MBNA is really taking the mickey with their CC interest rise! What are our rights?

Firsttimebuyer_4 · 13 December 2007 at 5:25PM

I have, as many otheres, received a letter from MBNA saying they are increasing my interest rate. Mine has gone up from 14.9% to a whooping 29.9%..Thats DOUBLE what I had. I

Unfortunately, I have a lot of debt and won't be accepted for another credit card (not even going to try. My credit history is ok with no missing payments at all...ever.....but I have a lot of debt which is why I won't get one.

I had my budget all sorted out and was planning to repay £140 per month on my MBNA card. My balance is £4800 and if i kept it at that payment per month I would clear the card in September 2011 and would have paid £1431 in interest.

£140 is my limit and I cant pay more than that...Now with this ridicolous increase i have calculated that i will clear the card in September 2014 and would have paid a whooping £6246 in interest!!!!! That is ridicolous!

It has made me really angry...I did phone up and asked for it to be reduced but was told that it was due to an "account review......" and there was nothing they could do.... I have now written a letter which I will send to them.

I know there are many in my situation and where MBNA have almost doubled the interest rate. I think this is outrageous and should not go by without us shouting out about it!! Martin, if you're reading this.....it would be great to get your view on this...From a legal standpoint they are contractually allowed to do this...But it cripples a lot of people who are already struggling with payments.

guynextdoor82 · 13 December 2007 at 5:43PM

Firsttimebuyer wrote: »

I have, as many otheres, received a letter from MBNA saying they are increasing my interest rate. Mine has gone up from 14.9% to a whooping 29.9%..Thats DOUBLE what I had. I

Unfortunately, I have a lot of debt and won't be accepted for another credit card (not even going to try. My credit history is ok with no missing payments at all...ever.....but I have a lot of debt which is why I won't get one.

I had my budget all sorted out and was planning to repay £140 per month on my MBNA card. My balance is £4800 and if i kept it at that payment per month I would clear the card in September 2011 and would have paid £1431 in interest.

£140 is my limit and I cant pay more than that...Now with this ridicolous increase i have calculated that i will clear the card in September 2014 and would have paid a whooping £6246 in interest!!!!! That is ridicolous!

It has made me really angry...I did phone up and asked for it to be reduced but was told that it was due to an "account review......" and there was nothing they could do.... I have now written a letter which I will send to them.

I know there are many in my situation and where MBNA have almost doubled the interest rate. I think this is outrageous and should not go by without us shouting out about it!! Martin, if you're reading this.....it would be great to get your view on this...From a legal standpoint they are contractually allowed to do this...But it cripples a lot of people who are already struggling with payments.

totally believe you...in my case they suspended my account without warning !!!
idiots ! i repayed by balance and closed my account

System · 13 December 2007 at 6:35PM

I can beat that, My rate went from 14.9 to 34.9%

Can't believe it. I will be dumping them asap, good job my limit isnt that high!

Rafter · 13 December 2007 at 7:18PM

I think MBNA, like many other regulated firms, have to comply with 'Treating Customers Fairly' provisions laid down by the FSA.

Doubling your interest rate when you have a perfect payment history giving them no justification for such a hike seems unfair in my view.

I would write to them making a formal complaint and saying that unless you receive a reasonable explanation as to why the increase in your rate is fair, that you wish the matter to be referred to the Financial Ombudsman service for resolution in due course.

You cannot go straight to the ombudsman without giving MBNA a chance to resolve your complaint. However, as each Ombusdman complaint costs MBNA a lot they might back down and restore your rate.

Good luck

R.

jamalfatty · 13 December 2007 at 8:38PM

Rafter wrote: »

I think MBNA, like many other regulated firms, have to comply with 'Treating Customers Fairly' provisions laid down by the FSA.
................
However, as each Ombusdman complaint costs MBNA a lot they might back down and restore your rate.

Good luck

R.

Risk based repricing of an account happens and is not against TCF so doubt you would get very far, and the complaints only cost the financial institution money if the ombudsman deems them to be a valid complaint - as you have a variable rate credit card then in this case you dont have cause for complaint thus would not cost them anything

Firsttimebuyer_4 · 13 December 2007 at 9:36PM

jamalfatty wrote: »

... as you have a variable rate credit card then in this case you dont have cause for complaint thus would not cost them anything

Let me get this right.... If MBNA wanted to they could put my APR up to 350% and claim it was due to a "account review" and because I have a variable rate credit card??

Surely there must be a limit to how much they can increase it? It is beyond reason that they can just increase it with however much they want to?

YorkshireBoy · 13 December 2007 at 9:49PM

Firsttimebuyer wrote: »

Surely there must be a limit to how much they can increase it?

I assume any reasonable limit could be set (I use the term loosely) at 'arbitration' by the FOS.

I normally agree with most of jamalfatty's postings, but disagree on this one.

If there have been no major changes in the account management, then I believe MBNA should be forced to explain their 'pricing' to the FOS in response to your complaint.

Dylanwing · 13 December 2007 at 10:09PM

I normally disagree with Jamal, but this time I agree. I think that the FOS cannot intervene in disputes regarding lending decisions - You'll find it buried in the T&C's that they can review the limit and rate in accordance with info. on credit file. 34.9% is doubtless one of their standard rates, so they will justify it. Might be worth calling the FOS, just in case though.
It is a pretty sihtty thing to do, and I would keep hassling them, in writing, and request all replies in writing. Not sure if it will do any good, but the more people who write, the more of their time it wastes.

benf90 · 14 December 2007 at 3:31AM

jamalfatty wrote: »

the complaints only cost the financial institution money if the ombudsman deems them to be a valid complaint

Is there anywhere you can direct me to that will confirm this? It goes against what I was told when I worked for a bank a few years ago.

From my understanding the cost of a complaint going to the FOS (which I believe is around £300ish for each referral) is charged to the financial institution regardless of the outcome. I don't think the banks would really be happy with the FOS not getting paid unless a complaint was upheld - it would make them bias in the customers favour.

Or do you mean that each complaint is initially 'vetted' to see if it's something they can actually look into in more detail?

p1an0player · 14 December 2007 at 6:35AM

I think he means the latter ie valid complaint not a complaint that will be upheld

http://www.financial-ombudsman.org.uk/faq/answers/complaints_a2.html

Whether we can help with your own particular complaint will depend on:

whether the business you are complaining about is one that we cover;
what the complaint is about (there are some restrictions on the types of dispute we can look at);
when the event you are complaining about took place (time limits apply if you leave it too late to complain); and
your relationship with the business you are complaining about (for example, we will not always look at disputes between businesses, or where you are not an actual customer).

The legislation and rules that set out officially what complaints we can and cannot look at (our "jurisdiction") are very complex.

Smirch_This · 14 December 2007 at 10:40AM

I managed to get away with an agreement of 11.9% after shouting at them on the phone because the rate was so bad (29.9%) causing the balance was going down by approximately £2 a month. Seemed to work. It's costing me £114 a month though.

They bend if you shout at them enough. Be rude, refuse to pay, tell them you're being screwed etc. Be forceful!

MBNA is really taking the mickey with their CC interest rise! What are our rights?

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