# Bank Error??



## butterfield (3 May 2008)

Looks like my bank made an error in 2005 when I purchased a bank draft.  They debited my account by substantially less than the draft amount.    
At this time I had a lot going on refurbishing a house and was paying a lot of people by draft and didn't notice. 

They want to meet me and discuss this - just wondering where I stand on this??  Anyone had a similar experience ??


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## mathepac (3 May 2008)

How much are we talking about here - 10's, 100's, 1,000's, more?

As to where you stand, I think at their mercy, if what they allege is what happened.

If its a large amount (different from everyones perspective) ask them for an interest free loan over the next 25 years to pay the money back.


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## so-crates (3 May 2008)

You still owe them the money but the mistake is theirs. I would suggest negotiating a repayment schedule to suit you. That way they get paid but you are least put out by it.


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## Orga (4 May 2008)

Key phrase "looks like" - you will need prima facie evidence to prove the assertion.

Suggest that you invite them to meet you in a local hotel/cafe, not in the bank. Tell them that you can't come into the bank but would be willing to meet elsewhere. Their response will tell a lot. Don't try to explain - you are in negotiation phase and you will need some negotiating points.

Now here's the contentious bit (morally/ethically you owe the bank) but in the real world you don't and a "good" advisor will make it work.

Good luck


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## Vanilla (4 May 2008)

Orga said:


> Now here's the contentious bit (morally/ethically you owe the bank) but in the real world you don't and a "good" advisor will make it work.


 
What do you mean by this? In the real world surely the OP does owe this money.


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## MandaC (4 May 2008)

I think what Orga means is because it was a draft, there is nothing to stop the OP disputing what was actually paid and/or debited.   A draft should not be handed over until it is paid in full, be it in cash or debited to account or whatever.  Kind of like checking your change before leaving a shop.

I am not sure where the Bank would stand on this legally and it might be worth taking such advice.

Having said that, if you know you owe it, pay it, but do so certainly on an interest free option over a term you can afford, if its that big an amount.


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## Orga (4 May 2008)

What I mean is the OP sought to purchase a draft and tendered payment, payment was accepted, the draft was exchanged and the transaction concluded. Now, 3 years later the vendor is seeking further monies. As an analogy, imagine that 3 years ago you were in a shop and bought a jumper. Now, 3 years on, the shopkeeper wants you to pay further monies because he believes that he didn't charge you enough at the time even though he accepted payment and gave you the goods.


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## sam h (5 May 2008)

Orga makes a very interesting point. A draft is effectively a "product" you are purchasing from the bank. So if the standard contract rules apply...the op offered to purcahse, the bank accepted & the consideration was agreed (ie -the amount on the draft, rather than the amount taken from the a/c). From other posts recently about DD's coming 6/8 months later...it appears that they have up to 6 years to seek the money.
I think ultimately you will have to pay over the money, but I reckon, as already suggested, you should have a good opportunity to negotiate the terms of the repayment.
As an aside - I wonder would they agree to meet you at a time and/or at a place that suits you as I don't see why you should have to take time off work or travel to help them rectify their mistake?


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## butterfield (6 May 2008)

Thanks for all replies they have helped me decide what to do, I think Orga made an interesting point .. like if a price displayed is wrong, they are legally obliged to honour it.  (Amount involved is approx 20k).   Anyway I know I owe the money, though its 3 years ago and I had completely forgot about it as was handling a lot of money at time (large mortgage / refurbishment project) at the time.  Think the point about meeting them neutrally is good as I won't talk on the telephone to them anymore as I think they could be recording it !!

Spoke to Financial Regulator who says I should deal with head office and get a loan over a long period which should be interest free.  

Would welcome any further comments ?


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## mathepac (6 May 2008)

butterfield said:


> .. like if a price displayed is wrong, they are legally obliged to honour it...


I didn't interpret Orga's post above this way -  a displayed price is only an invitation, not a contract.


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## mathepac (6 May 2008)

I know I (and the Financial Regulator - exalted company) suggested the long-term interest-free loan, but how does borrowing over a long term sit with you, and also how might that effect your future creditworthiness?


