Rate Jacking Article Discussion

Cell

Oh and by the way I got a prompt response to a query I sent to Capital One on my secure messaging system. Apparently a written response was sent out on 30th September. I wonder when I'll receive it?

Oh, and having had the Card Industry's interpretation of the 30 days notice I have finally received the following from the government. It backs up what I had already been told. You need the notice in your hand for 30 days. The CC Company, essentially, has to prove that it was sent ON a certain date and furthermore that it was received 30 days before the time limit quoted in that letter.

How frustrating when all they hve to do, for their and their customers' pretection is give a longer period of grace (45 days would sort out all the problems) and the problem evaporates. Unless there is a post strike of course, in which case....well, watch this space eh?

Please accept my apologies for the delay in responding.

In answer to your queries. The principles dictate that the customer needs to receive 30 days notice (whether in writing or any other medium) before the risk-based re-pricing takes effect. This is similar to the broader requirement relating to changes to terms and conditions. Such notice can come electronically, if this is their normal mechanism, but if it's paper, then the credit card company should ensure that the customer receives it at least 30 days before the change is implemented.

If the customer has any concerns that they have not received appropriate notice, they should go back to their credit card company with their concerns and ask them to investigate the circumstances.

If the customer has an unresolved dispute, they can contact the Financial Ombudsman Service.

The principles agreed last year between the industry and Government are enforced and monitored by the Banking Code Standards Board.

I hope this information is helpful.

Your sincerely

sabelu

Sent letters to cc companies a fortnight ago and they have all replied back saying no way the hike stays. So no success

MadgeIris

I called my bank asking about a loan to clear my credit card.
We went through all the questions and they would behappy to lend me money.
My last question was ''what is the APR ?''
A whopping 21% for the loan.
I replied I might as well keep paying my card as its only 17.95%.

Ive been a loyal customer to Halifax Credit Card for 6 years.
In those 6 years my interest rate has been 17.95%.

In July I missed a payment by 4 days, I phoned and apologised and paid immediatly over the phone.

I then recieved a letter telling me that my credit card limit had been reduced by £2,400.

They then jacked up my interest rate 22.95%.

When I phoned to complain I was told that interest rates had been up and down and thats why they had put up my interest rate.
I guess I must have been lucky holding on to the 17.95% for so long.

I did as Martin suggested and called to say I wanted to close my account and that I would make monthly payments till it was all paid.

I was told that I cant close my account till the debt is paid off?

About this time I got another letter from the Halifax suggesting that I could benifit from help from them ( im assuming they are offering me a loan.)

Is this all coincidence?

I know I know I shouldnt have missed a payment ........

I have written registered letters to Halifax I await a reply

Cell

Capital One responded to my letter after a fashion. It took three days, first class.

They are relying on the fact that they sent the letter on 20th July and will not enter into any further correspondence despite their first class letters taking between 3 & 7 days to arrive, thus rendering the notice contrary to their own rules.

I barely have the heart to go on (which they're relying on, I know). It seems the Ombudsman is my only option, and with a turn around of between six and nine months is it worth the hassle in a busy life with an impending redundancy in the family

ramblingtree

Hi Cell,
Sorry you didn't get a good response. We're waiting on the response from virgin, I doubt it will be a good one!
We're going to try the Ombudsman, if you can muster the energy I think its just one form and copies of your letters etc. I know they rely on you to give up, so please don't!! I understand the energy required, and obviously the coping with redundancy comes first, but I hope you find the energy to fight a bit further!
x

savingholmes

We just got stung by rate jacking with capital one - they say they told us in July. We have a life of balance rate and didn't think they could change that. We never noticed anything on the statements. Apparently we should have told them by August if we wanted to keep our rate! Ridiculous!

klint

savingholmes wrote: »

We just got stung by rate jacking with capital one - they say they told us in July. We have a life of balance rate and didn't think they could change that. We never noticed anything on the statements. Apparently we should have told them by August if we wanted to keep our rate! Ridiculous!

