thincat v lloyds

[thincat]

Re: Lloyds response letter

Hi Amethyst,
Sorry for the delay in replying,I've been working on the other stuff I've got going with Lloyds. Basically the reply is along the lines of "We're sorry you've had to keep whingeing
we're dealing with your complaint". I'll give you the whole letter asap. One thing though,
I've just read the "Is this unfair" thread and the Natwest reply to Money Saving Expert's
letter(I assume it's them) and things are definitely going to get "interesting". I also
notice that Natwest(and I assume, the other banks) have taken FULL advantage of the
Supreme Court's ruling and seem to say "We can charge what we like because it's for
a service". It amounts to open season on the customer as far as I can see and the thin end of the wedge. Difficult.

Thincat.

[Amethyst]

Re: Lloyds response letter

the charges are not for a service they are 'part of the price for the package of services'

actually SCoJ Judgment (most bizarre paragraph)

74. In each instance the Judge identified aspects of the provisions for payment of the Relevant Charges that would be anomalous if they were intended to be paid in exchange for the service to which they related. I will take one of the charges made by Barclays to illustrate such anomalies. A ‘Paid Referral Fee’ is charged when the Bank honours a cheque, standing order or direct debit in circumstances where the account is overdrawn without prior arrangement. The fee is not charged per transaction but at £30 per day. But the fee is only charged on a maximum of three days per month. A customer would not conclude that the fee was charged in exchange for the transaction or transactions concluded on the days when the charges were made but that any other similar transactions in the course of the month were provided free.

actually might point that bit out to Darth on the other thread.

[thincat]

Re: Lloyds response letter

Hi Amethyst,
Thanks for that,however the more I think about it the more it seems as though the
Supreme Court judgement was rather flawed on the basis that there was no CLEAR guidance given to the banks to limit abuse of their position as providers of a package of services. This seems to my rather limited understanding of such matters to be ONE of
the central issues in this matter. The banks are there to provide a SERVICE no more no
less and NOT to abuse their position as SERVICE PROVIDERS which they have in
levying unfair and unregulated charges on the consumer(charges for withdrawing
money from a cashpoint for instance). Where does it end for god's sake? Charging
some for turning up to see a bank official??? Anyway,swiftly moving on here are the contents of the reply Lloyds Bank sent me in response to the letter I sent them(thanks to
you). Reply is as follows:-

"Dear xxxxx,

Thank you for contacting us recently. We're very sorry to hear you have some concerns.

Let me assure you that your complaint is getting the attention it deserves and one of my team members is looking into your concerns to understand what's happened. We will get
a response to you as soon as we can.

We want you to be happy(???) with every aspect of our service and that also means
dealing with your complaint promptly and fairly. So I've enclosed a "Voicing your concerns "
leaflet so you can get passed round our system from pillar to post if you feel like wasting
a few hours(I'm being VERY polite here)."

The rest of the rather short letter is basically about how sorry they are about me having to whinge in the first place and I can talk to someone about it if I like.........blah bore waffle!! So that's their letter. Sounds like a standard response letter to me as if they're
playing for time. What do you think?

VERY respectfully,

Thincat.

PS I don't how you manage all this!Thanks yet again for ALL your hard work.:fencing:

[Amethyst]

Re: Lloyds response letter

Yep stalling waffle.... shall I make you your own thread might be easier for you (and me lol).

[thincat]

Re: thincat v lloyds

Cool!

[thincat]

Re: thincat v lloyds

Hi Amethyst,
Got a letter from Lloyds this morning running to 3 pages!! This letter mentions Common Law and various other reasons why they're not going to refund the charges. I feel it would help if I scanned it and uploaded it to you so you can have a look at it(personal details removed of course). Is that ok? I'm going to sit down later and look at the letter in
depth so I can get an understanding of where they're coming from. Let me know.

Thanks,

Thincat:tea:

[Amethyst]

Re: thincat v lloyds



Like that ?

If not yes please to the scan

[thincat]

Re: thincat v lloyds

Hi Amethyst,
The letter I received is not the same as the one shown. There are similarities though(The Lord Justice Potter judgement for instance) also there are references to the
Supreme Court decision and the OFT decision(inevitably) which are being used to beat
people over the head. I've also realised the letter runs to 4 pages NOT 3 as I thought.
Mention is made of the issue of the Overdraft facility and the fairness of charges thereof.
I think I will upload it to you so you can peruse it at your leisure. The letter states that
I've got 6 months to go to the Financial Ombudsman Service if I'm not happy.
In the light of what I've said do you want me to upload the letter?