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## mf1 (6 May 2008)

"(Amount involved is approx 20k)."

Oh, dear god in heaven........................

You know what? You owe the money, that appears to be undisputed. If the bank sued, they would recover. Its a mistake, nothing else. It is not offer, acceptance and the conclusion of a contract. 
You have had the benefit of the 20K for three years - think of it as an interest free loan. 

By all means negotiate the method of repayment but  "a "good" advisor will make it work." is just a nonsense statement. 

If I was advising you, I'd be saying how are you fixed for paying it back, can you pay it back in one lump sum or do you ( genuinely) need time? I would not be playing or advising you to play, silly buggers.

mf


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## MandaC (6 May 2008)

I would certainly seek legal advice on it.  It would look like they know they are on shaky ground.

 If you were to go back to the Bank now and say, you left me €20,000 short three years ago, what would they say to you?  I would like to think that if they were over a certain amount, that they would return the funds.


If you are meeting with anyone from the Bank, its good advice to meet in a neutral place.  Also, do not go alone, have someone there as an independent witness (not to say anything).  I would be surprised if the Bank do not do this from their side.  I would not make any suggestions, just see what they are putting forward and then go away and seek legal advices on it.

Morally, if you know 100% you owe it, then pay it, mistakes do happen with human error and I am not immune.    Legally, I am not so sure.


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## mf1 (6 May 2008)

" Legally, I am not so sure."

Legally, OP owes the money. End of story. While it would be embarrassing for the Bank to sue and have the problem made public, they must account for the money. They would succeed in a legal claim.

mf


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## FredBloggs (6 May 2008)

mf1 said:


> While it would be embarrassing for the Bank to sue and have the problem made public, they must account for the money.
> 
> mf


 
What I can't understand is how they accounted for the shortfall in 2005.

surely when they were cashing up the day the op got the draft they'd have noticed the €20K shortfall?

If it were me and I knew for definite I owed the money I'd feel morrally obliged to pay it but would definitely negotiate something.  Over 25 years with substantial discount if repaid sooner.

The Op states they were handing large sums at the time and didn't notice the discrepancy but surely €20K not debited from your account would be something you'd notice so my advice to the Op is be 100% sure there was actually a €20K difference - don't just go on the Bank's word


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## butterfield (6 May 2008)

Thanks again everyone and to answer I am not now able to repay all in lump sum (have large mortgage and struggling with it) so will go route of long term loan

Wondering should I seek independent legal advise and have my solicitor negotiate for me on this ....  or just go along with long term loan option and sort it out myself ..... am a bit nervous of dealing with them on the issue as its obviously something I am not familiar with and afraid I might make a mess of things somehow.


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## butterfield (6 May 2008)

OP here again - would also say the only reason it has come up with them now is that the draft was presented for payment and I wonder also as someone said why it did'nt show up somewhere in 2005 in their accounts??


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## FredBloggs (6 May 2008)

butterfield said:


> Thanks again everyone and to answer I am not now able to repay all in lump sum (have large mortgage and struggling with it) so will go route of long term loan
> 
> Wondering should I seek independent legal advise and have my solicitor negotiate for me on this .... or just go along with long term loan option and sort it out myself ..... am a bit nervous of dealing with them on the issue as its obviously something I am not familiar with and afraid I might make a mess of things somehow.


 
If you do get legal advice make sure you're not out of pocket for it.  Factor the cost in to what's repaid


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## bond-007 (6 May 2008)

Hire a negotiator and get him/her to negotiate a settlement. It could save you alot of money.


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## butterfield (6 May 2008)

Bond 007 - by negotiator do you mean a solicitor or maybe an accountant ??

I am certainly wary of meeting with them as I somehow feel that they will have the advantage over me as they are a big organisation with plenty of advisors etc.


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## bond-007 (7 May 2008)

butterfield said:


> Bond 007 - by negotiator do you mean a solicitor or maybe an accountant ??


