MSE News: No. 10 to reveal credit card crackdown on Monday

Cell

DGJsaver wrote: »

surley `reasonable time` is now worse than before , when it was assumed that as long as you kept up the same sort of repayments as your history suggest.....now , whats to stop the bank saying right , not having this , pay more or face the consquences....? after a year or so ?

Given that the whole tone of the report has been to ensure that people don't have to face an unexpected increase in outlay I doubt very much whether it will change what has happened now. Think of the Ombudsmen cases that would ensue.

Additionally, somewhere within the report there's a representation from that card industry that increasing minimum payments (and by derivation that means not agreeing to accept the minimum if you choose to close the product) significantly is against their interests. We all know why.

Put simply it is in the lenders' interests to accept minimum payments on opt out accounts because the interest still continues to accrue and they need something to offset the loss of merchant fees they will suffer because the account is closed.

EDIT: The actual paragraph says

Finally, we have been advisedby lenders that an increase in minimum payments would have an impact on their profits, which they might seek to recoup from customers in other ways (e.g. increased interest rates, annual fees).

teddyco

ILW wrote: »

Probably be the same sort of stuff that makes life a little more difficult for the sensible borrowers, so as to protect the idiots from themselves.

ILW, I totally agree with you!

Counting the days until the General Election and ready to vote for the Conservatives.

tidyfilms_2

(Statistic courtesy of the BBC News about this announcement)

What do the other forums members think of this?

I have my current account with Lloyds. I also have a Lloyds TSB credit card and a direct debit set up to pay off the balance of that card, in full, each month from my current account, normally about £1200.

Plain sailing you would have thought - surely Lloyds are capable of transferring money between two of their own accounts without a hitch?

Three separate times in the last six months, Lloyds have had computer errors with their direct debits which have resulted in the direct debit being taken, then refunded to my current account some five or seven days later.

Now I regularly work away from home for months at a stretch and the only communication I get from Lloyds while I'm away is a Monday morning sms with the balance of my account. I use internet banking but I rarely have internet access when I'm working away.

When it last occurred in January, I was at home, noticed the error via online banking contacted them to sort it out. Then in early February I had to go to Scotland to work for a couple of months. It's not ideal, I live with my partner in Kent. I've been living like a Monk up here to pay off the accrued debt from their Dec/Jan mistake.

Unbelievably, the problem has continued to happen. As a result of this happening for the last three months I have accrued a debt or £4300 which Lloyds now expect me to pay off in full or be charged interest on.

Apparently because I knew I had a certain amount of money leaving my account, I should have kept this money in my account - i.e. it's my fault for trusting that they could do their job properly and not monitoring my online banking more closely. After an hour and two minutes, speaking to three Lloyds customer service personnel on Sunday, (whose grammar was appalling, constantly replacing 'were' with 'was' - e.g. 'Was you aware that the payments had been refunded?') finally the last one suggested there might be some kind of payment plan that they could offer me to help pay it off. This is from the bank I've been with since graduating in 1992 and that we as taxpayers have bailed out to the point of it nearly being nationalised.

I wouldn't be in this situation if they hadn't refunded the direct debits :mad:

There's a part of me that thinks someone's created the whole situation to get myself and all of the other customers into debt and make money from us.

I've been saving money in a PEP for the last 10 years to pay off my mortgage at the end of its term. I'm going to have to cash it in just to get back on top of my credit card debts.

I'm at the end of my tether. I work really hard just to make a living and this is what happens. I feel there's no point anymore. Is it just me?

CannyJock

DGJsaver wrote: »

who decides the `reasonable period`

??

The Banks !!??!

The reasonable period clause is the same as it was before today's announcement. It's already covered in the article on rate jacking

http://www.moneysavingexpert.com/reclaim/credit-card-interest-rate-increases

So to help I asked the Financial Ombudsman Service its thoughts:

• If a consumer has been repaying the minimum amount historically on the card, it may well be reasonable for them to continue to be allowed to pay the minimum rate. We have not had to issue an ombudsman's decision on this yet and we would, of course, consider the individual circumstances of the case before doing so.

And The UK Payments Administration's (the credit card body):

• What we've not done is define reasonable but if, for example, I'd only been making the minimum repayment (because that's all I can afford) on a £4,000 outstanding balance, I wouldn't expect my bank to turn round and expect me to pay back in 3 months. So even historically if I'd missed a minimum repayment, I would still expect to be given the same terms as others to repay in a reasonable period.

Therefore if you were previously paying the minimum repayments, it is likely to be possible to keep doing so, though if you were paying more previously and decided to start paying less as a result this may be deemed 'unreasonable'.

Cell

tidyfilms wrote: »

(Statistic courtesy of the BBC News about this announcement)

What do the other forums members think of this?

I have my current account with Lloyds. I also have a Lloyds TSB credit card and a direct debit set up to pay off the balance of that card, in full, each month from my current account, normally about £1200.

Plain sailing you would have thought - surely Lloyds are capable of transferring money between two of their own accounts without a hitch?

Three separate times in the last six months, Lloyds have had computer errors with their direct debits which have resulted in the direct debit being taken, then refunded to my current account some five or seven days later.

Now I regularly work away from home for months at a stretch and the only communication I get from Lloyds while I'm away is a Monday morning sms with the balance of my account. I use internet banking but I rarely have internet access when I'm working away.

When it last occurred in January, I was at home, noticed the error via online banking contacted them to sort it out. Then in early February I had to go to Scotland to work for a couple of months. It's not ideal, I live with my partner in Kent. I've been living like a Monk up here to pay off the accrued debt from their Dec/Jan mistake.

Unbelievably, the problem has continued to happen. As a result of this happening for the last three months I have accrued a debt or £4300 which Lloyds now expect me to pay off in full or be charged interest on.

Apparently because I knew I had a certain amount of money leaving my account, I should have kept this money in my account - i.e. it's my fault for trusting that they could do their job properly and not monitoring my online banking more closely. After an hour and two minutes, speaking to three Lloyds customer service personnel on Sunday, (whose grammar was appalling, constantly replacing 'were' with 'was' - e.g. 'Was you aware that the payments had been refunded?') finally the last one suggested there might be some kind of payment plan that they could offer me to help pay it off. This is from the bank I've been with since graduating in 1992 and that we as taxpayers have bailed out to the point of it nearly being nationalised.

I wouldn't be in this situation if they hadn't refunded the direct debits :mad:

There's a part of me that thinks someone's created the whole situation to get myself and all of the other customers into debt and make money from us.

I've been saving money in a PEP for the last 10 years to pay off my mortgage at the end of its term. I'm going to have to cash it in just to get back on top of my credit card debts.

I'm at the end of my tether. I work really hard just to make a living and this is what happens. I feel there's no point anymore. Is it just me?

I wonder whether you should start a thread on this point because it doesn't seem to relate particularly to the topic and may get overlooked?:)

natweststaffmember

Have emailed you MSE Guy but the minimum repayment calculator link does not work.

[Deleted User]

Are these new changes going to apply to existing credit card debt or just newly accrued after this date?

pmarkc

Surely the most iniquitous charge that card companies make is interest on paid balances. If I own £500 on my card but for some reason I only pay £499 I am still charged interest on the full £500 until it is all paid off!

kennyh_2

there will be tougher rules on lenders hiking interest rates.

What are the current rules that allow such usurous rates?