That is exactly what I'm fearing with my life of balance rate (see my earlier post).

NickX reassured me:

NickX wrote: »

They cannot increase the rate on a "Life Of Balance" deal provided you remain with the Terms and Conditions.

So I have left the balance as it is, and I am waiting for my next statement to see if I've been stung, or if NickX is right.

NickX

klint wrote: »

So I have left the balance as it is, and I am waiting for my next statement to see if I've been stung, or if NickX is right.

Well, thanks for the vote of confidence in my words.

I fully believe that a Life of Balance deal should be exactly that. An agreed fixed rate of interest on that particular balance that will not alter provided you remain within your Terms and Conditions.

Please bear in mind that any other balances (e.g. additional spending) could be charged differently. Also, if you breach the Terms and Conditions then they may revoke the Life of Balance deal.

Having said all this, mistakes do happen (sometimes accidently, sometimes intentionally) and I am sure there are cases where Life of Balance deals have been overrided. If they do this, then they are breaking their own Terms and Conditions and I would advise that you have a strong case for complaint and if you do not get satisfaction from the provider then you can go to the FOS.

Please do report back how your Life of Balance deal is handled in view of the rate jacking letter that you have received. Thanks

petera74

I have been rate jacked by MBNA!

The problem the average consumer for credit cards is having is simple!
The minimum payment mainly is made up of interest due to the Credit card.So no debt on the card ever gets paid!
For me. I have 3500 pounds of debt on a Virgin MBNA card. In Jan 2008 they changed my interest rate from 15.9% to 29.9%.
So I work out I can only pay about 100 pounds each month. Of which at 29.9% APR. 86 pounds is interest and 14 pounds is off the debt. So in a year of paying 100 a month, 1200 for the year. 1032 pounds is interest and 168 pounds is off the debt.
So in a year at 29.9% APR I would get the debt down to 3332 pounds.
If they left me at 15.9% which I signed up for and spent at that rate.
At paying 100 pounds a month for a year 1200 for the year. I would have paid 528 pounds in interest and 672 pounds of the debt.
So in a year I would at 15.9% APR I would get the debt down to 2828 pounds.
To me at a rate of 15.9% APR I have a chance at clearing the debt.
At 29.9% it is a lot harder to do.
This is were the credit card companys are clever, they know that if they leave the rate at 15.9% then the debt will be cleared at some point. At 29.9% they know that an average consumer will not be able to keep up at 29.9%. Therefore they are keeping money flowing in.
They need to be stopped ASAP with interest rate hikes.
If you go to MBNA credit cards and request all consumers with a debt higher that 3000 pounds, ask them what rate the consumers are on. You will be surpised at how many people are at 20% and over!
I would say 95% of consumers are in the same boat as me.

jimmywx11

No-one ever seems to mention that Credit card companies, also CHARGE sellers about 2%-3% of any purchases AS WELL! These charges are passed on to everyone with increased prices. Even if you had a card that offered free credit (0%) they would still make money from the sellers/retail outlet. The fact no one mentions this is only in the card companies interest.

Egg increased my APR % years ago for no reason except they wanted to. without telling me even though I ALWAYS paid on time... so I refused to pay them on principle. on a £9000 balance. 3 years later after paying a debt collector £50 per month (I tell them I’m on jobseekers so the interest is held. so its at 0 %)the debt is down to almost 7000. eventually I will have paid this off but will have saved thousands in interest. HAHAHAHA. sure I’ll never get credit again but I’m happy about that too. And I hope I contribute towards Eggs, collapse as well.

I think what these card companies are doing is just plain corrupt. That it is allowed to happen, highlights how far the corruption goes. The fact that its mainly the poor, who have to worry about these things is also abhorrent to me. If you are struggling with your finances then they will increase your rate!? DER --- DOES --- NOT --- COMPUTE!!