Yes. Normally such a person is trained to negotiate settlements without the involvement of the customer. 



butterfield said:


> I am certainly wary of meeting with them as I somehow feel that they will have the advantage over me as they are a big organisation with plenty of advisors etc.


I would certainly not meet them alone. I would bring someone along and pick a neutral venue. Have the witness take notes.


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## Mpsox (7 May 2008)

Normally, legally you cannot take advantage of a banking error, as previous posters have alluded to, you owe them the money, end of story on that

However, no reason why you should be out of pocket for their incompetence. I would insist on an interest free loan and would also ask them to cough up any legal costs you've encountered if you have taken legal advice. 

Be prepared for the meeting and I suggest you commit to nothing there and then. I suggest you ask them to explain in writing
why the error occurred
why it is only coming to light now
what efforts they have taken to ensure this does not happen again
Can they guarantee that no further instances of this have occured in relation to your accounts (how do you know this is the only instance?).
Request a written apology from the Regional Manager for the inconvenience this has caused you

As for why this has happened? Most banks have internal reconciliation from time to time, be curious as to why this has happened


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## Orga (7 May 2008)

mf1 said:


> "(Amount involved is approx 20k)."
> 
> By all means negotiate the method of repayment but "a "good" advisor will make it work." is just a nonsense statement.
> 
> ...


 
With due regard, the statement was offered as an opinion based on my experience of dealing with the banks over a substantial number of years.

The argument that I evinced was:

1. In essence, no evidence has been provided to prove conclusively that the OP did not pay the monies that were requested at the time. You will need conclusive evidence to prove this point and to move any further in negotiations.

2. Should there be conclusive evidence then an ethical obligation exists to pay for that which was rendered but this is a matter for the individual's own conscience.

3. Discussions with the bank should at this point be at a mutually agreed venue, preferably not in the bank and should not at this time result in any undertaking being given by the OP other than to consider the matter further.

4. If the OP wishes to dispute the matter than professional advice would be worthwhile if the OP doesn't have the background in similar matters. Nevertheless, pursuing the matter is relatively straightforward.

5. The OP purchased a bearer instrument and paid a price for this instrument. My reading is that the price was set by the vendor (bank) and that the money was taken by the bank from the OP's account. At no time did the OP seek to deceive, defraud or act in any manner that might be construed as wishing to not fulfill the debt arising from the purchase. The bank accepted payment and there the matter rested for 3 years. The transaction is now complete and no further responsibility rests with the OP. There is no legal responsibility on the OP to point out to the bank that it made a mistake. It is the bank's responsibility to ensure that for those products that it sells (and this is the unique point to this case-a draft is a product) that it sells them at the correct price. 

6. In this context, I offered an opinion based on substantial experience of successful negotiation with banks.


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## mf1 (7 May 2008)

"5. The OP purchased a bearer instrument and paid a price for this instrument. My reading is that the price was set by the vendor (bank) and that the money was taken by the bank from the OP's account. At no time did the OP seek to deceive, defraud or act in any manner that might be construed as wishing to not fulfill the debt arising from the purchase. The bank accepted payment and there the matter rested for 3 years. The transaction is now complete and no further responsibility rests with the OP. There is no legal responsibility on the OP to point out to the bank that it made a mistake. It is the bank's responsibility to ensure that for those products that it sells (and this is the unique point to this case-a draft is a product) that it sells them at the correct price. "

Try that in front of a judge. 

mf


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## Orga (7 May 2008)

mf1 said:


> "
> Try that in front of a judge.
> 
> mf


 
I don't understand where you are coming from in legal terms with that comment. Can you point to precedent in the area of which I may be unaware?

Many thanks.


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## mf1 (7 May 2008)

Orga said:


> I don't understand where you are coming from in legal terms with that comment. Can you point to precedent in the area of which I may be unaware?




I think its called the difference between right and wrong? 

Clever talk is all very well but I believe that the OP 

1. Admits the error - albeit by the bank and not themselves
2. Admits having had the  use of the money
3. Would love to find a way of not paying it back immediately or, having been goaded on on this board, at all.
4. Is falling back on the  old "oh, they are so big, and I'm so ickle........" line of reasoning.

