Rate Jacking Sucesses/failures

Singlemum_2

I've just had a letter from Virgin telling me they are changing the way they calculate minimum payments. It will nearly double my monthly repayments.

I don't spend on the card and pay at least the mimimum payments on time every month.

I rang up to say I would like to close my account and pay off the balance under the current arrangements but they said no. They said this did not come under the lending code.

Has anybody else had this problem? Do you know if they can do this?

In need of your advice please everyone.

Thanks

robgoingcrazy

NtG wrote: »

Halifax said they were 'jacking' me from 13.9% to 18.95%

Thanks to the letter template that I copied and sent, they have apologised, returned me to my previous rate, returned the excess interest I paid this month and given me £25 for 'inconvenience'.

When I first called to complain, I was given the option of a personal loan which was £80 per month more than the minimum on my account. The letter really had them take a different take on it. I am indebted to you for this advice Martin, many thanks:j

Halifax sent me a letter: 15.94% to 18.45%

Spent ten minutes with foreign call centre, demanded to speak to someone higher up in UK office, eventually was transferred - and refused, refused, refused. Wouldn't give me any more info, other than "market conditions have changed blah blah blah" - I said I have been a loyal insurance and mortgage customer as well for years. She said there is absolutely no way once a review has been done on an account interest rate that it can in anyway be overturned by anyone, not even the chief exec. So told her to stick the card and freeze the interest rate, will be transferring away at earliest opp to 0% card (just need to apply for one first etc).

Just sent several paragraphs direct to chief exec, will report back here if anything happens as a result...

robgoingcrazy

robgoingcrazy wrote: »

Halifax sent me a letter: 15.94% to 18.45%

Spent ten minutes with foreign call centre, demanded to speak to someone higher up in UK office, eventually was transferred - and refused, refused, refused. Wouldn't give me any more info, other than "market conditions have changed blah blah blah" - I said I have been a loyal insurance and mortgage customer as well for years. She said there is absolutely no way once a review has been done on an account interest rate that it can in anyway be overturned by anyone, not even the chief exec. So told her to stick the card and freeze the interest rate, will be transferring away at earliest opp to 0% card (just need to apply for one first etc).

Just sent several paragraphs direct to chief exec, will report back here if anything happens as a result...

FAIL, kind of.

Dealt with person from Chief execs office, who ran an investigation, and in the end acknowledged that contrary to what the initial advisor had said (it could be something to do with my credit rating changing and/or market forces), it was nothing whatsoever to do with my credit rating, just an across the board decision to raise rates (a cash grab in other words?).

At least I ended up getting an explanation and some peace of mind that my 5 star credit rating has not somehow been trashed. Even so, they refused point blank to reverse the decision or give me any special deal, so the card remains closed.

But I did get £25 for my troubles... LOL.

scott_lithgows

OPUS from 19.9% to 24.3%

This is on 6% life of balance,however I told them I was not happy about being rate jacked on principle and asked for it to be reduced.Mentioned I had other 0% deals coming through the door and would they prefer 6% of £500 or 24.3% of zero !

Result ......failure,its all on 6% however the card is not welcome in my wallet.


update 14/4. balance is transferred and card is closed

Terri31

Helly_Welly wrote: »

My Virgin (MBNA Europe Bank) Credit card opened in May 2006 with a rate of 15.9%. After six months it went to 27.5% then within another seven months to a whopping 35.1% On my balance of £6,000 I paid £230 a month off but as the interest was nearly £170 I wasn't getting anywhere. I wrote your template letter and they immediately dropped the rate back down to 15.9% in May 2010 but their final letter said they didn't owe me any interest refund so I wrote to the Ombudsman. They have said that MBNA would rather settle my complaint as an alternative to their investigation. I am getting a refund of £4,300 "overpaid" interest to May 2010 plus £150 compensation. Thank you so much for your help

This and most of the other posts on this long-running thread show the banks have descended even further into the realms of loan sharks! I am shocked - I read it only as a point of interest on reading of the option to close an account to keep an old rate in the face of an increase.

What concerns me are the struggling people who lack the health and energy to chase these firms, writing letters and following each step to obtaining justice. To them I'd say try to telephone or go to a branch of Mind and see if someone can act as advocate for you and help you through the maze they call justice in this jungle they call the market economy. We are the prey and they the predators, and I have rarely seen so much evidence of it in one place.

In fact I'd love to see the whole thread printed off and sent to the Ombudsman and all MP's in a drive to end these shark-like practices once and for all. They are causing too much stress and for many it will be the straw that breaks the camel's back and we all know how much the NHS id already being held back from helping all those who need help in this area.

Tchernych

Yes I was rate jacked by Lloyds credit co. Sent a letter using the
relevant parts of the set letter and that I would be considering referring it to the financial ombudsman etc.
Two days later received a phone call from Lloyds saying that I could
continue with my old interest rates and also able to continue usiing
my card as before..... By his tone of voice I think they are not too happy getting the financial ombudsman involved !! So SUCCESS and thanks to you for invaluable information ..

sandib

I was lettered last month by Virgin say they are changing how they calculate the interest and this has meant another £20 a month on the minimum payment. Phoned them completely unhelpful said i had to wait to this month before they could look at it. Meanwhile mbna and hallifax write to me to say that they are reducing my credit limit. I had a limit on the halifax of £11,000 and a balance of 300 they reduced my credit limit to £500. When i challenged this they said that it was because i wasn't spending on the card. I made a puchase last month! still couldn't offer me a logical explanation. Now i don't want to come across all consipracy theory but could this be so that i can't switch exisitng cards and to stop me spending on the cards. I have tried really hard this year (a) not to spend on the cards and (b) to get the balances down. I find the recent practices of these companies nothing short of disgusting how do they think that by piling more debt on exsisitng debt will help people get out of debt is beyond belief. One of my friends has had a similar experience her credit limit suddenly being cut short. Just know wherby i was managing month to month i am now worried that i won't be able to cope with the minimum payments if they hike them up any more.

sandib

Does anyone know if what Virgin are doing in relation to recalculating the interest in monthly payments is legal and if there is anything we can do?

Thanks

hatecreditcards

Card with Egg for years - online account so didnt notice they had jacked rate - initially on 0% - transfer balance - they jacked to 26.9% when I could least afford it.
Sent email to ask for normal apr to be applied - was refused. Do not use the card just trying to pay it all off at moment.
Cheeky sods sent me a letter to increase my credit limit!
Still paying off as unable to obtain credit card with anyone else at a cheaper rate.
Will never have one again once this is paid off

SteveT.59

Just received a letter from Santander to say that my interest rate on their card is going up from 18.9% to 26.9% - or, as they helpfully explain, by 55p per £100 borrowed.

There's not much of a balance outstanding, but I refused to accept the new limit and asked for the existing rate to remain. I was told the decision came from the underwriters that caused Santander to raise their rates. Sounds a feeble excuse to me.

I had a similar experience with Egg. I explained to them that what they were doing was the economics of the mad house. Many people, like me, had credit loans and had budgeted a certain amount to keep their heads above the water and pay off their debts. A sharp increase in rates would result in more defaults, and ultimately more bad debts for the credit companies.

For me, things came to a head when my main source of income stopped for a while. At the time my credit score was 999. I phoned, explained what had happened, and asked for a reduction in my rate until the problem was resolved. Their response was underwhelming!

Although I wouldn't recommend it, in the end I simply stopped paying my bill but kept on talking with them. Finally I was asked what I could afford to pay, I gave them a figure, and hey-presto! It was accepted.

Meanwhile credit score shot to bits.

I could go on and have a rant. But life's too short!