Amex £25 failed direct debit charge illegal?

ajbaker

In December I over estimated the money in my current account and as such a direct debit from there to my Amex credit card failed. As a result the Halifax charged me £39 and Amex £25. After a heated but polite conversation with the Halifax they agreed to refund the charge as a 'goodwill gesture.' Unfortunately American Express have not been so forthcoming.

I have been following the Bank charges - illegal?' thread for some time and wonder if I should complain to American Express, quoting the Unfair Contracts Act. Has anyone else done something similar? Is £25 too little amount for it to be a worthy claim?

grumbler

I hope you don't have big balance on your card or pay the full balance every month ...

16.2 We can end this Agreement at any time by giving immediate notice to you but unless there are exceptional circumstances we will give you 30 days’ notice. If we end this Agreement you must pay all money you owe on the Account, and all money you owe not yet debited to your Account.

Or this part of the contract is unfair too?

nomoneytoday

It's up to Amex. I would chalk it to experience, you could have been £64 out of pocket instead of £25.

ajbaker

Very different responses to those on the other forum.

As it happens I do not have a large balance and ALWAYS pay my card off in full each month. I am very conscientious with money, and this was just an unfortunate mistake where I forgot about one last direct debit towards the end of the month. Therefore I am happy for them to end the contract and am considering doing so myself anyway as a result of this experience. I find your question "Or is this part of the contract unfair too?" insulting - not only may it be illegal (see a post on the thread linked above) but it is typical of the heavy handed threats you receive from large companies.

As to whether it is up to Amex, that's just the point. Punitive charges are illegal, and I consider £25 for the provision of one letter disproportiante to their expenses. Therefore it is not necessarily up to Amex, rather consumers allow them to operate in such a way without question.

grumbler

ajbaker wrote:

Very different responses to those on the other forum

IMO it is a pity that that board is being hijacked by some group of members that don't know other words besides 'illegal' and 'punitive'. Even their main inspirer admits this:

dchurch24 wrote:

...I started the www.bankactiongroup.com forum - to specialise in that subject and to let this forum be about moneysaving, not money-gettingback.

ajbaker wrote:

....not only may it be illegal ... Punitive charges are illegal ... disproportiante to their expenses.

It always astonish me, why do people pull out all this legal slang only when they get hit by charges and not when they are signing the agreement ...

Bokken_2

ajbaker wrote:

I am very conscientious with money, and this was just an unfortunate mistake where I forgot about one last direct debit towards the end of the month. .

But you forgot this payment and as such recieved a fine.You need to be more conscientious or you'll be picking up fines every month.

ajbaker wrote:

As to whether it is up to Amex, that's just the point. Punitive charges are illegal, and I consider £25 for the provision of one letter disproportiante to their expenses. Therefore it is not necessarily up to Amex, rather consumers allow them to operate in such a way without question.

Sounds good,so I take it you will be getting your money back from Amex before you close your account.
Or are you going to use the grey stuff between your ears and take them for an extra 3mths @0%

ajbaker

grumbler wrote:

It always astonish me, why do people pull out all this legal slang only when they get hit by charges and not when they are signing the agreement ...

It is impossible to open a bank account/credit card account without agreeing to their contract; there is no provision to negotiate the contract on an individual basis. Which is why I believe the Unfair Terms legislation exists - to protect consumers when they have become bound by a contract that could not negotiate individually. Your statement assumes every contract created by a bank is legal and fair; I am sure at times a bank has got it wrong, and there is a strong suggestion that in terms of charges, they do have it wrong.

I am not an expert, and that is why I am looking for advice from members of this board who may or may not be experts.

Very few people will question or criticise any contract if it does not effect them - does that make the contract fair for another?

Bokken wrote:

But you forgot this payment and as such recieved a fine.You need to be more conscientious or you'll be picking up fines every month.

