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MBNA Residual Interest Scam

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MBNA Residual Interest Scam

edited 30 November -1 at 1:00AM in Credit Cards
10 replies 24.2K views
CelticHarlequinCelticHarlequin Forumite
1 posts
edited 30 November -1 at 1:00AM in Credit Cards
For those of you with 0% MBNA cards, watch out when you come to clear the balance. Do not wait until the end of your interest free period.

MBNA have a nasty little scam called “residual interest”. I got my last month’s interest free statement, showing my estimated interest if I did not clear your balance in full. I duly scheduled the payment to clear my balance in full. This morning, I ‘phoned MBNA to check that they’d received the payment and to close my account.

They did receive the full payment before the required date on the statement, but charged me “residual interest” for the period between the 9 month anniversary of my opening the account and the date that payment was received. Apparently, this is fully explained in the small print!!!

I offered to pay them the £126.50 interest by debit card over the phone immediately, but they do not accept payments over the ‘phone. I then told them that I would pay the £126.50 today and I wanted them to close the account immediately. They said that if I did that, £126.50 wouldn’t be enough as there would be interest accruing between today and when they actually receive the payment. I finally managed to get them to agree that if I paid £130 today, they would take this as full payment and close the account.

I have told them that I will be;

1. warning everyone I know about this scam
2. writing to Chester Trading Standards Dept (MBNA are based in Chester)
3. emailing https://www.moneysavingexpert.com to publicise this scam.

Their response was to offer to knock £50 off the residual interest if I didn’t do any of those and kept the account opened. I politely told them to shove their £50 where the sun don’t shine.

To add insult to injury, when I phoned Virgin One to make the transfer this morning, I asked them how long it would take for the money to be received by MBNA. They told me that the money would take 3 days to get from them to MBNA, as it does with any other payment. However, MBNA hold the money in a suspense account for 2 days before applying it to your credit card account. This means that MBNA have your money for 2 days, during which time they are earning ineterest on it in their suspense account, but still charging you interest because it’s not hit your credit card account yet! To me this sounds like theft.

I advise any of you with MBNA cards to clear them at least 1 full month before the end of your 0% interest period, and when you ‘phone MBNA to cancel your cards tell them that you know about the residual interest scam.

Replies

  • johnllewjohnllew Forumite
    1.9K posts
    They did receive the full payment before the required date on the statement, but charged me “residual interest” for the period between the 9 month anniversary of my opening the account and the date that payment was received. Apparently, this is fully explained in the small print!!!
    Yes, they're right. I've been with MBNA for years, have done numerous BTs and always paid them off at the right time without incurring any unexpected interest. If you don't read or don't undertand the T&Cs, you really shouldn't be playing this game.
  • As a newbie can I just ask:

    isn't it true that if you pay the outstanding balance before the 9 month anniversary date there will be no residual interest (even if they get the money just one day before)?

    Doesn't the same apply to Egg etc.

    Confused ???
  • johnllewjohnllew Forumite
    1.9K posts
    isn't it true that if you pay the outstanding balance before the 9 month anniversary date there will be no residual interest (even if they get the money just one day before)?

    Doesn't the same apply to Egg etc.

    Yes. I understood from CelticHarlequin's post that the balance was paid off after the 9 month anniversary date.
    They did receive the full payment before the required date on the statement, but charged me “residual interest” for the period between the 9 month anniversary of my opening the account and the date that payment was received.
  • SystemSystem
    177.7K posts
    10,000 Posts
    ✭✭✭✭✭✭
    If you are a MoneySaver, why didn't you just say you'd do none of what you threatened to save yourself £50?

    What you did, from your description, is just like getting a shotgun and pointing it at your head and firing it.

    Unless you have more money than sense of course.
  • boooglebooogle Forumite
    144 posts
    I've recently received my mbna statement and my 9 months 0% is coming to an end on 10th september. The statement says estimated interest next statement 0.00. I have phoned mbna and asked them to take the full amount by Direct debit on the 10th september. They have confirmed that there will be no interest charge.

    If the statement said there was an estimated interest figure, it looks to me like the 9 month period had expired.
  • MilarkyMilarky Forumite
    6.3K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    MBNA always advises of the last date of the promotional period [eg 10th September] online if you have registerd to use that service. It is also possible to make a payment at any time there using your debit card. The payment is applied the next working day, and so I make final payment on a balance on the day before the last date of the promotion. I have not been charged interest when doing this, so that's what I'd advise others to do. :)
    .....under construction....
  • pksarafpksaraf Forumite
    204 posts
    I am getting a bit confused with residual interest, could someone point me to the right post where I can understand what it is?

    As I understand, if the anniversary date is say 10th sept, and I make them payments by 1st sept, I should not be charged anything - am I correct??
  • EyesOnly

    Yes you are correct. Residual interest would only be charged if say your 0% ran out on 10th Sept but your statement payment due date wasn't until say 20th September. Then, even if you pay before 20th September, if it's after 10th September you will be charged interest for those few days (because there is no interest free period for BTs).

    Estimated interest figures are pretty useless it seems. They assume that the interest rate will not change before the next statement date, and of course it will! :-/
  • Hi CH

    You may need to check your Virgin T&C's, although you have stated your dislike for MBNA the Virgin Card you are transferring to is issued by MBNA.

    Regards
    YDS
  • We've just had the same problem with MBNA, we paid our final Balance Transfer payment well before the settlement date shown on the statement BUT the end of the 0% interest period was not the one mentioned on the statement iteself and fell two weeks before the payment due date. I complained and said that I had no intention of paying because they weren't open and clear in the account statement. They eventually agreed to credit the residual interest. GET THIS - when I said that I am a clever (money saving) person and use/switch 0% BT's to avoid paying interest. The Supervisor dealing responded by saying "We are a commercial company and our business is to lend money on a commercial basis WE DON'T WANT CLEVER PEOPLE" It sounded just like Gerald Ratner! ;D
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