MSE News: MBNA slammed over unfair debt collection tactics

Tankrizzo_2

I was two days late paying my MBNA card once, obviously my fault, I just completely forgot.

They phoned all day and night, my mobile, my home number, even phoning my work six times. They even continued phoning three days after I paid.

In the end I wrote to them and withdrew my permission for them to contact me verbally, now they can only write.

Sparklyfairy

It's a shame the OFT only fined them £50,000 - that's peanuts to them. Aren't they still owned by Bank of America?

Paulgonnabedebtfree

chillxxx wrote: »

It doesn't surprise me. I had an MBNa Credit card. Although I had no difficulty in paying they did seem sail quite closely to the wind. they had a habit of sending out the bills only a few days before the due date I guess in order to gain a whole months interest. It aslo seemed to an imence amount of time for payment to be credited to your account if you paid via internet banking it sometimes took up to a week!!

That has been my sore point with MBNA too. They do seem to allow a lot less time to pay than other cards - presumably in the hope of collecting £12 penalty fees.
It is easy to outmaneouvre this tactic though by just setting up a DD for the minimum. At least there will be no penalties that way.
I found that sometimes, if bank holidays (particularly easter and xmas) were due, you would almost have to pay on the day of receiving the bill. A bit easier for BACS payments but some still prefer to pay by a cheque in the post.

pqrdef

If you've got a variable DD in place, they're supposed to give you 14 days' notice of what they're going to debit.

Surely it couldn't be that they send out statements on time to DD customers and late to everybody else? Could it?

fermi

Sparklyfairy wrote: »

It's a shame the OFT only fined them £50,000 - that's peanuts to them.

http://www.oft.gov.uk/news-and-updates/press/2010/136-10

"A breach of a requirement can lead to a maximum fine of £50,000 per breach and/or be grounds for revocation of a consumer credit licence."

Could potentially be many many many X £50K. :cool:

Sparklyfairy

fermi wrote: »

http://www.oft.gov.uk/news-and-updates/press/2010/136-10

"A breach of a requirement can lead to a maximum fine of £50,000 per breach and/or be grounds for revocation of a consumer credit licence."

Could potentially be many many many X £50K. :cool:

Oooh thanks for clearing that up! :T I really shouldn't speed read anymore...:cool:

ppc1

Sparklyfairy wrote: »

It's a shame the OFT only fined them £50,000 - that's peanuts to them. Aren't they still owned by Bank of America?

Firstly you are wrong in that MBNA have been fined, they have not, "The Office of Fair Trading (OFT) has threatened it with a £50,000 fine"

You do make an interesting point about being owned by Bank of America. Most UK banks operate under the remit of the FSA but as an american bank it actually has to adhere to the OCC as well as the FSA. The OCC imposes much stricter rules on banks when a debtor is experiancing hardship.

What this means for people in difficulty is that they could for example owe several thousands of pounds with a UK financial organisation, who will on demostation of financial dificulty, probabally accept a token payment, stop all interest and fees. These type of arrangements typically last up to 10 years, sometimes more.

The OCC state that if a debtor cannot repay the debt within 5 years it is highly unlikely that they will ever repay the debt. Also they state that an american bank should not delay or prolong the likelyhood of the debt charging off. In practice this means that if you think you are only experiancing short term difficulties, say 3-5 months you will probabally get no assistance of freezing fees or interest from an American bank and you are also very unlikely to get refund of fees.

It means that if you have a large debt and only offer to pay £1.00,(or less than 1.67% of the outstanding debt, being enough to pay it off in 5 years) generally an american bank will just supress interest and fees. This means that the debter is ineligiible for a payment plan arrangement but every month the account continues to falls further into arrears until it is charged off, normally after 6 months when the debt registers as a default, the debt is then potentially sold on to a third party organisation.

I am sure there are many example of people who are on arrangements for maybe £5 with many UK banks, try getting an american bank to do this - near impossible. Most of these rules imposed by the OCC have only come into play within the past 18 months!

FTW

happycrafter wrote: »

Wish they would do this with LloydsTSB

I wish they'd just kill RoydsTSB off full stop.

currentmember

ppc1 wrote: »

You do make an interesting point about being owned by Bank of America. Most UK banks operate under the remit of the FSA but as an american bank it actually has to adhere to the OCC as well as the FSA.

Surely a bank operating in the UK such as MBNA (which was american anyway prior to Bank of America) operates under UK financial law?

If the above is correct, then does HSBC also operate under Chinese restrictions or Clydesdale in Australian law given it is owned by The National Bank of Australia?

Please dont take this as a sarcastic comment, as this is not how it is intended, but is just my understanding.

forgotmyname

4 years too late for me, When i contacted them saying i was off sick & couldnt pay the full amount they
told me they wouldnt stop the interest or talk to me further unless i paid them more than i could afford.

Phone calls from 8am to 9pm and then text messages to the home phone after 9pm.