Late Payment charge

beechville96 · 7 July 2005 at 10:22AM

If anyone suffers from Credit Card late payment problems do what I did and dispute it by telling them the following points:-

Richard Colbey, a barrister from Lamb Chambers, said that the banks' willingness to waive card penalty fees as a "goodwill gesture" and their failure to bring a test case through the courts against a debtor who refused to pay the charges were evidence that the fees were unjustifiable.He said: "Credit card penalty charges are legally unenforce-able because they seek to punish the borrower rather than compensate the bank for any losses that they have suffered as a result of the unauthorised borrowing."

Legal experts say that the charges are unlikely to be enforced by the courts because penalty clauses are legally void unless they reflect the loss that the party enforcing them has suffered.

The Office of Fair Trading has written to all the main credit-card issuers asking them to explain how they calculate fees for customers who exceed their credit limit or pay late.

They believe that many of the charges may be in breach of consumer contract law.

Banks are likely to have to slash the charges or face prosecution.

Legal experts say that under consumer law banks are able to charge customers penalty fees that reflect the cost of the unauthorised borrowing only.

Mr Vickers's letter stated: "We have found that different card issuers use different accounting policies and bases for charging, some of which, on our preliminary analysis, are of questionable validity under the regulations on unfair terms in consumer contracts."

A spokesman for the OFT said it expected the banks to reduce default charges automatically if it found them to be excessive. He added that banks may also have to give consumers clearer information about how the fees are levied.

I argued with the bank that I had no intention of paying the charge and that I would close my account leaving a £25 balance and that if they wished to take me to court for the amount they would be more than welcome!!.Needless to say they waived the fee

satan666wayne · 7 July 2005 at 11:01AM

Maybe a bit OTT if you ask nicely you normaly get a refund.

DilbertJones · 7 July 2005 at 11:08AM

apologise & ask nicely, should normally get a credit

beechville96 · 7 July 2005 at 2:53PM

I appreciate that if you ask nicely first time it happens, then yes they will refund,but if it happens more than once the charge is not refundable

MarkyMarkD · 7 July 2005 at 9:24PM

beechville96 wrote:

I argued with the bank that I had no intention of paying the charge and that I would close my account leaving a £25 balance and that if they wished to take me to court for the amount they would be more than welcome!!.Needless to say they waived the fee

This is all very well, but if you took this action and they refused to back down, you would have a default marked on your credit record which would damage your ability to borrow in future. And all over £25.

SUZYKINS · 12 July 2005 at 9:03AM

Well I have had a problem with MBNA so can anyone suggest anything comstructive that I can do please? I am quite new to this and took MSE advice to become a card tart switching from my Cooperative visa with 12.9% interest to MBNA 0%. Anyway after having 2 months 0% I received Julys statement saying that I had a £25 late fee & a wad of interest which scared me. I rang up the number and 20 minutes later spoke to a girl who told me that they received my payment on the 6th(I sent it on the 1st) so it was late and I would have to pay the fee which annoyed me however she gave me another number to ring to talk about the interest (she said most probably it would be cleared off). After another 20mins I got through to a really snooty chap who just kept saying "its on the back of the statement", he said that he would 'adjust' the interest down to 6.9% but I said that I was on 0%. He explained again that a late payment meant that the 0% interest was 'lost' and that if I wasnt satisfied he could always put it up to 12.9% with a nasty arrogrance in his voice. I told him I was really annoyed that I had been punished 3 times for my mistake; £25 late fee (acceptable but annoying) £63 interest (unacceptable and very annoying) and loss of 0% for the next 6 months (totally p***** off). I accept that I should have realised that my faith in the British postal system would be misplaced but thought for one day (a simple mistake) reason would have won the day and we would have sorted this out with a slapped wrist but instead of 3 strikes & your out its a case of your out here are your 3 strikes from us! I asked the guy if there was somewhere I could complain about this and he just ridiculed me further by saying that there wasnt much point as it would come to his office anyway so not to bother. I said that I would close my account and switch to someone else but that got me nowhere either,is there anything that I can do ? Please help me (without Smart Alex remarks about sending payments earlier), I have thought about changing lenders but will that effect my credit rating ? I hope this also makes people aware of the honey traps card firms make for people but I cant believe MBNA are so inflexable with genuine mistakes. Martin do you have any advice (or any other experts)?

