitors (Scotland) Act 1980 (c. 46).

Social Security Administration Act 1992
Miscellaneous
Certain benefit to be inalienable **

187- Subject to the provisions of this Act, every assignment of, or charge on-
(a)benefit as defined in section 122 of the Contributions and Benefits Act;
(b)any income-related benefit; or
(c)child benefit,
and every agreement to assign or charge such benefit shall be void; and, on the bankruptcy of the beneficiary, such benefit shall not pass to any trustee or other person acting on behalf of his creditors. The Charges are therefore illegal.

When you open an account with a bank or building society and use their services, you are entering into a contract. The law says that the bank or building society must carry out its business:-
• with reasonable care and skill.

If the service is unsatisfactory you may be entitled to compensation if the contract has been broken. I believe that there has been a breach of contract as I feel your organisation has failed to handle my affairs with reasonable care and skill. This failure on your behalf has caused me and my family a great deal of hardship.

Furthermore, I shall submit a Consumer Credit Act 1974 complaint to the OFT upon the basis that you have failed to comply with the OFT's direction of 5 April 2006 and are therefore not a 'fit and proper person' to hold a consumer credit licence under the 1974 Act. If you do not understand what this means then seek advice from your legal department.

Yours sincerely,

[Kafka]

Re: muggins73 v shabbynat

This is obvioulsy going down the court route, however, if you or kafka feel that it would be quicker to proceed down the alternative route then pls say.
[/FONT]

This is shaping up nicely.

I have been wondering for some time how we can pre-empt stays by getting something built into the POC.

In this case 2 things stand out to me. Firstly, benefits have been taken and this elevates the gravity of the situation. Secondly, this point has been explained to the bank who have ignored it. This is important because the FSA has specifically stated that a condition of the waiver is that banks continue to filter out and deal with hardship cases. This is one of the clearest cases I've seen where a bank is blatantly refusing to do this.

My feeling is that we need a form of words in the POC to pull this together. Does such a thing exist yet, or do you want me to write a draft?

I'd like some opinions on this please

An alternative might be to take this straight to the FOS as a breach of the waiver conditions. They have said that they won't process any complaints about charges during the test case, so I don't know if they will try to put the complaint on hold. Even if they did it would make a super press release!

[muggins73]

Re: muggins73 v shabbynat

My feeling is that we need a form of words in the POC to pull this together. Does such a thing exist yet, or do you want me to write a draft?

Yes pleeeeaaaaase!!!!!

An alternative might be to take this straight to the FOS as a breach of the waiver conditions. They have said that they won't process any complaints about charges during the test case, so I don't know if they will try to put the complaint on hold. Even if they did it would make a super press release!

If I did decide to take it via the FOS and they put it on hold, would this then prevent me from commencing court proceedings?

By shaping up nicely, are you referring to my LBA or the claim in general:o

[muggins73]

Re: muggins73 v shabbynat

As per advice, additions to the POC taken from the templates section are made in red, and are ready for approval.


IN THE XXXXX COUNTY COURT

BETWEEN

XXXX, CLAIMANT

AND

ABBEY NATIONAL plc DEFENDANT

PARTICULARS OF CLAIM

1. The Claimant has an Account Number xxxxxxx, Bank Sort Code xxxxxx ("the Account") with the Defendant which was opened in xxxxxxxx.

2. During the period in which the Account has been operating the Defendant has automatically debited numerous charges to the Account in respect of referred Direct Debits and the Claimant exceeding his overdraft limit (“the Charges”). 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 (“the Agreement”).

3. A list of the charges (“the Schedule”) applied is attached to these Particulars of Claim.

4. The Claimant’s entire income is derived from Incapacity Benefit, Housing Benefit and Child Benefit paid by the Department of Work and Pensions, and Child Tax Credit paid by HM Revenue and Customs, all paid directly into the Account. This money does not belong to the Claimant but is public money to meet the basic needs of the Claimant and the Claimant’s family.

5. The Claimant contends that the clauses in the Agreement that the Defendant uses to justify the Charges constitute an assignment of money by the Defendant and to the Defendant contrary to

a) s187 Social Security Administration Act 1992 regarding Income Support and Child Benefit, and

b) s45 of the Tax Credits Act 2002 regarding Child Tax Credit,

and are void. The Charges are therefore illegal.

6. The defendant has, in addition, levied interest on these charges which is also detailed in the Schedule.


7. It’s the claimant’s contention that the defendants charges are a disproportionate penalty , do not reflect a true representation of actual loss and therefore are unenforceable in common law and statute.

