MSE News: Co-op 'breaking spirit' of anti rate-jacking credit card rules

chattychappy

Nicely put by izools.

I would add that if the Lending Code is incorporated into the T+Cs directly or the T+Cs are worded in the same way as the Lending Code, then "reasonable" is a contractual term. It's not for the Co-op to unilaterally decide how to interpret this. It would be for the "man on the Clapham omnibus" to decide what is reasonable and this would bind both parties.

Hazzanet

izools wrote: »

First let us clarify that the credit agreement between us has a minimum repayment of 2.5% of the balance each month. This is a term you have decided upon, and on that basis, I believe it fair to assume that any payment made to the account in excess of the minimum amount you decided upon would be view as repaying the debt within a reasonable time frame.

[Devils advocate]

Equally, you agreed in your contract with them that the rate applicable to the debt was 'variable'. The rate has varied and you have rejected it; therefore what's to stop the Co-op from rejecting the 2.5% minimum payment part of the contract.

The contract should work both ways.

[/Devils advocate]

NB: I don't work for the co-op before anyone asks.

izools

You raise a good point. I certainly think Chatty Chappy's addendum is important to mention in any complaint raised to the Co-Op in relation to this.

I, however, simply won't ever be going near Co-Operatives credit cards. I feel new customers won't have much recourse against this term as they were aware of it (theoretically) at the time they opened the account. However existing customers, I expect, would see greater mileage with their complaint as it is a term forced upon them which they didn't originally agree to.

proeleche

It should be obvious to anyone that the Co-op is breaking the spirit of these rules: these rules were agreed by the companies and Government in compromise that the Government would not legislate on the matter.

Further, it is also obvious that what is a 'reasonable time frame' depends on an individual's circumstances and card balance, so to state six months is a bit of a nonsense.

It would be interesting to see what the FOS would make of this, and I am inclined to think that they would side with the consumer on this one.

speedbird1973

To be fair they do say "you are deemed to have accepted the new rate" if you go on longer than 6 months. I wonder if a letter saying "No I don't!" is enough. They are still relying on the definition of you accepting/declining the rate.

proeleche

speedbird1973 wrote: »

To be fair they do say "you are deemed to have accepted the new rate" if you go on longer than 6 months. I wonder if a letter saying "No I don't!" is enough. They are still relying on the definition of you accepting/declining the rate.

I doubt very much that a letter would do it, as we are constantly reminded by others on these boards: ' you signed the contract blah, blah, blah...' Never mind the fact that this contract can be altered as and when they see fit. I knew the government coming to an 'agreement' with these companies was a mistake - forcing their hand is the only way to ensure fairness for consumers.

More importantly, it’s important to remember that where one credit card company comes up with a sneaky way to increase revenue, the others will follow, and I won’t be surprised if this ends up being standard across the board.

Paulgonnabedebtfree

proeleche wrote: »

I doubt very much that a letter would do it, as we are constantly reminded by others on these boards: ' you signed the contract blah, blah, blah...' Never mind the fact that this contract can be altered as and when they see fit. I knew the government coming to an 'agreement' with these companies was a mistake - forcing their hand is the only way to ensure fairness for consumers.

More importantly, it’s important to remember that where one credit card company comes up with a sneaky way to increase revenue, the others will follow, and I won’t be surprised if this ends up being standard across the board.

That last bit is my main concern too.
For anyone in a fair bit of debt it would effectively put the ratejacking part of the deal down the toilet.

voyager999

I was concerned to see the heading refering to good customer service and was very concerned where the co-op is concerned. I know we all get gripes about organisations from time to time but i think that not transfering my mothers current account to her from her joint account with my father after his death was a bit rich .They had a joint acount for over 30 years from when the co -op started the "free banking" trend in the market. I started work and also joined having an account for over 20 years. And what do you think that this 50 years of combined custom instigated by my father was rewarded with - yes you got it - nothing. They would not let the account name be changed to my mothers name only. Just what you need on top of all the other stress of your father passing away.

So is that what your headline calls good customer service. We are no longer customers of this selfish and thoughtless organisation who hide behind confidentially "laws". They were not worried about confidentiallity when my fathers wages were going into my parents joint account for thirty years.

Although he is sadly no longer with us one of my fathers sayings was "Rules are ment for the guideance of wise men and the obediance of idiots" - I rest my case for the idiots at the co-op.

Paul_Herring

http://www.moneysavingexpert.com/news/cards/2011/02/co-op-admits-to-unfair-rate-jacking-rule

The Co-operative Bank has admitted it was wrong to threaten to punish credit card customers who legitimately reject an interest rate rise.

[...]

A Co-op spokeswoman says: "Following the [MSE] article, and after further guidance from the industry, we are currently reviewing with the intention of removing our policy of stating a specified timescale (6 months) for customers to repay any existing credit card debts, when rejecting a rate increase.

"We pride ourselves on our fair and honest approach and it is important to note that our original decision to incorporate a specified timescale was done in the spirit of being open and transparent with our customers and providing some clear guidelines for customers.

"Where any customer is in hardship, any timeframe was and always will be considered on an individual basis, with particular regard to each customer's financial circumstances."

[...]

Translation:

Oops. We really didn't mean to say that. Honest Guv.

tightarsey

Cooperative might have apoligised for threatening to impose a 6 month repayment schedule on Credit Card closures, but they are still creaming charges from their customers with Valid Visa Electron Cards (with Electron logo)

Cooperative for the record - my card isn't an 'Online Debit Card', it has a Visa Electron logo and I expect charges related to Visa Electron to be applied (ie. no fee/zero) when I select Visa Electron on a travel website. I don't expect to be charged fees relating to Visa Debit. The two cards are distinct, and are charged differently, they are not the 'same' as your trying to convince your customers.

I don't need an explanation, I need the system changed so this doesn't occur, and Cooperative need to pay back all the money they have incorrectly collected on behalf of travel firms, by incorrectly classifying Cooperative issued Visa Electron Cards. Cooperative have had 4 months to do something (this change occurred around 1st Oct 2010), so Cooperative obviously think its 'ok' to mislead their customers.
(and yes it is the fault of Cooperative - not Travel Websites, charges are clearly shown - what isn't transparent is the fact the charging mechanism applied to my card has been altered by Cooperative)

Cooperative are creaming charges on valid Visa Electron Cards and there is no regulatory body that does anything about it. FO, OFT, FSA, Card Payment Services - they are all useless when a complaint is against all customers for what are small amounts, but collectively add up to thousands. Basically 'technical system changes = under the radar, big buck profits'

The fact that no one from the Financial Ombudsman reads/monitors this board also shows what an incompetent organisation the FO is, allowing the Cooperative to get away with blatant dishonesty with regard to this matter. I've been systematically been lied to by Cooperative, to confuse, trivialise the issue as though it has no consequence, when thousands in charges are being mis-applied and collected from their customers.

Its about time someone got off their !!!!!! and sorted the problem. Get these charges incurred refunded to Customers, across the board. Cooperative should be made to issue a apology on the front page of their website, they have fcked up - and are trying to cover their ar5es. Own up, do the right thing - and put it right.