The money is due. OP may be able to negotiate settlement terms but if OP ends up playing  silly buggers, he does not stand a rats ass chance in hell in a court situation. 

mf


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## bond-007 (7 May 2008)

He is entitled to negotiate settlement with the bank for less than what they think is due.


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## Orga (7 May 2008)

mf1 said:


> I think its called the difference between right and wrong?
> 
> Clever talk is all very well but I believe that the OP
> 
> ...



I view your comments as sarcastic in nature in this post and in previous posts on this thread, perhaps a mod might consider the matter: I have never suggested anything less than an ethical obligation to repay the money but I have always made it clear that this is a personal matter, conscience being a personal thing. 

In providing advice I have done so in an impartial manner, outlining the options as I see them and based on the information that was provided. At no time I have suggested playing games nor have I resorted to any argument about the bank being "bigger" than the OP. I have simply provided reasoned, impartial advice. 

You have disagreed with this advice and being open to re-considering in light of new evidence I wondered if I had missed some point of law or some precedent and asked that you point to either. I await a response on those points and without that I remain to be convinced that the OP would be anything other than successful in a court of law.


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## mf1 (7 May 2008)

I repeat. 

Try that in front of a judge.

mf


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## so-crates (8 May 2008)

I do wonder if it wasn't a big bank would everyone be as quick to encourage OP to try not pay?


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## mayoman2 (8 May 2008)

They are greedy feckers and I would have no problem stiffing them - That's my slide. However, I would speak to a solicitor and find out exactly where you stand legally and then decide. I would not meet them before that. It may cost you a few quid but well worth it.. then at least you are meeting them (maybe with a negiotator) and you are well informed.


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## ClubMan (8 May 2008)

mayoman2 said:


> They are greedy feckers and I would have no problem stiffing them


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## mf1 (8 May 2008)

mayoman2 said:


> They are greedy feckers and I would have no problem stiffing them - That's my slide. However, I would speak to a solicitor and find out exactly where you stand legally and then decide. I would not meet them before that. It may cost you a few quid but well worth it.. then at least you are meeting them (maybe with a negiotator) and you are well informed.




It helps if OP has a case. Which OP does not. 

"He is entitled to negotiate settlement with the bank for less than what they think is due."

I would rephrase that. 

"He is entitled to attempt to negotiate settlement with the bank for less than what they think is due."

Lots of people posting seem to have lost sight of the fact that OP has happily enjoyed an interest free loan of 20K for 3 years. Quite a nice position to be in, me thinks but Fairy Money invariably has to be paid back. 

mf


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## mayoman2 (8 May 2008)

Polite Mayoman now!!

Get yourself to a solicitor and get legal advice. I could say one thing, someone else could say another thing! By getting legal advice you know exactly where you stand. While everyone here is giving comments, independant legal advice is the way to go!! End of story

My slide is: if I could get away with it, I would. I have no morals.........


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## so-crates (8 May 2008)

I suspect mayoman2 that mf1 has kindly given the OP legal advice gratis  It would be a shame to advise the OP to spend money on just being told the same thing in person!


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## Bank Manager (8 May 2008)

Very interesting thread ....

Saddened a little by the second last posting - what would we all say if the Bank took this approach (if they had overcharged the Op three years ago) ...?

Bear in mind there may be some bank offiical currently losing sleep over this issue if they were the one to make the original mistake, not a nice place to be I can assure you ...

My advice to original poster (I'm assuming the bank did make an error three years ago and somehow undercharged the OP by c. E20k) - find it amazing that it took this length of time to discover - can't come up with a logical explanation for that ... I believe whatever bank it is will be very happy to recover their loss, and should be more than willing to negotiate either a lump sum settlement (even with some element of discount) or may as suggested by another poster be willing to provide an interest free loan over a period of time to facilitate the OP...

As for the morality of the situation (I'm obviously biased, so I'll leave others to discuss that issue ...).

