help please!-credit card late payment fees!!

rachaeln

hi
I was wondering if anyone could help me, i got a credit card 6years ago with a £500 limit, i spent upto £498 of it and started to pay it back off. I was making the minimum payment each month for 6months or so, until due to coming out of work i couldn't afford to make the minimum payment. They started to add on late payment charges and while i was still trying to make payments when i could, the charges were more than what i could afford to pay each month, so i ended up paying money to them, for them to just put it back on the balance owed in charges. I may aswell have been throwing my money in the street so i stopped making payments. I rang them up and explained why, asked them if we could come to a lower payment arrangement, in which they told me that unless it went to a debt collector, they couldn't lower the payments. I was also advised by citizens advice at the same time to stop making payments on all debts I had (I was struggling with other payments too), so i stopped making payments.
Eventually the balance I owed on the credit card, increased to £1,250, that's £750 in charges. :eek: When I got back into work, I sorted out payment arrangements on all my debts and have been paying off the credit card to a debt collector for 2years, I have now paid off £554 of the debt. I am just wondering if I have to pay off the rest of the debt or whether i am entitled to wipe off the rest of the debt as it is all charges?
thanks

pippitypip_2

You can certainly try to claim back the charges, see Martin's article on how to, here: http://www.moneysavingexpert.com/reclaim/credit-card-charges

Any queries, post your questions on the relevant forum, here: http://forums.moneysavingexpert.com/forumdisplay.php?f=102

It can take upwards of a few months, but lots of us have had great success with it, even claiming interest too.

hth,
pippitypip

stephane_2

You are not entitled to just stop payments because you feel like it, you can however try to claim some of the charges back from your bank but in all honesty with the recent court ruling I think you may struggle more now claiming anything back.
If the debt is with a debt collection agency you could also try to come to an arrangement with them for a full and final settlement. They probably have bought the debt for peanuts so if you have the funds you could make an offer of 20% to 25% of the outstanding debt as F&F but if you do come to an arrangement just make sure you get it in writing and that your file will show the account as settled...

pippitypip_2

The recent ruling was for bank charges and does not apply to credit card charges.

Indeed as stephane says, you CAN'T stop making payments under your agreed payment plan with the debt collector. You CAN simultaneously pursue claiming back the credit card charges which would eventually be credited back to your credit card account helping to clear the balance.

hth,
pippitypip

Any

I seriously doubt you have a case.

You just stopped making payments and made them when you felt like it (sorry, couldn't afford it). You should have contacted them before you just decided not to pay.

bengal-stripe

rachaeln wrote: »

I was also advised by citizens advice at the same time to stop making payments on all debts I had (I was struggling with other payments too), so i stopped making payments.

I cannot believe any CAB would have given you that piece of advice. They would have done their best to arrange a lower payment (if not a ‘token payment’ of something like £1.00 per month - to show your good-will).

You might want to see now a Citizen's Advice Bureau or some other Debt Service.

pippitypip_2

Credit card companies don't just refund the late payment charges beacuse they want to, being nice and friendly and all that.

They do it because they have to, enforced by the Financial Ombudsman Service.

The OP has a strong case, so it's not very helpful to give incorrect advice. Even if you disagree with the practise.

pippitypip

pippitypip_2

bengal-stripe wrote: »

I cannot believe any CAB would have given you that piece of advice. They would have done their best to arrange a lower payment (if not a ‘token payment’ of something like £1.00 per month - to show your good-will).

You might want to see now a Citizen's Advice Bureau or some other Debt Service.

CAB quite correctly advise to prioritise payments to ensure you retain the roof over your head and are able to afford food, electricity, gas and council tax - all deemed to be priority payments.

Only after that do they look at payments to cc companies etc. If there is anything left, you make goodwill gestures.

No need to see CAB now - on what basis do they need to help the OP? The debt collector has accepted a payment plan and the OP is paying it back but has a legitimate case for claiming back late payment charges and reducing the debt legally.

pippitypip

stephane_2

pippitypip wrote: »

Credit card companies don't just refund the late payment charges beacuse they want to, being nice and friendly and all that.

They do it because they have to, enforced by the Financial Ombudsman Service.

The OP has a strong case, so it's not very helpful to give incorrect advice. Even if you disagree with the practise.

pippitypip

On what basis do you feel the OP has a strong case??? I doubt very much that now the debt is with an DCA he'll get any type of charges refund from the credit card company. The charges are clearly stated in the T&C

Fiddlestick

pippitypip wrote: »

The OP has a strong case, so it's not very helpful to give incorrect advice. Even if you disagree with the practise.

On what grounds do you feel they have a strong case?

They voluntarily choose to cease payments of their own accord. That's breach of contract and the card provider was entitled to apply the charges.

If the charges were excessively high then they might get a refund down to the value of £12 per charge, but I can't see how they would get all the charges refunded when they were quite legitimate.

bengal-stripe

pippitypip wrote: »

CAB quite correctly advise to prioritise payments to ensure you retain the roof over your head and are able to afford food, electricity, gas and council tax - all deemed to be priority payments.

Only after that do they look at payments to cc companies etc. If there is anything left, you make goodwill gestures.

The CAB would have contacted the card in order to stop interest and/or charges.
They certainly would not advise "Just stop paying!"

I do not believe, that, at the time, the OP did contact them (or any other debt services).