One Fool's claim against unfair bank charges seems to be going all the way, as the bank managed to sneak in a defence. Allow us to pull this defence apart.
From my last article on this subject, you will have assumed that my claim for bank charges was on the verge of victory. Unfortunately, I was jumping the gun a bit.
I had asked the court for a default judgment against my bank, because they had not acknowledged my claim on time. However, it turns out our letters were both in the post, and the bank's beat mine to the court's inbox.
My bank's defence
As a result, the claim has moved on. The court sent me the bank's defence along with an Allocation Questionnaire. I'll start by pulling apart the former.
The bank's defence was, at first read, a plausible one. (In my next spare moment I'll type it word-for-word into a post on our Reclaim Your Unfair Charges discussion board for.) In summary, the bank's main point was that it was charging for a service, not a breach of contract, and therefore its charges cannot be called penalties. The bank also claimed that its charges are fair and reasonable.
What's interesting is that it reads like a cut-and-paste job. It's as though someone wrote an email to a colleague saying: "Come up with a defence for all these unlawful charges claims and we'll just paste them into all these defence forms."
My first reason for suspecting this is that it's a generic defence; the bank hasn't tailored it to my claim. My second reason is that it's got that weird error that some email programs have: all the apostrophes have been replaced by question marks.
The third reason is the most important one. Put simply, the bank didn't answer all the points in my claim. A proper defence should take each point of the claim and deny it, and explain why it is denied. Failure to do this means that part of the claim is accepted by omission.
Therefore, when I wrote in my particulars of claim that the bank's charges "...are contrary to the Unfair (Contract) Terms Act 1977 s.4", the bank's solicitors should have written: "We deny that the defendant's charges are contrary to the Unfair (Contract) Terms Act 1977 s.4," and then they should have said why they deny it. They did not do this. In fact, they didn't specifically deny any part of my claim. Only the parts that were denied in their generic defence will be any good for them.
I don't think much of the defence. It fails to deny large parts of my claim and the argument that the penalties are charges for a service is weak. Otherwise, a company could add lots of penalties into its contracts, and claim that they were for a service and therefore not penalties.
The plot thickens!
As I wrote in my previous article, after receiving a defence and an Allocation Questionnaire (AQ), the next stage is to complete the AQ and return it to the court, which I did.
However, there's been a further development. I received a letter from the bank's solicitors, with a copy of their AQ. In their cover letter, the solicitors requested that I send them a copy of mine. The logical reason for this is to make me panic, although they may have another reason for it.
Either way, I don't see it is as significant. If they want a copy of my Allocation Questionnaire they can have it. What's interesting is that, on the AQ, the bank has asked for the claim to be postponed for a month so that we can attempt to settle the claim outside the court. More stalling tactics!
Finally, their AQ states that they intend to call a witness to give evidence at the hearing. Perhaps this is another scare tactic!
And finally, to boost your confidence. And mine!
Despite my confidence, with so many Fools relying on the outcome of my case, I can't help feeling a little anxious. However, I mustn't let those small doubts bother me, as the odds are clearly in our favour. I'm going to recapitulate some of the reassuring facts and figures:
- Defences have been filed before, and any solicitor worth his pension would be able to come up with a spurious defence that sounds plausible to the layperson.
- My case isn't the first to get this far. Some people have not had a refund from their banks until a court date has been allocated.
- Some cases have gone within a hair's breadth of a court hearing, but, as the Consumer Action Group says, of the 2,600 people that have responded to its survey, all of them have successfully recovered their charges and the banks didn't turn up in court for any of them!
- The Financial Ombudsman Service has recently stated a similar success rate. Apparently every single customer who has gone to it has had a refund of their charges! (I'm trying to contact them for more information, so I'll keep you informed.)
- With every reasonable - in my view - interpretation of consumer law, I don't see that the banks have a leg to stand on.
- Plus, let's not forget that the Office of Fair Trading's interpretation of current consumer law means that the charges are unlawful as well.
I think I've just succeeded in getting rid of my anxieties!