Best of luck whatever you decide to do.

Regards,


BM


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## mayoman2 (8 May 2008)

Bank Manager said:


> Very interesting thread ....
> 
> Saddened a little by the second last posting - what would we all say if the Bank took this approach (if they had overcharged the Op three years ago) ...?
> 
> ...


 
Do you remember all the over-charging issues the last few years by some of the main banks in ireland, never mind their greed when it came to horsing out mortgages to people who can't afford them - look at the whole sub-prime market mess in US and the impact it has had.

I feel for the Bank official but not for Banks ..


In relation to mf1, well if thats the case far enough and it is a good heads up, but I would go find out for myself and pay the few quid. I wouldn't feel comfortable going on the info that I read on the web from a user, especially stuff like this. No disrespect to anyone but I just wouldn't do that.


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## Bank Manager (8 May 2008)

mayoman2 said:


> Do you remember all the over-charging issues the last few years by some of the main banks in ireland, never mind their greed when it came to horsing out mortgages to people who can't afford them - look at the whole sub-prime market mess in US and the impact it has had.


 

You've hit the nail right on the head - yes - the banks did overcharge, and they had to refund those they had overcharged (and rightly so) with interest - my point is that it is unreasonable to expect this type of rule for one party and yet suggest when the shoe is on the other foot that the person should try and get away with it.  Just my opinion ...

In relation to sub-prime issue - I agree with you, absolutely daft practice (for both parties to be involved in i.e. financial institutions and consumers) - however I can only speak for my own organisation in that we have no exposure to the sub-prime market, and as far as I'm aware neither do the other main financial institutions in Ireland, so I don't really believe it has any bearing on the OP's posting.

Regards,

BM


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## Orga (8 May 2008)

I refer mf1 variously to:

Moneylenders Act 1933 S13(3) & S19(1) In particular "...
19.—(1) No proceedings shall lie for the recovery by a moneylender of  any money lent by him after the commencement of this Act or of any interest in  respect thereof, or for the enforcement of any agreement made or security taken  after the commencement of this Act in respect of any loan made by him, unless  the proceedings are commenced before the expiration of three years from the date  on which the cause of action accrued:"



I'll be pointing the judge in that direction as a start.



If we take the "narrow" view that this was in fact a credit facility then I point you to the Consumer Credit Act 1995 S43: extract quoted for brevity but it envisages a credit agreement being in place and there is NO evidence here that such was the case, but am just covering the bases.



(3) If the default described in subsection (2) continues for a further  period of 14 days, then while the default so continues, the creditor or the  owner, as the case may be, shall not be entitled to enforce the agreement, or  any right to recover goods, and any person shall not be entitled to enforce a  security given under the agreement."

And in relation to looking for payment:

" Towhit S49 "
49.—(1) A person shall not make a demand for payment or assert a present or prospective right to payment in respect of an agreement which is unenforceable under this Act.

  (2) A person shall not, with a view to obtaining payment in respect of an  agreement which is unenforceable under this Act—

  (  a ) threaten to bring any legal proceedings,

  (  b ) place or cause to be placed the name of any person on a list of  defaulters or debtors or threaten to do so, or

  (  c ) invoke or cause to be invoked any other collection procedure or  threaten to do so."


And finally...for now...I refer to the Bills of Exchange Act 1882..various sections

" *46 Excuses for delay or non-presentment for  payment*

 (1)Delay in making presentment for payment is  excused when the delay is caused by circumstances beyond the control of the  holder, and not imputable to his default, misconduct, or negligence. When the  cause of delay ceases to operate presentment must be made with reasonable  diligence."


In this case delay for presentment cannot be excused as it is due to the negligence of the holder.


" 
*45 Rules as to presentment for payment*

 Subject to the provisions of  this Act a bill must be duly presented for payment. If it be not so presented  the drawer and indorsers shall be discharged.
 A bill is duly presented for payment which is  presented in accordance with the following rules:—
 (1)Where the bill is not payable on demand,  presentment must be made on the day it falls due.
 (2)Where the bill is payable on demand, then,  subject to the provisions of this Act, presentment must be made within a  reasonable time after its issue in order to render the drawer liable, and within  a reasonable time after its indorsement, in order to render the indorser  liable.
 In determining what is a reasonable time, regard  shall be had to the nature of the bill, the usage of trade with regard to  similar bills, and the facts of the particular case."



