Credit Card - MBNA still fulfil transaction after account closure in June 2010

tonycusano

Hi Martin

I had a credit card which I closed back in 2010 with a zero balance. This week I had recieved a letter of sums in arrears for late fees and interest on this closed account. When I contacted MBNA they told me that an insurance company requested a payment in January and they had to legally make the payment, even though the account had been closed for 6 months. They didn't inform me that any payment had been made on this credit card until yesterday. They didn't send me a statement or contact me in any other way to let me know that a payment was due. The only time I realized money was owed was when I received the overdue payent demand which I received yesterday. It had taken them four months to inform me and then they charged me interest and other charges for non payment. As far as I was concerned the account had been closed and therefore no more payments could be made from it. Surely I should have been informed that a payment had been made.

As far a I understand it, when an account is closed then no further transactions can be made against this account. Also there is no longer a contract between me and the credit card company once the account has been closed. What concerns me is that a payment has been made on a closed account. Is this legal?

Without informing me or asking my permission they made this payment. I feel I have no control over my money and it is a disgrace that the credit card company have this sort of power with people's money!!! Shouldn't they have rejected the payment?

When I contacted the insurance company they told me that when an account is closed the request for payment is rejected.

The credit card company told me that they are legally obliged to honour submissions even on a closed account. Is this correct and if so, don't they have a legal obligation to inform me that payment had been made so that I could at least have paid it before interest and others charges are accrued?

I should be grateful if you would advise me of this matter.
Thanks
Tony



:mad:

lisyloo

As far as I was concerned the account had been closed and therefore no more payments could be made from it.

Sorry, but you are wrong.
When you closed the account they should have told you that you need to close any continuous authorities (did they tell you this?).
They are correct that they are legally obliged to pay it and if you wasnt to stop continous payments then the contract lies between you and the retailer and is nothign whatsoever to do with the card comapny.
Did you have any outstanding continuous authorities? any insurance or magazines you didn't cancel.

Surely I should have been informed that a payment had been made.

Have you moved house, changed email address?
If not then I would be making a formal complaint that you have not been informed about this.
Use their formal complaints procedure and send the letter recorded deilvery.

What to do in the meantime.
Is the transaction valid? i.e. something you did actually purchase.
If it was me and it wasn't going to put me in financial hardhsip and it was a genuine transaction that I hadn't cancelled then I'd pay it to save my credit rating and have the argument about the lack of notification later on.

As far a I understand it, when an account is closed then no further transactions can be made against this account.

Sorry you are wrong.
If you have an continuous payments you must cancel them with the retailer. This is your responsibility and they should have told you this on the phone/by letter when you closed the account.

What concerns me is that a payment has been made on a closed account. Is this legal?

Yes, moreover it woudl have been illegal to stop the payment.

Without informing me or asking my permission they made this payment

You gave the retailer a continuous authority to take money.
The card company are obliged to honour it and would be acting illegally if they didn't.
If you want to cancel it that's your responsibility to do so.
They have done nothing wrong in making the payment however I woudl say they have done something wrong in not informing you (unless you changed address and blocked all emails from them).

I feel I have no control over my money

Well don't give companies continuous authority if you are unable to keep track of them.
Personally I much prefer direct debit because I can canel it with the bank.
I NEVER use CCAs and if a company doens't give me a choice of payment then I go elsewhere.
If you want to keep control then don't give a company a continuous authority to take money on a regular basis.
Find another payment method (most retailers have a choice).

and it is a disgrace that the credit card company have this sort of power with people's money!!!

It's a useful facility for some people who want regular magazines etc.

Shouldn't they have rejected the payment?

No sorry. They can't legallly do that.

and if so, don't they have a legal obligation to inform me that payment had been made so that I could at least have paid it before interest and others charges are accrued?

Yes, I would say they should have told you.
Are there any obvious explanations?
Like you changed address and didn't tell them?
If you haven't changed address or email address then I'd complain formally and send it recorded delivery.

In the meantime if it was a transaction that you HAD authorised then I would recommend you pay it for the sake of your credit rating.
Then ask them for any fees/interest/charges back in your complaint letter, but this may take some time.

Paul_Herring

lisyloo wrote: »

Surely I should have been informed that a payment had been made.

Have you moved house, changed email address?

Cancelled the direct debit/changed current account...?

lisyloo

Cancelled the direct debit/changed current account...?

They should still inform you of payments.
If you have a DD then it's a legal requirement to inform you of if the payment varies.
Of course they can do this via paperless methods.

If MBNA have turned off statements/comms then I'd say they are at fault.
But there's always the possibilioty that the OP has turned off alerts/emails etc.
We simply don't know without further comment from the OP.

oki25

Sorry but mbna is just obliging visa/mastercard, which are guaranteed forms of payment. If you take a service and promise to pay, MBNA will honour it, they pay out, a month later-you owe them. If you are paperless billing and fail to pay for 3 bills, you will be switched back to paper bills, this could explain the delay in paper statements

chattychappy

Agree with the gist of above.

You can only terminate a contract in accordance with the agreed T+Cs (or else as the law provides). When you closed the account, you were still required to meet any outstanding obligations - the T+Cs make this clear. So yes, it is "legal" in the sense you contractually bound yourself.

In the case of CPAs, unless you cancel the authority (which is given to the merchant) then they will remain in force despite closing the account. If you cancel the CPA, but the merchant continues to charge, then although it will go through you can have it reversed.

So it just comes down to whether you gave the authority, didn't cancel it, and whether the charge was within the authority you gave.