Case 2 - Farmer

The farmer in question had total borrowings of £150,000 divided between a loan account and a current account. The agreed rate of interest was to be base Rate + margin of 1.75%.

Due to a downturn in the farming industry coupled with foot and mouth problems the bank accounts came under severe financial pressure with a number of cheques and direct debits being returned unpaid by the bank.

The bank was threatening legal action when the farmer approached BANKCheck for help and to act as his financial advisers at forthcoming meetings with the bank. Before meeting the bank the accounts were audited and it was found the bank had been charging an interest rate of Base + 4.75% instead of that agreed above. At the meeting this was pointed out to the bank and a refund of £33,000.00 was agreed.

If this money had not been erroneously taken from the account the balance would never have been in excess of the agreed limit.

During the next 12 months BANKCheck continued to work with the farmer when it was agreed to reduce the borrowing by the sale of two building sites. At a meeting with the bank to advise them of the plan for the way forward it was noted that the bank, while refunding the overcharge, had inadvertently forgotten to correct the interest rate and a further overcharge of £6,000.00 had been made and was accordingly refunded.

Some 9 months later it was further ascertained that when the bank corrected the interest rate they incorrectly cancelled the overdraft facility, which resulted in the borrowing attracting penalty interest rates for a short time. A further refund of £2,500 was necessary to correct this situation.