MBNA rate increase

boredofbeingathome

MABLE wrote: »

I have found Virgin/MBNA one of the best card(s) to hold. Never had any problems and they are always offering me promotional rates. Present one 0% for 9 months etc.

Usually when you are being given a high APR it is because that customer is deemed as being very high risk. It may be idea for your son to get a copy of his credit report to see whether anything shown on the report would reflect such a high APR.

I just wanted to reply to this one even though posted a few months ago. We have/ had Virgin and MBNA cards. Always paid on time and they too put interest rates up..in fact i always overpaid mine. Was given the usual guff when we rang up however we were able to pay off the card..and lo and behold a 0% BT rate was offered if we wanted it. We took this on one card and cancelled the other. So basically they are operating a policy where they will just put up interest rates to get more money in. Credit rating wise, i think that depends, i honestly think the company are operating policies whereby the left hand doesn't know what the right hand was doing.

Paulgonnabedebtfree

I've read through a chunk of this thread. I'm just so glad that I had somewhere to transfer too (on LOB deals) when MBNA started to get even greedier than usual. I still have a few of their cards - all with zero balances. I keep hold of them in case I need a short term low or zero interest deal. That's unlikely to happen unless I get a big repair bill for my van. I'm not borrowing anything else unless it's a real genuine emergency such as needing to get my van on the road to earn money.
If I typed my opinion of MBNA, this post would be pulled.

sc1905

They did the same to me, 21.9% to 34.9%. They are not interested in helping or doing anything. What can I do.

eyeopener2

I haven't read all this thread but the same thing happened to me.

I decided to write to them saying things like "unfair" and "harsh" and "family hardship". it was a shot in the dark, to be honest, but they did reduce the rate back to 15.9%.

It's worth writing to them, you never know what the response will be.

mymoan

It is my belief that MBNA are a) trying to take advantage of high balance but good payers by hiking rates and b) use the backup strategy of hounding those who cannot afford the hikes from their affiliated loan company (Loans UK) call centres, trying to get your unsecured credit secured on property (remember your contract was for unsecured credit).

The MBNA attempts to hike rates by such magnitude are in my view and abuse of contract terms and unfair. I am a victim of this myself but I immediately took the following action:

1) I recorded the initial conversation where I complained to MBNA about the hike and asked for a justification (I had a good payment record) which was given as you "signed a contract agreeing to variable rate". I gave them the option to reduce the rate or accept the fact that I simply would not pay the hiked rate. - on this occasion they did not agree to reducing the rate back down. I refused to be passed to their department which handles people who can't afford the payments (This works as a kind of cover up for MBNA) simply because I could afford the original payments and I wanted it on record that I had refused to pay on the principle of unfair abuse of contract terms. I immediately cancelled all my direct debits as a precaution.

2) With a lack of response from MBNA or arrangement in place it was apparent that by keeping to my original payment amounts it was all being taken as interest. My next step was to actually stop paying MBNA altogether and send them a letter citing my complaint in detail and stating that I had withdrawn my custom and now considered the contract null and void. I agreed to pay only the balances but could make no further payments while they will be taken as interest. I also asked for the procedure for obtaining my personal information audio transcripts and original contracts.

3) MBNA investigated my formal complaint and naturally patted themselves on the back for being so fair and wonderful!!.

4) I responded to their letter stating it did not contain anything that changed my position and that I was requesting all my personal information including call transcripts and original contracts to be sent to me using the procedure they had provided.

5) When (IF) they arrive I will now investigating my contracts in depth and I will work out a fair and reasonable amount to pay them but NO further interest will be paid. - I have paid MBNA something like 40,000 pounds in interest and have been a good customer for 10 years. This is the way they treat you and whatever anyone says in this thread, it is definitely an unfair abuse of the term variable rate. I have already challenged a previous Payment protection insurance scam they were perpetrating and got a large chunk refunded when they realised they were wrong. They still owe me hundreds of pounds in PPI which I hadn't agreed to. They still don't print the APR on your statements and they do vary your rate at times without actually telling you. You cant tell easily because your statement doesn't show the APR. A 0.5% on your monthly interest (shown in very small print on the last page of your statement is a significant APR hike of 6 or 7 % and you wouldn't notice it. I advise anyone to check what rate they are actually on because they may be surprised. - My view is MBNA are a totally self serving unethical business and they're USA based tactics will not work in the UK because we are the worlds biggest moaners and wont stand for it. They'd be far better reducing interest and increasing minimum payment amounts to help people pay back their balances without any hardship issues. These tactics will ultimately backfire as thousands will be forced to default. If you want to know how I get on, I am publishing my progress at mymoan.com.