Thanks,

Thincat.

[Amethyst]

Re: thincat v lloyds

Aye that be good, may as well get the full set, plus it will give us a better idea what we're responding to. thanks thincat xx

[thincat]

Re: thincat v lloyds

Will do- Thank you.

Thincat.

[thincat]

Re: thincat v lloyds

Hi Amethyst,
Here is the Lloyds letter,as promised. Any issues concerning the files,please
let me know. Apologies for the delay.

Thanks,

Thincat:tinysmile_grin_t:

[Amethyst]

Before November, while we did have written terms for some specific services
connected with our current accounts, the main contractual terms for our
current account agreements were not written down but were the ones the
‘common law' has established between banks and their customers. Though
we did not have any general written terms for this service, you still had a clear
and binding legal agreement with us under the common law. These
accounts are also governed by Acts of Parliament, rules of regulators like the
Financial Services Authority and codes like the Banking Code.
The legal position on overdrafts before 2"<‘ November 2007 was this. When
you tried to make a payment and you didn’t have enough money in your
account or a planned overdraft, you were asking us to give you an
unplanned overdraft. lf we agreed we would make the payment by giving
you the unplanned overdraft, or an increase in your existing overdraft. Or if
we couldn't agree, we'd write to tell you.

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

You have also suggested that under section 140A and 1408 of the Consumer
Credit Act 1974 (CCA) the charges created an unfair relationship. We
consider our fees to be fair and clearly explained. We have reviewed the
points you raised In your letter as well as the information we have about your
personal circumstances. On this basis we don't believe there could be any
successful legal challenge to the fairness of the banking relationship. We are
not required to justify this view in response to the unsubstantiated claim.

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


THANKS THINCAT XX

CCA - so you are aware where the CCA covers the OD


Example 17
Facts.The manager of the C Bank agrees orally with D (an individual) to open a current account in D’s name. Nothing is said about overdraft facilities. After maintaining the account in credit for some weeks, D draws a cheque in favour of E for an amount exceeding D’s credit balance by £20. E presents the cheque and the Bank pay it.
Analysis.In drawing the cheque D, by implication, requests the Bank to grant him an overdraft of £20 on its usual terms as to interest and other charges. In deciding to honour the cheque, the Bank by implication accept the offer. This constitutes a regulated small consumer credit agreement for unrestricted-use, fixed-sum credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a determination under section 74(3). (Compare Example 18.)



Example 18
Facts.F (an individual) has had a current account with the G Bank for many years. Although usually in credit, the account has been allowed by the Bank to become overdrawn from time to time. The maximum such overdraft has been is about £1,000. No explicit agreement has ever been made about overdraft facilities. Now, with a credit balance of £500, F draws a cheque for £1,300.
Analysis.It might well be held that the agreement with F (express or implied) under which the Bank operate his account includes an implied term giving him the right to overdraft facilities up to say £1,000. If so, the agreement is a regulated consumer credit agreement for unrestricted-use, running-account credit. It is a debtor-creditor agreement, and falls within section 74(1)(b) if covered by a direction under section 74(3). It is also a multiple agreement, part of which (i.e. the part not dealing with the overdraft), as referred to in section 18(1)(a), falls within a category of agreement not mentioned in this Act. (Compare Example 17.)




Example 23
Facts.Under an oral agreement made on 10th January, X (an individual) has an overdraft on his current account at the Y bank with a credit limit of £100. On 15th February, when his overdraft stands at £90, X draws a cheque for £25. It is the first time that X has exceeded his credit limit, and on 16th February the bank honours the cheque.
Analysis.The agreement of 10th January is a consumer credit agreement for running-account credit. The agreement of 15th-16th February varies the earlier agreement by adding a term allowing the credit limit to be exceeded merely temporarily. By section 82(2) the later agreement is deemed to revoke the earlier agreement and reproduce the combined effect of the two agreements. By section 82(4), Part V of this Act (except section 56) does not apply to the later agreement. By section 18(5), a term allowing a merely temporary excess over the credit limit is not to be treated as a separate agreement, or as providing fixed-sum credit. The whole of the £115 owed to the bank by X on 16th February is therefore running-account credit.

