Three years on - Credit Card Claiming

[Amethyst]

In April 2006 the Office of Fair Trading finally published their report into CREDIT CARD DEFAULT FEES . The OFT stated in internal communications that the fees were considered highly unfair and probably unenforceable on consumers. ( OFT confirms Credit Card Default Fees were HIGHLY UNFAIR under the UTCCR - Legal Beagles

In April 2009 - have things changed ?

The credit card companies may have reduced their headline default fees to around £12 (apart from Egg who get £16 because their customers are lower risk?), is this going far enough ? Are these fees proportional to their costs ?

In 2007 in a court in Northern Ireland credit card provider CitiCards confidentially 'proved' to a Judge their costs to be £8.

Individuals continue to reclaim their historial and current default fees.

What effect has the report had ? In the year before the report their were only 7000 complaints to card providers about overcharging, in 2006 this rose to 28000, however in 2007 this leapt massively to 160,000 complaints, as consumers realised they had been ripped off for years and got their claims into the card providers. ( FSA figures- Credit Card complaints - Legal Beagles )

What proportion of consumers are reclaiming the FULL amount due to them, if, as the OFT stated, the term applying the fees was unenforceable ?

What proportion are happily being fobbed off with the difference between the old £25 odd charges and the OFT's £12 figure ?

Why, if the charges are fair at £12, are the card providers still repaying customers the full amounts, plus the interest charged on the charges, and in some cases adding a contractual rate of interest on top ?

Why are they STILL refusing to take any of the claimants into the court room to have the matter decided ?

Do the OFT need to take the matter to the High Court for a formal declaration of the enforceability of the unfair terms ?

How is the limitations period affected ?

[TANZARELLI]

Re: Three years on - Credit Card Claiming

I even had charges refunded which were outside the limitation period, although I had started the process well before they fell outside of this.

I think the OFT need to re-visit the £12 figure as if I remember rigtly this was only ever to be a tempory fix to bring the market back in line somewhat.

I wouldn't like to see another test case as the credit card providers are still as we both agree, paying out, and to have another test case would more than likely mean more stays and lots of people having to wait for years to get their money back.

I think it's time however for the OFT to have a review of the "Calculating fair default fees in credit card contracts" report of April 2006 to assess the impact its had and also review its effectiveness.

[ROBSTER]

Re: Three years on - Credit Card Claiming

How is the limitations period affected ?

I believe that any submissions made after February 2012 will be subject to time statute i.e. you will only be able to go back 6 years as "a reasonable person" had no idea whatsoever as to how much the actual cost of administering these charges was until the publication of said study in Feb. 2006.

If Citi Card are so confident of their £8 why dont they make it availiable to the general public?

John Fingleton's (Boss of OFT) investigation really opened a tin of worms as there was a light bulb moment for the general public which led to the claiming of Bank charges on the same basis. Mr Fingleton you created a monster..Bless you!

[EXC]

Re: Three years on - Credit Card Claiming

I think the OFT need to re-visit the £12 figure as if I remember rigtly this was only ever to be a tempory fix to bring the market back in line somewhat..

Yes and hopefully the bank charges UTCCR investigation and test case result will provide some kind of cross-over mechanism to credit cards. And it may be that they were counting on that.



March 2006 OFT board meeting minutes:
Item 5 Credit Card default charges

The Board was advised that the OFT will be publishing a statement on default
charges by the end of March, proposing a threshold. Although this approach is
not seen as a permanent or ideal solution (expected to last around 3 years), it should improve the working of the market.

[enaid]

Re: Three years on - Credit Card Claiming

Well would that have fallen in line with the expected outcome of the Test Case?
By that I mean do you think they thought it would all be sorted in the 3 years?

[TANZARELLI]

Re: Three years on - Credit Card Claiming

Well would that have fallen in line with the expected outcome of the Test Case?
By that I mean do you think they thought it would all be sorted in the 3 years?

I wouldn't have thought so enaid. I think it was a given that the banks would want to drag this out as long as possible as its in heir interests to do so, excuse the pun.

[EXC]

Re: Three years on - Credit Card Claiming

Well would that have fallen in line with the expected outcome of the Test Case?
By that I mean do you think they thought it would all be sorted in the 3 years?

Yes i think they put the credit card investigation on hold by slapping the £12 cap in it as at that point bank charges were becoming a major issue. I also think that at that point they thought it would take about 3 years to sort bank charges.

I always thought - and still do - that they made a big mistake in the title of their credit card report ''Calculating Fair Default Charges In Credit Card Contracts''.

The report had nothing to do with fairness and neither did it contain any calculations. But unless you read the report you'd assume by the title that the £12 headline figure was 'fair'. It also gave the green light to cc providers to mislead complainants into thinking that the OFT had concluded that their £12 charge was fair.

I did take it up with them.

[TANZARELLI]

Re: Three years on - Credit Card Claiming

I see what your saying EXC, but to be honest I don't think they were that forward thinking as the bank charges campaign was only just starting to gain momentum when the OFT credit card report was published and I would have thought that they would have been working on it for some time prior to its publication.

I don't think that the test case would even have been considered at this point so doubt very much they would have thought the issue would have been resolved within this period.

I agree that the title of the report is mis-leading but we all know that £12 is not a figure suggested by the OFT that Credit Card providers should reduce their fees to, only that it would not take action if charges were at this level or below. They also said that a court may not agree them to be fair if set at this level.

[Amethyst]

Re: Three years on - Credit Card Claiming

Are we going to ask the OFT what they are doing now the 3 years is up?

[natweststaffmember]

Re: Three years on - Credit Card Claiming

Are we going to ask the OFT what they are doing now the 3 years is up?

Time for an email I think.

[Amethyst]

Re: Three years on - Credit Card Claiming

In April 2006 the average purchase rate on a credit card was 14.9%; today this has jumped to 17.6%

[TANZARELLI]

Re: Three years on - Credit Card Claiming

I think its worth asking otherwise like a lot of tempory things that seem to become policy without anyone having a say in the matter, this could stay the norm.
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I don't mind firing off an email from PAG also, perhaps if they see that a few group are wanting to know they may decide to re-visit the report. Let me know if you have some suggested wording and I will tweak to suit/alter slightly. Otherwise will knock up something myself when I get some time.

[EXC]

Re: Three years on - Credit Card Claiming

I think its worth asking otherwise like a lot of tempory things that seem to become policy without anyone having a say in the matter, this could stay the norm.
------------------------------- merged -------------------------------
I don't mind firing off an email from PAG also, perhaps if they see that a few group are wanting to know they may decide to re-visit the report. Let me know if you have some suggested wording and I will tweak to suit/alter slightly. Otherwise will know up something myself when I get some time.

That would be great Tanz. We're doing a few things too but the more the merrier.

[TANZARELLI]

Re: Three years on - Credit Card Claiming

That would be great Tanz. We're doing a few things too but the more the merrier.

No worries mate, do you have an email?

[EXC]

Re: Three years on - Credit Card Claiming

This one Tanz Retail Banking Team

In April 2006 the average purchase rate on a credit card was 14.9%; today this has jumped to 17.6%

http://www.thisismoney.co.uk/credit-...2&in_page_id=9