YorkshireBoy · 12 July 2005 at 11:40AM

It's hard to give you any advice here without sounding like a "smart alec", but...

SUZYKINS wrote:

...they received my payment on the 6th(I sent it on the 1st)

You only allowed 3/4 working days for both postage and cheque clearance?

SUZYKINS wrote:

? I am quite new to this and took MSE advice to become a card tart

Unfortunately, it appears you didn't heed the advice given in Martin's balance transfer article...

"Interest-free doesn’t mean nothing to repay

All cards have a ‘minimum monthly repayment’ and if you don’t meet this you may be fined and lose any special offer deals. Set up a direct debit even if its just for the minimum repayments as you can always make further repayments each month on top"

SUZYKINS wrote:

Please help me (without Smart Alex remarks about sending payments earlier), I have thought about changing lenders but will that effect my credit rating ?

Your credit rating could already be affected by your late payment.

SUZYKINS wrote:

I hope this also makes people aware of the honey traps card firms make for people but I cant believe MBNA are so inflexable with genuine mistakes. Martin do you have any advice (or any other experts)?

They're not "honeytraps", they're T&C's. If you'd read them, and heeded Martin's advice (above) you wouldn't be in this position now. I'm sorry but, at the risk of being a "smart alec", that's the hard fact of the matter.

Stonk · 12 July 2005 at 11:58AM

Please help me (without Smart Alex remarks about sending payments earlier)

It's impossible to help you. You know precisely what is wrong - you just said it yourself, but prohibited us from doing so.

SUZYKINS · 12 July 2005 at 12:31PM

Thank you for your observation Yorkshire boy but in todays techno world you would expect money transfers to take 3-4 days !! I said I had been punished 3 times so a "nah nah na nah na" attitude is of no help what so ever. Let me be a warning to everone else then so some good can come from it (and not make me feel so bad).

Kazza242 · 12 July 2005 at 12:38PM

Suzykins - You could try writing a letter to MBNA's CC customer services centre. Make sure that your letter is written in a polite tone, because, remember this problem has occurred because of your mistake. There's no point trying to blame them for it. If you point out to them that this is your first and only mistake and that you're genuinely regretful, they will probably erase the charges and possibly the penalties.

If you write them a letter that blames them for excessive charging and the like, then they will simply quote their terms and conditions back to you, which you did agree to when you signed the credit agreement. Doing that, will in no way help your case.

I recall that another MSE member made a mistake similar to yours with MBNA. He created a thread asking for advice. After writing them a letter they did waive the charges and re-instated his 0% offer on the condition that he didn't make any more late payments. Write them a polite letter a.s.a.p and ask a family member or friend to look over it before sending it to them.

YorkshireBoy · 12 July 2005 at 1:34PM

SUZYKINS wrote:

Thank you for your observation Yorkshire boy but in todays techno world you would expect money transfers to take 3-4 days !!

You eluded in your earlier post to the postal system and "sending payment" - which I assumed to be a cheque. Now allowing for 2 days post, 4 working days for the payment to become "cleared" funds, and allowing for a weekend in there, just how exactly did you expect to have made the payment "on time"?

SUZYKINS wrote:

I said I had been punished 3 times so a "nah nah na nah na" attitude is of no help what so ever. Let me be a warning to everone else then so some good can come from it (and not make me feel so bad).

I'm not quite sure how to take this statement

Are you saying that the "nah nah" attitude is mine, or that of MBNA? If your post is directed at me, then I'm wishing now I'd taken Stonk's more blunt approach - and he even got a thank you from you as well!

Anyway, as you point out, others will benefit from your "mishap" and my comments will no doubt reinforce the point.

Finally, got to hand it to you regarding "attitude" - not many people make their first requests for help on here by adding "without Smart Alex remarks". This can (and usually does) limit the number of people willing to put themselves out to try and offer help - or to highlight the reasons for your problem as I've have done.

Late Payment charge

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