8. The claimant quotes the following Common law Principles (Penalty charges are irrecoverable at common law).
The precedents for this were:a) Dunlop Pneumatic v New Garage [1915] AC 79. Lord Dunedin set out some tests that are considered even in modern cases when the court is asked to rule on penalty charges. They are; 1) If it is "extravagant and unconscionable" i.e. that the cost incurred by the business because of the breach is lower than what the consumer is being expected to pay because of the breach. 2) It is also a penalty where the consumer is to pay a larger sum due to failure to pay a smaller sum. It was held that a contractual party can only recover damages for an actual loss or liquidated losses. b) Murray v. Leisure play [2005] EWCA Civ 963 “English contract law recognises that, if the parties agree that a party in breach of contract shall pay an unjustifiable amount in the event of a breach of contract, their agreement is to that extent unenforceable” c) CMC Group Plc And Others V Zhang [2006] EWCA Civ 408. “'Whether a provision is to be treated as a penalty as a matter of construction to be resolved by asking whether at the time that the contract was entered into the predominant contractual function of the provision was to deter a party from breaking the contract or to compensate the innocent party for breach. That the contractual function is deterrent rather than compensatory can be deduced by comparing the amount that would be payable on breach with the loss that might be sustained if breach occurred.”

9. Furthermore , or in the alternative , penalty charges are also contrary to: The Unfair Terms in Consumer Contracts Regulation 1999 No 2083 SCHEDULE 2 Indicative and Non-Exhaustive List of terms which may be regarded as unfair (e) Requiring any consumer who fails to fulfill his obligation to pay a dis-proportionately high sum in compensation .Further , or in the alternative , if the defendant states that there was no breach of contract and that the charges are for a service, then it is the Claimants belief that the defendants have attempted to restructure accounts in order to present events of default spuriously as additional services. However The Unfair Terms in Consumer Contracts Regulations 1999, are concerned with the intention and effects of terms, not just their mechanism. For example, a charge for 'agreeing to' or 'allowing' a customer to exceed his credit limit is no different from a charge for the customer's 'default' in exceeding his credit limit.

10. Accordingly the Claimant claims:

a) the return of £xxxx (xxx Pounds Sterling) taken by the defendant in charges detailed in the Schedule and interest applied on the charges of £xxx (xxx Pounds Sterling and xx pence);

b) court costs;

c) interest under section 69 County Courts Act 1984 at a daily rate of 0.022% (8% per year) up to the date of judgement or earlier payment.

11. The Claimant also respectfully asks the court to make an order requiring the Defendant to cease taking public money paid in benefits to the Claimant from the Claimant’s account.

I believe that the contents of these particulars of claim are true


(signed)
(dated)

[Glenn UK]

Re: muggins73 v shabbynat

On a personal note, if you argue for UTCCR regs then its clear this is an issue that the OFT are investigating.

I am not certain that it is critical to the POC, although I used it in mine historically I am not certain that I would bother now.

Look at it this way if the charges are a true reflection of their costs then they wont be unfair will they?

If you contract with the bank predates their recent change of T&C to suggest that the charges are for a service then there is no doubt they should be considered in this light, IE are they penalties or not?

This is because when the charges were levied under the old T&C it specifically said the charges were to cover their admin costs upon your breach of contract i believe.

Where this is all going is that if you don't mention it then that's another reason why the court shouldn't apply a stay, the claim has nothing to do with the UTCCR.

Just a thought, a long one i know.

HTH

Glenn

[Glenn UK]

Re: muggins73 v shabbynat

Oh as another thought why not put in the compound interest based on Sempra Vs inland Revenue 2007?

Basically if you add into the POC that you paid the charges under a mistake and that you believe that Abbey have concealed the unlawfulness of those charges then this opens up the claim to compound interest i believe.

Incidentally if there are any charges older than six years these are opened up too. In both my claims against abbey they haven't challenged the older than six years issues based on my use of these phrases invoking Sec 32.1.b. and c of the limitations act.

Glenn

[Amethyst]

Re: muggins73 v shabbynat

I would agree with the point about para 9 and the UTCCR - if you dont argue it they can't stay your claim (well they can try) as your claim has nothing to do with the test case.

I'm not convinced on the compound interest issue but am willing to be persuaded. I do think it is something you should only claim if you are 100% up on what you are doing and the issues you need to argue. There is a link to the Sempra case in the library.