MBNA should realise that the majority of good payers took balances that they knew they could afford the repayments. If MBNA move the goalposts by this margin then they must be prepared to face the backlash. I encourage everyone who has been hit by this, or any other MBNA unfair practices such as unexpected charges / PPI you didn't ask for / PPI you couldn't remove etc. to write to Chester with a formal complaint and also to Chester OFT. If you are really daring, refuse to pay anything other than the balance once they have abused your contract. (This is not advice - you have to work this out for yourselves.)

Technically speaking, one side of an open ended contract cannot vary the terms willy nilly without you having the right to withdraw if they are unfair or unreasonable terms.

Moderators: I'm sorry this is long but please publish in full if poss.

Paul_Herring

You appear to be confusing "good payers," with "extremely profitable customers."

Good payers don't carry a rolling balance, and thus aren't liable for any interest regardless of the rate.

And residual interest isn't unfair. It's a function of how all credit cards function if you have a rolling balance.

mymoan

Many thanks for your comments Paul. I have to disagree I'm afraid but I accept that you are entitled to your opinion.

Both types of customer are 'good payers' provided they keep within their agreed terms. You cannot assume those who maintain a balance and elect to pay interest to be bad payers as this is also a legitimate way to operate a credit card and is actively encouraged by credit card companies.

Where the "rolling" or "maintained balance" customer is penalised is when the credit card company extortionately and unilaterally increases its APR to a rate well beyond the published rate for the card, in one single month, and in many cases more than doubling the customers payments without having any additional benefit to the customers balance. This rate hike not being aligned with the variable base rate or any identifiable metric, yet the published rate for the card remains unaffected.

I understand that customers who maintain a balance are highly profitable customers to the card company and this is why credit card companies encourage this kind of borrowing. My point is that if card companies are to encourage "affordable" maintained balance accounts, and then hike rates to just to profit further (and you've already stated how profitable these customers are under normal terms) they risk making accounts unaffordable and therefore they must also accept the consequences of doing so.

You'll also note from my post I have suggested an ethical approach that credit card companies could easily take to mitigate their risk and recover their debtor assets without causing the kind of chaos that we have already seen with sub prime mortgage situation - this being: "They'd be far better reducing interest and increasing minimum payment amounts to help people pay back their balances without any hardship issues."

This of course is the ethical and long term approach which should be being enforced by the FSA and OFT. And this blatant profiteering should be outlawed.

Regarding residual interest, I was referring to an issue which has been highlighted elsewhere where MBNA would charge large amounts of interest when people were settling and closing their account at the very end of their discounted interest rate period.. These people being led to believe they could safely settle at the very end of their period without penalty.

This coupled with other issues for which I have evidence and an ongoing case include taking excessive and unauthorised PPI, and raising interest rates subtly during the contract without prior notification.

On this basis I will not accept that MBNA are in any way operating in an acceptable manner or that somehow customers are to blame for a predicament forced upon them.

mymoan

Follow up...

Looks like we getting a result after all in today's news....

Gordon Brown Speaks out against credit card companies

Paul_Herring

mymoan wrote: »

Regarding residual interest, I was referring to an issue which has been highlighted elsewhere where MBNA would charge large amounts of interest when people were settling and closing their account at the very end of their discounted interest rate period.. These people being led to believe they could safely settle at the very end of their period without penalty.

If you're talking about the 0% offers, then people can settle at the end of the period without penalty. People get charged in this situation where they don't read the T&C's and start assuming that the discount period coincides with a statement/payment date when it doesn't.

Ignorance is not an excuse to accuse the company of unfair practices.

mymoan

I cannot comment on 0% transfers. I have not been involved in a case. My campaign is primarily regrading interest rate hikes along with much of this thread and on which I can comment in depth, but I am also involved in issues relating to PPI and some other unscrupulous behaviour. But my original post did not bring an issue regarding 0% transfers and I guess you are trying to create a distraction from my points raised. I actually recommended that people file a formal complaint if they are unhappy about anything and cited examples from this forum. I quote: "I encourage everyone who has been hit by this, or any other MBNA unfair practices such as residual interest / PPI you didn't ask for / PPI you couldn't remove etc. to write to Chester with a formal complaint and also to Chester OFT." I will stand by that statement. It's far more effective than posting in forums alone.

I'm gathering that you think credit card companies are squeaky clean and their actions are totally justified. Of course you are entitled to that opinion but it does rather put you in the minority. In the meantime the fact that there is a strong sway of empathy at all levels with our case, and now including Gordon Brown, implies that there is probably a case to answer.