That is the whole point. It was a fine. There is a strong suggestion that it is not legal or fair to fine someone for a breach of contract, beyond the expenses encountered.

muffle_2

The OFT is currently looking into the late payment charge scam, you will need to await their ruling on this for the definitive answer. If they do rule them illegal then you may have a basis for a retrospective claim.

The £39 charge by Halifax is astonishing, the highest I've ever had is £30. These failed DD charges are why I no longer use DDs for anything more than say £30, as there is always the risk that the account won't have enough funds.

Usually you can negotiate a refund of these charges, only once had I failed to get a refund and in this case they refunded half the charges, which still left me with over £80 in charges simply for being 1 day late.

You'd think with Amex's high charges (merchant fees are twice as high as Visa and Mastercard) they could afford such a good will gesture.

ajbaker

Since the Office of Fair Trading recently stated publicly that they believed charges over £12 to be legally unenforceable I decided it was time for another letter to Amex. One day after receiving the letter I received a call from their executive office stating they had refunded the £25 charge.

I am usually very tolerant of peoples opinions on public forums, but I was thoroughly shocked by peoples opinions in this thread.

To nomoneytoday

It's up to Amex. I would chalk it to experience, you could have been £64 out of pocket instead of £25.

That's just the point. It is not up to Amex if it is legally unenforceable. I hope this will prompt other people to reclaim extortionate charges.

To Bokken

But you forgot this payment and as such recieved a fine.You need to be more conscientious or you'll be picking up fines every month.
ounds good,so I take it you will be getting your money back from Amex before you close your account.
Or are you going to use the grey stuff between your ears and take them for an extra 3mths @0%

Your question of my intelligence is mildly insulting. I am still with Amex and will receive a reasonable cashback sum in a few months time. That's why I had the card in the first place. It is the first time I have received a 'fine' in 6 years, so you cannot claim I am not careful with my money.

To grumbler

IMO it is a pity that that board is being hijacked by some group of members that don't know other words besides 'illegal' and 'punitive'.

Why is it wrong to use words such as illegal and punitive when they are infact just that. Even the OFT has said as much. I do believe people should be more careful with their money, and begin to question why people have received hundreds or thousands of pounds in late-payment charges. For such as myself who has received one penalty I believe I am right to stand up for my rights.

We live in a time where litigation has gone mad, and criminals avoid any punishment because 'punishment' is a breach of their human rights. Perhaps I was just making it worse... Or perhaps it is about time individuals stood up against big corporations.

Bokken_2

ajbaker wrote:

Since the Office of Fair Trading recently stated publicly that they believed charges over £12 to be legally unenforceable I decided it was time for another letter to Amex. One day after receiving the letter I received a call from their executive office stating they had refunded the £25 charge.

To Bokken

Your question of my intelligence is mildly insulting. I am still with Amex and will receive a reasonable cashback sum in a few months time. That's why I had the card in the first place. It is the first time I have received a 'fine' in 6 years, so you cannot claim I am not careful with my money.

No it is not mildly insulting.
It was a subtle "kick up the !!!!!!".
There are a fair few people who come on to these pages whinging and whining and then do nothing about the problem they are moaning about.
My comments were made to see if you would moan some more or take some positive action.
I am pleased to see the end result is that your charges have been refunded.
So you did use the grey matter and worked through this problem to your advantage.
Now you are good and angry how are you going to extract some extra cash out of the Halifax and Amex to your advantage?
That is what the real challenge is all about.
good luck

The_Boss

ajbaker wrote:

Very different responses to those on the other forum.

Very different because other forums are full of regular late payers who slap each other on the back and congratulate people for being unorganised with their finances. Whats more, they show no shame in admitting how bad they are.

Its funny that people jump up and down and scream "disproportionate punitive fees" (etc), yet they dont do so when they are transfering their balance or buying their new sofa. If there is a time to contest this term in the contract, I'd have thought that it was at the start of the agreement. But nobody is complaining while it suits them and only when they have been crap with their money. So why arent these people up in arms at the start of the agreement about how unfair it is? Pretty pathetic really.