Lloyds TSB credit card penalty charge

maninthestreet

I missed my December payment on my MBNA card by 1 day, and was charged £12. MBNA seem to require the payment almost 7 days in advance of the next statement date - does it really take 7 days to process a payment?
To punish them, I've used the 0% balance transfer offer on another of my credit cards, to transfer my MBNA creadit card debt to this other card. They wont be getting any interested from me over the next few months as a result.

Astaroth

The system takes up to 5 working days for payment to clear because of a whole host of reasons including out dated systems (that would cost a stupid amount of money to update and would be exceptionally high risk - imagine if there was a single line of code that was wrong that ment all transactions between banks for 1 day (or more likely a few days) simply disappeared for the whole of the UK)

In addition to that there are a very large number of checks that banks are required to do to comply with anti-money laundering/ proceeds of crime etc which all add time to the process as much has to be checked manually when the system flags something that happens to meet criteria they have been asked to check against.

Most payments do go through quicker than the required 5 working days but they are obviously going to be pessimistic on their instructions as if they said allow 4 working days and it did take the full 5 they wouldnt be able to apply any charges.

Scarlett

Bossyboots wrote:

The scale of the charge is the accepted figure to reflect the losses to the credit card company. They are entitled to charge what the breach of contract cost them. It only becomes an unlawful charge when the figure charged is in excess of their reasonable costs as then it becomes punitive. Thus on this occasion there would be no grounds to claim it back.

From the OFT website:

Where credit card default charges are set at more than £12, the OFT will presume that they are unfair, and is likely to challenge the charge unless there are limited, exceptional business factors in play. A default charge is not fair simply because it is below £12.

The OP's breach in all likelihood did not cost the bank £12; therefore it can be reclaimed.