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Trying to reclaim a small amount of charges on a card that was paid off in 2007. Sent the initail letter but included about OFT guidelines and not accepting a partial refund and got the below reply back after 1 day!!!
Your credit card agreement ("the Agreement") with Egg Banking plc ("Egg") clearly states that charges will be added to your account if you exceed your Credit Limit or fail to make your contractural payments. In accordance with condition 7 of the Agreement, a charge of £20.00 (or since August 2006, a reduced charge of £16.00) has been added to your account each time you exceeded your Credit Limit or failed to make a payment.
Your letter alleges that these charges are a penalty despite having not put forward evidence to support this allegation. The charges set out in the Agreement are a genuine pre-estimate of the loss caused to Egg when a customer breaks the terms of their Agreement.
You may have noted the media coverage of the Office of Fair Trading (OFT) investigation into default charges. The OFT stated that a default charge should only be used to recover certain limited administrative costs. These may include postage and stationary costs,staff costs, a proportionate share of the costs of maintaining premises and IT systems necessary to deal with defaults. The OFT set a threshold for intervention of £12 but stated that default fees should not be equivalent to the threshold.
The OFT ststed that the presumption of unfairness in relation to charges over £12 would not apply where there are exceptional business factors. Thet therefore acknowledged that in those circumstances, a card issuer may be able to set a fair default charge above the £12 threshold.
The OFT, as an example, specifically referred to Egg's practice of requiring all customers to pay the minimum monthly payment by direct debit.
Following the conclusion of the investigation, the OFT indicated that it would not proceed further against Egg on the basis that Egg reduced its charges from £20 to £16. Accordingly, without any admission of liability as to the previous level of charges. Egg reduced its default charges to £16.00. The OFT has taken no further action against Egg.
This reduction does not apply retrospectively; however in your case wea are prepared, without any admission of liability, to apply the reduction to the £20.00 charges.
In this instance we have agreed to refund the charges that have been applied to your account (being £4.00 per default charge applied to your account) plus 8% statutory interest.
What do I do next please?
Your credit card agreement ("the Agreement") with Egg Banking plc ("Egg") clearly states that charges will be added to your account if you exceed your Credit Limit or fail to make your contractural payments. In accordance with condition 7 of the Agreement, a charge of £20.00 (or since August 2006, a reduced charge of £16.00) has been added to your account each time you exceeded your Credit Limit or failed to make a payment.
Your letter alleges that these charges are a penalty despite having not put forward evidence to support this allegation. The charges set out in the Agreement are a genuine pre-estimate of the loss caused to Egg when a customer breaks the terms of their Agreement.
You may have noted the media coverage of the Office of Fair Trading (OFT) investigation into default charges. The OFT stated that a default charge should only be used to recover certain limited administrative costs. These may include postage and stationary costs,staff costs, a proportionate share of the costs of maintaining premises and IT systems necessary to deal with defaults. The OFT set a threshold for intervention of £12 but stated that default fees should not be equivalent to the threshold.
The OFT ststed that the presumption of unfairness in relation to charges over £12 would not apply where there are exceptional business factors. Thet therefore acknowledged that in those circumstances, a card issuer may be able to set a fair default charge above the £12 threshold.
The OFT, as an example, specifically referred to Egg's practice of requiring all customers to pay the minimum monthly payment by direct debit.
Following the conclusion of the investigation, the OFT indicated that it would not proceed further against Egg on the basis that Egg reduced its charges from £20 to £16. Accordingly, without any admission of liability as to the previous level of charges. Egg reduced its default charges to £16.00. The OFT has taken no further action against Egg.
This reduction does not apply retrospectively; however in your case wea are prepared, without any admission of liability, to apply the reduction to the £20.00 charges.
In this instance we have agreed to refund the charges that have been applied to your account (being £4.00 per default charge applied to your account) plus 8% statutory interest.
What do I do next please?
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