Egg - Their £6 response to my claim.

FatratUK

Hi all,

I sent a letter off about a week ago to Egg to reclaim around £228 of charges (plus interest) and they have responded with an offer of £5.79.

Their reasoning for this is that they say they will only pay for one charge i had ages which was £20, but not for all the other charges, which were £16 a time. They say this is because the £16 charges are justified by things the OFT have said about companies charging above £12 if they use Direct Debits or some such. It all sounds a little off to me.

I have been reading the reclaiming guide and other things and i was under the impression that the bank's ruling from December/January and most of what the OFT said about claims, didn't apply to credit card claims?

Should i continue and threaten court action, before taking it to the Ombudsman, if it is not resolved by then?

Thanks.

natweststaffmember

FatratUK wrote: »

Hi all,

I sent a letter off about a week ago to Egg to reclaim around £228 of charges (plus interest) and they have responded with an offer of £5.79.

Their reasoning for this is that they say they will only pay for one charge i had ages which was £20, but not for all the other charges, which were £16 a time. They say this is because the £16 charges are justified by things the OFT have said about companies charging above £12 if they use Direct Debits or some such. It all sounds a little off to me.

I have been reading the reclaiming guide and other things and i was under the impression that the bank's ruling from December/January and most of what the OFT said about claims, didn't apply to credit card claims?

Should i continue and threaten court action, before taking it to the Ombudsman, if it is not resolved by then?

Thanks.

What Egg have said is true but they aren't referring to the Bank charges test case but to a report by the OFT from 2006 which specifically states "only a court can decide what a fair charge is".

Your choice what you want to do.

Premier_2

Whilst it is true that only a court can decide what is a fair charge, the OFT said in a press release that they would consider any charge over £12 to be unfair (whilst not implying charges of £12 or less are necessarily fair) and would consider legal action against companies that charge more.
http://www.oft.gov.uk/news/press/2006/68-06

Is there an OFT report which suggests the OFT wouldn't necessarily consider a charge over £12 to be unfair? If so, could you provide a link please?

natweststaffmember

Premier wrote: »

Whilst it is true that only a court can decide what is a fair charge, the OFT said in a press release that they would consider any charge over £12 to be unfair (whilst not implying charges of £12 or less are necessarily fair) and would consider legal action against companies that charge more.
http://www.oft.gov.uk/news/press/2006/68-06

Is there an OFT report which suggests the OFT wouldn't necessarily consider a charge over £12 to be unfair? If so, could you provide a link please?

Yes there is because they did give Egg special dispensation to charge £16.

http://www.oft.gov.uk/news/press/2006/credit-cards
This specifically mentions EGG credit card. Will look for more specific though for you.

FatratUK

Hmm, not sure what to do then. The guide on here says to threaten court action, then take it to the Ombudsman. They do shove the ''the OFT specifically mentions us in their report'' thing in my face in the letter too.

Premier_2

FatratUK wrote: »

Hmm, not sure what to do then. The guide on here says to threaten court action, then take it to the Ombudsman. They do shove the ''the OFT specifically mentions us in their report'' thing in my face in the letter too.

Normally I would suggest a claimant gives very careful thought before rejecting a partial settlement.

However in this instance I'm not sure and a simple risk-reward analysis may make things easier for you (assuming you still have the energy & desire to pursue your claim)

Egg are offering you £5.79. Accept it, and that is all you'll get.
Reject it, and the worst case scenario is that you'll never see that £5.79 again.

If you reject it, then you can appeal to the FOS for free. Now chances are (imho) that they will support the credit card company as they have offered to refund fees that are in excess of what the OFT has declared unfair (based on the link provided by NWSM above).
If they do, they'll probably uphold the proposed settlement, in which case you still get £5.79
They might decide that you are being a pain and whilst you should be entitled to £5.79 but didn't take it when offered, so they won't make the credit card company repay you (unlikely imho), or they might just find you are not entitled to anything.
Or they might just decide to award you more than £5.79 (again, perhaps not, but it costs nothing to ask, except possibly the loss of £5.79)

Whatever the FOS decide, you can still reject that and go to court ... but think very carefully if it gets that far as costs will accrue.

FatratUK

Yeah, i had a think and decided i will just go along with the guide... threaten court action, then just take it to the Ombudsman if that doesn't get me anywhere. Worst that can happen is i lose the £5.79. No big deal, it's worth the risk of losing such a small amount.

Cheers.