Credit Card Rate Jacking - have you been a victim ?

[Amethyst]

Have you been a victim of rate jacking ?

We are looking for case studies to assist with a BBC Programme and investigation into the practise ;

• who carries a balance on their credit card (i.e does not pay it off in full every month) but is not in extreme finanical hardship;
  
  
• - APR on their credit card has increased in the last year or 18 months by ten per cent or more;
  
  
• - has not approached their credit card provider about lowering their APR or who has asked but been turned down;
  
  
• - who has a mainstream credit card (i.e. not a sub-prime one like Vanquis. Capital One might be okay though.)
  

Please post and / or contact Tools - admin@legalbeagles.info - with details of your experiences Thanks all

[jax007]

Re: Credit Card Rate Jacking - have you been a victim ?

Am all for this!

Will have a recky and email Tools ... have a number of cards with obscene rates!!

jaxx

[Curlyben]

Re: Credit Card Rate Jacking - have you been a victim ?

Oi! over here

Just let me know what you need.

[jax007]

Re: Credit Card Rate Jacking - have you been a victim ?

Ooops!

[Amethyst]

Re: Credit Card Rate Jacking - have you been a victim ?

Thanks Guys

[Amethyst]

Re: Credit Card Rate Jacking - have you been a victim ?

LSCB


In January 2010 the LSB completed a review of compliance by Lending Code subscribers with the Lending Code's provisions on risk based credit card repricing.

Click here to view report


Conclusion and recommendations

Compliance with the Code’s risk based repricing requirements is good. However there are a number of areas where we feel that the information to customers could be clearer.

Although notifications of interest rate changes made on statements contain the required information and are issued within the Code’s timescales, the information can be overlooked unless the customer reads their statement carefully. Notifications sent by a separate letter are more likely to be recognised by the cardholder as an important communication that requires their attention and action. We would recommend that consideration be given to rate increase notifications being made by a standalone communication using the usual medium for contact (e.g. post/e-mail) for that customer.

A number of firms refer to rate changes in their communications but do not specify whether the rate is going up or down and some describe the changes as a change to card usage terms or a notice of variation. It is important that customers fully understand if their interest rate is to increase and we feel that this would be helped if the word “increase” rather than “change” is used and if the communication is clearly headed something like “Notice of increase in interest rate” rather than a more general reference to changes to conditions of use.

Rather than referring customers to a separate document where they can find information about the applicable interest rates, we recommend that interest rate change notifications should include the old rate and the new rate for each type of transaction (purchases, balance transfers, cash advances) so that customers can make an easy comparison between old and new terms.

Card providers are not required to explain to customers why their rate has changed unless asked to do so. However a very general explanation or a suggestion to check their Credit Reference Agency data or refer to general market conditions is unlikely to be sufficient for customers to understand why their account rate has been changed. Card companies should be able to explain to customers how their account behaviour or risk profile has led to a rate increase.

Although we found good standards of compliance in this area, we will continue to monitor credit card repricing to ensure that these standards are maintained and that communications are sufficiently clear for customers to understand how their rate has moved and what options they have open to them.

[borgbaiter]

Re: Credit Card Rate Jacking - have you been a victim ?

hi

i have a citi credit card. got a letter yesterday saying they were reducing the credit limit (£4,600 down to £4,000) and putting the interest rate up (from 19.9% to 29.9%).

i only have promotional rate balance transfers on my card so doesnt worry me. the only point i have issue is they state it will not affect my credit rating. i recon this is not true as my % of used to limit will have obviously increased.

not much help to this but it may be worth adding that point in someplace.


Borgbaiter

[jax007]

Re: Credit Card Rate Jacking - have you been a victim ?

All firms reviewed had processes that were fully compliant with the requirements of the Lending Code and no breaches were identified.

That's all very well but that doesn't really make it ethical does it?

So, basically, as long as they comply with the Lending Code they can increase rates to their hearts content and cause more misery to those already overstretched and struggling to meet their monthly payments.

It is means that, while you are trying your damndest to reduce the capital, these constant rate-jacks mean, in some cases, you will never clear the debt - just pay interest (OK ... and a little off the capital, but not enough to make a difference).

And as for giving people the option to pay off the debt at the current interest rate .... who can do that anyway??? I'm sure everyone would clear their debt if they had the money ... I know I would!

jaxx

[MIKE770]

Re: Credit Card Rate Jacking - have you been a victim ?

This fraud at its worst, We need legislation to limit % as per agreement if there is one or within 5% of limited increases, when as now % level by BOE they must reduce +5% above bank rate,