OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

[EXC]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

How is this "cost" quantified.
Are they working on actual lose, or is this lose due to the reduce penalties, ie reduced income from fleecing their customers ??

I would imagine that ''cost'' would equate to total loss. Don't forget that they would still have been raking in 12 sobs a pop anyway - which would easily cover costs - so anything above would have been all bunce.

In answer to my own question, the total cost to industry is estimated at £500m:

''The OFT estimates that the level of default charges across the
industry has led to unlawful penalty charges currently in excess of
£300 million a year. However, grossing up HBOS’s £60 million
projection for 2007 for the whole industry (based on HBOS’s share
of outstanding balances at end 2006) gives an even higher figure.
It implies an industry wide impact of more than £500 million.''

[poorbuthonest]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

Sorry to Hijack thread but seems appropriate.

I was one of the many EGG customers that had their cards withdrawn, for no reason. I had had a card with them since 2001, which in the main i paid off in full every month. I then started a business in 2009 and placed about £7500 on the card. the business didnt go well, then egg withdrew the card, which i was in part using to fund the start up. It failed after 18 months. They are now commencing proceedings for recovery as I am unable to pay it and I stopped the DD.

my question to the forum concerns the UTCCR. As the card was withdrawn whilst not in default EGG varied the terms by withdrawing the service element of providing revolving credit. They just wanted the balance paying off at their full rate of interest.

I wrote to them saying that this breached the UTCCR and they they should reduce their interest to reflect their variance to the contractual terms, As they no longer supply revolving credit facility. i would not have taken out a loan at c20%, but this is now what they want me to pay.

Is this an argument i could pursue if and when it goes to court, with any chance of success. I offered to pay at a lower interest rate, even though my business has now gone.

[EXC]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

I think you'll find that all credit card contracts contain a clause that allows the provider to vary the terms of the contract with regard to the interest rate and also that they can withdraw the card at any time.

[legalskunk]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

I think you'll find that all credit card contracts contain a clause that allows the provider to vary the terms of the contract with regard to the interest rate and also that they can withdraw the card at any time.

Is this enforceable even if the client has kept up minimum payments?

[IanM]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

I think you'll find that all credit card contracts contain a clause that allows the provider to vary the terms of the contract with regard to the interest rate and also that they can withdraw the card at any time.

Surely they can can only charge the new interest rate on the debt incurred after the change, they can't be allowed to lend money at one rate and then change to a higher rate once a debt has been incurred.

[leclerc]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

Surely they can can only charge the new interest rate on the debt incurred after the change, they can't be allowed to lend money at one rate and then change to a higher rate once a debt has been incurred.

They can if the amount owed is not paid off. Remember in mortgage contracts that if you are on a variable rate then the interest charged can go up based on the bank of England base rate/ bank's own base rate so yet they can indeed charge for a debt incurred prior to the change.

[jax50]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

They can if the amount owed is not paid off. Remember in mortgage contracts that if you are on a variable rate then the interest charged can go up based on the bank of England base rate/ bank's own base rate so yet they can indeed charge for a debt incurred prior to the change.

When a lender provides a mortgage, they themselves 'borrow' all the money at the prevailing rate..and that remains the interest rate throughout for the lender. It doesn't change. This is why fixed interest rates can be offered. So, in reality, changes in interest rates thereafter are a nonsense because the lender is not borrowing any more capital and is therefore not paying for the original amount at any other than the rate rthey paid at the outset ? New interest rates apply only to new borrowers and furtehr advance amounts.

True or False ?

[leclerc]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

That's why I said that in variable rate contracts rather than fixed rate contracts. I stand by the comments I made in response to another poster which relates to credit cards varying the rate that they offer to customers and changing that rate. Remember, you do not have to accept it and there will be routes out of it such as paying the balance off in full.

[Hurricane Puffrose]

Re: OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR

couple of rookie questions, and im sorry but this is a little over my head.

Does this mean that they cannot charge over £12 per charge, also does this mean that Joe (or jo) Public can reclaim said now unfair charges?