Halifax reduced credit limit without notice?

n1ckb

My Halifax card was reduced from 7.5k credit limit to £750 - which was just above my outstanding balance - without notice causing a declined transaction.

I rang up twice and they said I will receive a letter stating that they had completed a credit check and that I had too much available credit so they had reduced my card accordingly. A bit of googling shows that they sometimes reduce your credit limit if you pay more than your minimum payment each month - which I do.

Today I recieved the letter and it stated that the reason my credit limit was reduced was actually due to missing a payment! As I have a DD and also make additional payments this is not true and my account confirms it.The call centre said the letter had been sent by mistake but they couldnt explain why my credit limit had been reduced.

Because of this I have had to balance transfer the £750 to ensure I didnt go over the new limit and pay for a credit check as I was concerned about fraud.

I am writing a letter of complaint but whats the best way of approaching this - have they broken any T&C's etc? I'm also looking for compensation for out of pocket expenses.

Thanks for any comments

BugsyBrowne

Out of pocket expenses and compensation i have read some threads on here but this one take the biscuit..

They can reduce your limit when they want,its up to them its their money come on mate get a grip.

apt

You will need to read your own T&Cs to see if Halifax has broken them. It will have the right to reduce your credit limit, but the T&Cs often state a notice period for this, e.g. 30 days, unless you yourself have broken the T&Cs.

n1ckb

star-fire wrote: »

Out of pocket expenses and compensation i have read some threads on here but this one take the biscuit..

They can reduce your limit when they want,its up to them its their money come on mate get a grip.

If I had failed to make a payment then fair enough - but I didnt amd have been left out of pocket and the letter they sent is blatently untrue.

jed1_2

You can get a free credit check online or a paper one for £2 so what expenses exactly has reducing your credit limit caused you?

BugsyBrowne

n1ckb wrote: »

If I had failed to make a payment then fair enough - but I didnt amd have been left out of pocket and the letter they sent is blatently untrue.

I Understand where you are coming from blo0dy banks seem to be cutting everyones limits lately.

Give them a call mate.

chattychappy

No. No compensation or expenses unless as a result of their breaching T+Cs (or regulatory rules) you have suffered a loss. You have a duty to mitigate any losses.

Since the new limit was above your balance, I don't really get the bit about having to do a balance transfer to stay within the new limit. But that would be your expense since you wish to go on using the card.

Can't see you're legally entitled to anything, but a token gesture might be in order since it seems they've messed up a bit.

n1ckb

chattychappy wrote: »

No. No compensation or expenses unless as a result of their breaching T+Cs (or regulatory rules) you have suffered a loss. You have a duty to mitigate any losses.

Since the new limit was above your balance, I don't really get the bit about having to do a balance transfer to stay within the new limit. But that would be your expense since you wish to go on using the card.

Can't see you're legally entitled to anything, but a token gesture might be in order since it seems they've messed up a bit.

I was concerned about possible fraud as there was no justification for reducing my credit limit so reactivated my credit expert account and completed a credit check.

They hadnt told me about the limit change so payments had gone in the meantime which meant I had a declined transaction. I have serveral bills and pre orders on the card so I had to move the balance to free up some credit on the card.

Regardless it seems they have broken section 14.2 by not giving notice and also for not having a 'good reason' to 'disadvantage me' so will base my letter on that.

ElkyElky

n1ckb wrote: »

I was concerned about possible fraud as there was no justification for reducing my credit limit so reactivated my credit expert account and completed a credit check.

They hadnt told me about the limit change so payments had gone in the meantime which meant I had a declined transaction. I have serveral bills and pre orders on the card so I had to move the balance to free up some credit on the card.

Regardless it seems they have broken section 14.2 by not giving notice and also for not having a 'good reason' to 'disadvantage me' so will base my letter on that.

Let me make this real clear for you. Your credit agreement will state the credit limit is variable which means they are permitted to amend your limit at anytime, any where, whenever they so wish to. They don't have to notify you.

Banks very rarely notify anyone before a pending limit decrease for the simple fact that the customer may go on a shopping spree using the card, which would prevent the bank from decreasing it.

So to sum up, you have no grounds for compensation. They were quite within their rights to decrease your limit and there is absolutely nothing you can do except express your anger with the bank, and even then, that won't get you anywhere.

n1ckb

ElkyElky wrote: »

Let me make this real clear for you. Your credit agreement will state the credit limit is variable which means they are permitted to amend your limit at anytime, any where, whenever they so wish to. They don't have to notify you.

Banks very rarely notify anyone before a pending limit decrease for the simple fact that the customer may go on a shopping spree using the card, which would prevent the bank from decreasing it.

So to sum up, you have no grounds for compensation. They were quite within their rights to decrease your limit and there is absolutely nothing you can do except express your anger with the bank, and even then, that won't get you anywhere.

Their T&C's state (14.2) 'however we will only reduce your credit limit or cash limit if we have a good reason' - as their stated reason was false they have broken the agreement so I dont see how they could say they were quite within their rights?

the_insider

They won't tell you the full reason, just because you don't think it's a good reason doesn't mean that they don't. It will be a number of factors. If you had a limit of £7,500 plus another card somewhere (which I assume you already had if you've BT'd) then you'd have to be on a pretty good income to keep that limit.