LETTER 2A
[FOR CHARGES
LEVIED WHEN a transaction was declined]
[YOUR ADDRESS]
[DATE]
[BANK’S NAME]
[BANK’S HEAD OFFICE ADDRESS]
Dear Sir / Madam,
Refund of Penalty & Unfair Bank Charges:
[YOUR NAME]
[YOUR SORT CODE]
[YOUR ACCOUNT NUMBER]
From [DATE OF FIRST CHARGE], your bank has levied a total of £[TOTAL AMOUNT] in charges against my account (see above).
Specifically, I have been charged as follows:
[INSERT DETAILS of how the
charges were applied, how much was charged and the reasons why this came about
etc.]
You will be aware that, on 5th April 2006, the Office of Fair Trading (OFT) announced that default charges which are set at more than £12 will be presumed to be unfair and unenforceable in terms of the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083). Charges above this sum will be subject to legal action by the OFT (press release 68/06).
The OFT has also stated that a charge is not automatically fair simply because it is below this sum and, rather than the sums your bank has taken from me, I believe that, for the reasons on which I will expand below, a reasonable charge would be 50 pence.
Accordingly, I request that my charges are refunded as a matter of urgency.
If your organisation does not
agree to refund immediately all unfair charges applied to my account, I would
respectfully submit that it will not meet the “fit and proper person” test to
hold a consumer credit licence under the Consumer Credit Act 1974. In that eventuality, I will submit a 1974
Act complaint to the OFT.
Separately, I am of the view that
your charges represent a penalty and are therefore irrecoverable at common
law. In the Scottish case of Castaneda and Others v. Clydebank
Engineering and Shipbuilding Co., Ltd. (1904) 12 SLT 498 the House of Lords
held that a contractual party can only recover damages for actual or liquidated
losses incurred from a breach of contract.
This is also the position in English law: Dunlop Pneumatic Tyre Co Ltd v New Garage and Motor Co Ltd.
[1915] AC 79.
Your charges do not reflect any
actual loss. Rather, they appear to
represent a lucrative profit-making scheme.
In particular, charges were applied after I entered into a transaction(s)
without sufficient funds in my account.
However, payment was declined by you and therefore your actual loss is
the cost of automatically sending me a computer-generated letter. I would respectfully submit that this can
have cost you no more than 50 pence.
UK banks have recently given
evidence to the House of Commons Treasury Committee on how bank charges are
calculated: “The costs are going to pay for all the people we have who pursue
debt, collect debt, speak to customers and chase payments. The way these charges are arrived at is by
taking these total costs and making some assumptions about the volume that is
going to come through to arrive at the individual charges” (2nd
report, 25 January 2005, paragraph 50).
Accordingly, the charges applied
to my account are not a reasonable pre-estimate of the bank’s loss in relation
to my account. No-one has had to look
at my account or telephone me. No one
has had to collect anything. Your
charges would appear to represent a device to recover global losses (for
example, loan defaulters, bad debt write off, including commercial lending in,
and outwith, the UK).
In light of the above, I request
that all charges applied to my account be refunded within the next 7 days. I reserve the right to commence court
proceedings without any further notice and to seek an additional award for distress
and inconvenience, together with legal expenses.
Yours faithfully,
[YOUR SIGNATURE]
[YOUR NAME]