Case law referred to in letter - Legal Beagles

Follows from this discussion Re: LLOYDS HAD NO TCs for PERS CURRENT ACCOUNT prior to NOV 07 - Legal Beagles


And also

However, even if an account does not have written terms and conditions, or those terms and conditions are silent on the authority to levy charges, it is well established that the custom of usage of banks permits a bank to levy charges for their services.

Interest and charges levied by banks on consumer credit are subject to the terms of the Consumer Credit Act. As regards charges for accounts and other services, currently there are no regulations in place but there are standards of good practice which are laid out in voluntary Banking Codes, sponsored by the British Bankers' Association and the Building Societies Association.

Bank Charges - WhatDoTheyKnow

So it is fairly established that a bank may charge you interest on borrowing without a specific term in a contract - charges less so.

The thing with the contract which is less certain is that the bank had the right to unilaterally alter / vary the terms of the contract over the period you held your account.

So questions whether the implied terms imposing charges were contractual ? If not did you imply acceptance of the alterations by your conduct ?

Needs some reading of variation of implied contract terms under common law. Wiki is a good starting point Implied terms in English law - Wikipedia, the free encyclopedia .

Common law - the law views the variation as a separate contract, overlaying (amending) the earlier one, which still exists. As is common knowledge, consideration is still a key requirement of all contracting; every contract must be of benefit to both parties in the eyes of the law. Furthermore, each variation must itself satisfy the requirement of consideration—it is not enough that the contract after the variation is of benefit to both, but rather the transaction of variation (in other words, the set of changes it embodies) must itself be of (legal) benefit to both parties

This thread is also helpful about whether a contract can overrule common law.
Common Law - overidden by non statutory terms and conditions - Page 2 - Legal Beagles


So Voller - and

Westminster Bank Ltd v Hilton (1926)
"It is well established that the normal relation between a banker and his customer is that of debtor and creditor, but it is equally well established that quoad the drawing and payment of the customer's cheques as against money of the customer's in the banker's hands the relation is that of principal and agent. The cheque is an order of the principal's addressed to the agent to pay out of the principal's money in the agent's hands the amount of the cheque to the payee thereof."

and others establish common law in banking contracts so variation of terms will be found somewhere in case law history.

(sorry for all the rambling am thinking out loud really)

English Law affecting Banks and their Customers.


There is no obligation on a banker to permit his customer Overdrafts and advances. to overdraw, apart from agreement express or implied from course of business. Drawing a cheque or accepting a bill payable at the banker's which there are not funds meet is an implied request for an overdraft, which the banker may or may not comply with. Interest is clearly chargeable on overdrafts whether stipulated for or not. There is no direct authority establishing this right in the banker, and interest is not usually recoverable on mere debts, but the charge is justifiable on the ground of the universal custom of bankers, if not otherwise. The charging of compound interest or interest with periodical rests has been supported where such system of keeping the accounts has been brought to the notice of the customer by means of the pass-book, and not objected to by him, but in the present attitude of the courts towards the pass-book some further recognition would seem necessary. Such system of charging interest, even when fully recognized, only prevails so long as the relation of banker and customer, on which it is founded, continues in force; the taking a mortgage for the existing debt would put an end to it.

[thincat]

Re: thincat v lloyds

Hi Amethyst,
Thank you for the very forensic analysis of the letter that Lloyds sent me. If I understand
you correctly(I've read your reply through once-I'll need to go over it again) Lloyds are
operating in a legal grey area(?) and the case is arguable. I WILL check out the links you've provided to get more background on what you've said, however I'm glad I've
uploaded the letter to you. More thoughts on this in due course.

Thincat

[Amethyst]

Re: thincat v lloyds

Yes thats a simpler way of putting it, a grey area

We've bought the issue up in Megansdens POC and previously in Derochelle v Lloyds hardship case which went to court and was settled(in part due to a cock up by the court so we never got any further on the lack of terms in that one - thread is Legal Beagles

Lloyds re taking the case quite seriously and have employed the services of Edward Levey - Fountain Court - People - Edward Levey who works with Thanki, who represents Lloyds in the OFT Test Case.

Also ed. has done a lot of research into the lack of pre 07 terms or Lloyds so will have some input.


I dont think the entire case for the charges can or will hinge on this but it is an important element, discussed in the SCoJ, which needs addressing and clarifying before any judgments can be made on UTCCR 5(1) or CCA 140 issues really so they will come in as in addtion or in the alternative to pleadings.

[thincat]

Re: thincat v lloyds

Thanks-more food for thought.