Interest Rates Advisory Centre : : : Legal Services

Interest recalculation, Finance Cost Assurance Services and reconstruction of financial facilities is a complicated process. Everything turns on the interpretation and meaning of contractual documents and the applicable law governing these contracts. If and when a dispute between a Client and a bank/mortgage finance institution goes to litigation, the basis of the Interest Recalculation becomes critical.

The IRAC Process generates several outcomes;

A Credit Verifier! Report based on the Banking Facility Letter or Mortgage Deed;

A Credit Verifier! Report based on the Banking Facility Letter or Mortgage Deed as read with The Banking Act, Cap. 488, Laws of Kenya;

A Credit Verifier! Report based on the Banking Facility Letter or Mortgage Deed as read with The Banking Act, Cap. 488, Laws of Kenya and with The Central Bank of Kenya Act , Cap. 491, Laws of Kenya;

A Credit Verifier! Report based on all the above, i.e. the Banking Facility Letter or Mortgage Deed, The Banking Act, Cap. 488, Laws of Kenya, and The Central Bank of Kenya Act , Cap. 491, Laws of Kenya.

An Interest Recalculation applying Section 39 of The Central Bank of Kenya Act between 23rd July 1991 to 18th April 1997, and between 1st January 2001 to 31st July 2005, and applying Section 44 of The Banking Act since 1st November 1989.

Needless to say, the premises of The IRAC Process are based on a plain reading of the law by experienced Advocates of the High Court of Kenya and Commercial Lawyers. Much as The IRAC Process is geared towards amicable settlement, IRAC ensures that our Client’s case is legally watertight.

IRAC does not issue Credit Verifier! Reports and then leave you alone to help yourself as best as you can. Rather, IRAC stands by you every step of the way to a refund and, if necessary, will appear as Expert Witness on your behalf in Court.

What causes interest overcharges?

Application of the wrong method of interest calculation; The method of interest calculation applied by the bank usually varies from the method agreed upon between the bank and the Client in the contractual documentation.

Application of wrong interest rates; This refers to a difference between the interest rate(s) advised or agreed upon in the contract, and the interest rate actually applied by the bank.

Wrong or Delayed Interest rate change dates; In the case of changes in the interest rates applied, the exact date from which a particular interest rate is applied is important in determining the accuracy of the interest charged.

Wrong Value-dating of cheques; This refers to the exact dates on which a cheque gains value. If this is not done accurately, interest charged will be higher than it is supposed to be.

Debit reversals; This is actual proof that banks make errors, and that they try to correct these errors. Unfortunately, these errors are not easily spotted. If and when a customer spots them, the amounts that had been wrongly debited into the customer's account by the bank are often "corrected" by the bank by crediting the account with the same amount on a MUCH LATER DATE. This should not be the case. The "correction" should be made and BACKDATED to the exact date of the original "error". Otherwise, "errors" made years ago compound into major interest overcharges, and make the subsequent "correction" a nullity in effect.

SO, WHAT ARE YOUR OPTIONS?

You can continue to "think about it". However, time is money. You continue losing thousands, even millions, of shillings. Don't think about it any more than you already have.

You can ask your bank to re-check their interest calculations which they will not do, because they do not have the time or inclination to do such hard work.

Pick Up the phone and Contact IRAC. Subscribe to IRAC Process where all the work is done for you by experts using the Credit Verifier! Software