And finally, in this case, this bill is in fact payable on demand as this is the normal practice with bank drafts and given the manner in which the system operates 3 years is not a reasonable time in any view. Therefore the bill is discharged.



While I accept your opinions as being considered, perhaps mf1 you can point to some contrasting examples????


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## mayoman2 (8 May 2008)

In relation to BM
Fair enough they refunded and I would say the pain was felt mainly in PR side of things, but I would say there was some discussions whether they decided to pay or not. 
I don't think the same process should be applied as the banks are providing products and services, while the customer is availing of them. They should have processes and procedures to catch these errors and if you don't tough. Three years is a long time.... they didn't even spot 20k until when... and the whole mortgage side is sliding and now they have time. 

Also 20k to the banks is nothing, 20k to the OP is huge cash and the same pain is not felt. I don't think banks have any morals towards their customers and what is best for the customer, just what is best for them and how they can make the most profit. I have the same attitude for the banks as they have to me. 
The banks analyse their customers and target certain individuals for loans etc. I know as I created some of the OLAP reports for them.

If OP has to pay, I would make them pay as well for the mess by making them wait many years for complete payment or get some serious discount. I think also this is bad PR for a bank(if details got out in court) and they will be more than willing to see this matter sorter in a private manner.


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## Bank Manager (9 May 2008)

I think if you re-read my original post - you'll see I suggested what you've suggested in your last paragraph.

As for your previous paragraphs we'll probably just have to agree to disagree.

Regards,

BM


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## mf1 (9 May 2008)

Orga said:


> I refer mf1 variously to:
> 
> Moneylenders Act 1933 S13(3) & S19(1) In particular "...
> 19.—(1) No proceedings shall lie for the recovery by a moneylender of  any money lent by him after the commencement of this Act or of any interest in  respect thereof, or for the enforcement of any agreement made or security taken  after the commencement of this Act in respect of any loan made by him, unless  the proceedings are commenced before the expiration of three years from the date  on which the cause of action accrued:"
> ...








Well thats all very interesting but its helpful if quoted law actually applies to a given scenario.


Moneylenders Act
Does not apply to Banks. But I'm sure the Judge would be interested in whatever point is being made.  If it has any relevance. Oh and the Bank has six years to institute proceedings. 


Consumer Credit Act 1995. 
There is no credit agreement – it’s a mistake. Sections 43 and 49 have no application. 


Bills of Exchange Act 1882
The problem does not lie with the Draft – it lies with the fact that, in error and by mistake, the Bank debited a lesser amount to OP for the Draft than was due. And, in any event, from what I can see from the post, the Draft has been honoured 


OP has enjoyed the benefit of 20K for three years and must make good, and will, if it comes to it,  be made to make good ,by a Court. When seeking to negotiate, it is helpful, for both parties,  to look at their own (a) best case scenario on the one hand and (b) worst case scenario on the other. Bank may be embarrassed and, on that basis only, probably will be willing to reach some compromise but OP has only mistake on their side. And I suspect a  Court will have an issue with the idea that you could have 20K to spend and not notice it until Bank brought it to your attention. 

Law in every day practice is c.50% law and 50% common sense

Relevant case law for this scenario is as follows:

National Bank Limited V O’Connor and Bowmaker ( Ireland) Limited 1969 103 ILTR 73
Kelly V Solari 1841 9 M & W 54
Re Jones Ltd V Waring and Gillow Limited 1926 AC670

mf


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## bond-007 (9 May 2008)

OP should employ a mediator to negotiate a settlement for less than the €20k they say he owes.


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## ClubMan (9 May 2008)

Since the original poster has received a range of different advice there seems little point in discussing this matter further. Thread closed.


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