Should I pay this unexpected credit card interest?

redmower3

Apols in advance if I've posted in the wrong place but...

Applied for a credit card in 2007 with a six month 0% interest period.
Kept to terms and conditions by not exceeding credit limit and paying the minimum payment on time each month.

I was aware that the interest free period would end some time around March/April 2008.

The statement dated 10th March showed this key data from which I presumed I had another month interest free…

balance at 10/03/08 £7,800
minimum payment £196 due by 4th April 2008
interest
…current purchase rate 0.00%
…estimated interest on next statement £0.00

The statement dated 9th April showed that I had in fact been charged £101 interest on 9th April.

I immediately cleared the outstanding balance less the disputed interest.

On 11th April I phoned their call centre. The representative did not know why interest had been charged and that her supervisor would call me back. In spite of me making two more calls the supervisor never called back.

On 16th April I complained in writing and added that they should not accept my early repayment of the debt as any admission on my part that I accepted the interest charge as being valid.

On 16th May I emailed requesting a response to my letter of 16th April and received an email reply that the case was being investigated.

On 13th August I wrote again saying that I now regarded the account closed with me owing nothing as they had not responded after 4 months.

On 11th September I finally received a phone call from them stating that the interest free period expired on 1st March. (This strikes me as a curious date being in the middle of the statement period) I suggested that if that was the case then why did a statement dated 10th March (some 9 days later) show “current purchase rate 0.00%, …estimated interest on next statement £0.00” I was advised that this was a computer error. I suggested that this was their problem not mine and I took the estimated interest of zero clearly shown on the statement at face value. I was offered a credit of £50 as a goodwill gesture. I asked whether the ‘late payment fees’ and other penalties that had taken the balance from £100 to nearly £200 would also be waived seeing as it had taken 5 months for them to actually contact me. The answer being a resolute ‘no’

I then started a formal complaint with the company and received their final response on 16th October which managed to completely miss the point of my complaint…

They wrote….Our understanding of your complaint…I understand you are unhappy with being offered a gesture of goodwill of the sum of £50 regarding your request for a full refund of interest charges of £101 that have accrued on your account.

No!!! My complaint is that according to your statement I should not have accrued charges in the first place and it should not have taken six months to resolve.

So..to the good people of MSE…am I right and should now take this up with the Ombudsman or should I accept that I did not pay in full in time and that the interest charge is correct?

Mick

dazza.mk

Your 6 month interest free period would have been from account opening, this doesn't correspond to 6 monthly statements.

As such it is a little underhand, but the interest charge would be perfectly valid, if you search this board you'll find a lot of people who have fallen for the same loophole.

redmower3

dazza..thank you for your reply

I am at a loss as to how the promotion end date can be anything than other than the statement date, however...

If the promotion ended on 1st March and the statement was dated 10th March why did the 'estimated interest for next month' show as zero? when the correct amount could easily have been calculated and displayed.

The company has to date been unable to give a satisfactory answer, but clearly I based my repayment strategy on this and would appear to have been penalised for doing so.

scootw1

I would take the two statements along to the CAB and ask them about it. It sounds to me as if the CC company are totally wrong and should refund you the charges

benf90

Which credit card company is it?

Promotional rates can end on various dates depending on the company. Some quote a specific date, usually the 1st of a month, and with others the date will depend on when the account was opened or a balance transfered.

Did you do any balance transfers on the card? The information you've given so far only relates to purchases.

I'd have thought that if the 0% period expired on 1st March then there should have been interest applied on the 10th March statement.

If my memory is right then credit card companies should give a minimum of 30 days' notice of when any introductory offers are due to expire.

This usually means that there's a notice on 1 of the preceding statements, usually 2 months before.

So let's say interest is due to be charged from 1st March, you'll usually be notified on the 10th January statement.

You should also check your T&Cs as that will state when any 0% offers will expire.

You can take this to the Ombudsman if you like, as you've got their final decision + the timescale of 8 weeks has been passed. But, the credit card company may argue that the estimated interest figure is just that, an estimate. The actual amount applied can change.

You won't have to pay anything to go to the Ombudsman, so in that respect it won't cost you anything. But I'm not sure what would happen to the offer of £50 though, if the Ombudsman sided with the credit card company.

Hillfly

Stick to your guns or you'll always regret it if you don't pursue it to the full.

nomoneytoday

It said estimated charges on the earlier bill. The real interest was higher.
To argue the interest amount is in my opinion a real point for discussion. However, until resolved IMHO you should have paid the minimum payment, and are responsible for any additional charges..

scootw1

nomoneytoday wrote: »

It said estimated charges on the earlier bill. The real interest was higher.
To argue the interest amount is in my opinion a real point for discussion. However, until resolved IMHO you should have paid the minimum payment, and are responsible for any additional charges..

You should not have to pay any money from your own money on interest which should not have been there in the first place. Why should the CC company have your money?

redmower3

scoot...that's where I have been this morning..unfortunately so were dozens of other people, so wasn't seen today..was advised to be at the front door about an hour before the place opens!!

bef90...the card concerned is Skycard, no balance transfers, no cash advances just purchases.

I'd have thought that if the 0% period expired on 1st March then there should have been interest applied on the 10th March statement.

I would have thought this too and is the basis of my complaint to Skycard.

But, the credit card company may argue that the estimated interest figure is just that, an estimate.

I agree an estimate is just that, however from the information they provide it is easy to calulate the estimate for yourself. The estimates on the subsequent bills have been 100% accurate. However there is a big difference between zero and £100

You should also check your T&Cs as that will state when any 0% offers will expire.

Agreed, unfortunately I was in the middle of a house move and the relevant paperwork was not to hand. Irrespective of the actual end of promotion date I saw a figure of 'estimated interest = zero' just like it had been for all previous statements and assumed, not unreasonably imo that zero meant zero and the promotion period had not expired.


nomoneytoday...

However, until resolved IMHO you should have paid the minimum payment, and are responsible for any additional charges..

With the benefit of hindsight I am inclined to agree with this. However, back on 11th April I believed that a quick phone call would resolve the problem. It has taken several phone calls, emails and letters to finally get to talk to someone mid Sept. I think it will be in my best interest to start making minimum payments in order to eliminate these £12 late payment fees while this fiasco drags on.

...

I have just opened a case with the Ombudsman and will get myself in the q at the CAB asap

cheers

Mick

redmower3

scootw1 wrote: »

You should not have to pay any money from your own money on interest which should not have been there in the first place. Why should the CC company have your money?

I definately agree that I should not be making payments on amounts that I do not accept. It is not my fault that Skycard has taken 5 months to reply.

However, now they have replied, it might be prudent to pay a few pennies in order to avoid paying pounds in the event I lose my case.

Mick

exel1966

Your posts above are not clear in that they don't give the neccessary detail for anybody to give correct advice or to infact tell whether the company have charged you mistakenly. From what I've read, it seems SKY have no case to answer to to you or the FOS and you are the one who is in error here. Not what you want to hear, but unless you elaborate ................

When exactly did you apply for the card ?
What is the date on your acceptance letter ?
What date did you receive the card or BT to the card ?
You mentions purchases only at 0% - What about BT's ?
Did you have different 0% periods ?
On what exact date did interest start accruing on the account ?
In your accounts above you have 'presumed' and 'assumed' - Did you not think to check ?