Positive balance on credit card

Blakestar

Hi there,

I currently have a Bank of Scotland credit card and bought my insurance using it. I have changed my insurance and they have given me a refund, which is over £200.

Is there a way of transferring this refund into my BOS current account?

Thanks,
Blakestar

InsideInsurance

Call your credit card company (and ideally quickly) and they should either be able to do a transfer or will send you a cheque. Being in a positive balance situation often is in breach of the T&Cs of your account and so its better to deal with is sooner rather than later

thenudeone

InsideInsurance wrote: »

Being in a positive balance situation often is in breach of the T&Cs of your account and so its better to deal with is sooner rather than later

If a retailer processes a refund which puts the account in credit, the cardholder hasn't really breached the terms, has he?

... unless it was a deliberate ploy to get cash by making a large purchase, transferring the balance to another card, getting a supplier refund, and asking the card company for a cash refund.

Blakestar

thenudeone wrote: »

If a retailer processes a refund which puts the account in credit, the cardholder hasn't really breached the terms, has he?

... unless it was a deliberate ploy to get cash by making a large purchase, transferring the balance to another card, getting a supplier refund, and asking the card company for a cash refund.

Thanks thenudeone, but it wasn't a ploy to get cash. I just passed my driving test and the insurance company wanted £600 because of this. I found car insurance for less elsewhere and asked for the policy to be cancelled. Nothing sneaky here.

lisyloo

If a retailer processes a refund which puts the account in credit, the cardholder hasn't really breached the terms, has he?

I agree, but often card companies don't insure credit balances so it's best to get it sorted just in case it gets stolen through fraud.
Credit card comapnies tend to only insure their money not yours.

flyer

Pardon my ignorance, but is there a problem with being in credit? I'm in credit by about £1000 because a balance transfer was effected later than I thought and I had paid some off.

InsideInsurance

thenudeone wrote: »

If a retailer processes a refund which puts the account in credit, the cardholder hasn't really breached the terms, has he?

... unless it was a deliberate ploy to get cash by making a large purchase, transferring the balance to another card, getting a supplier refund, and asking the card company for a cash refund.

Technically yes, they have "allowed" themselves to get into a credit situation just like someone who pays something but the retailer sits on it for weeks before charging allows themselves to go over the limit when that transaction goes through late.

lisyloo

Pardon my ignorance, but is there a problem with being in credit?

Two main problems.

One if that it's against the terms and conditions of the card. This could mean the lender cancelling the card, that could be awkward if you were away and relying on it for holiday/business (it's always good to take more than one card). You could also lose the benefits of a 0% deal or lose cashback.

The second problem si that lenders generally are only keen insure their money and not yours so if it's stolen or used fradulently you could have a big fight on your hands. Some people dispute this, but who wants a big fight and to go to court to win their case? I personally wouldn't want to spend a great deal of time and worry proving the point.

Miss_Havisham

I don't believe that the cover provided by Section 75 of the Consumer Credit Act would apply to anything bought by credit card if it were in credit (unless the credit balance covered only part of the purchase price.)

thenudeone

If the account is in credit then the card is probably no longer a "credit token" as defined by the Consumer Credit Act, so some protections may not apply.

Here is more information about "credit tokens": http://www.financial-ombudsman.org.uk/publications/ombudsman-news/46/46_plastic_cards.htm

chattychappy

It is not a breach of T+Cs to be in credit. It is (usually) a breach of T+Cs to put your account into credit (which would include contrived transactions to that effect.)

The reason is regulation. Deposit taking (ie banking) is a different regulatory activity from lending. CCs must avoid taking deposits when an account is in credit. So they write the T+Cs to prohibit this, and they should enforce it. But a merchant issuing a refund is distinct from the cardholder putting the account into credit.

Banks are regulated (for now) by the FSA. The OFT (for now) regulates CCs.

It is nothing to do with credit cards not wanting to "insure" your money. It's a simple issue of deposit takers being regulated as banks and being part of the FSCS.

S75 is a moot point. The transaction is still undertaken as part of of a regulated consumer credit agreement, but probably isn't "financed" by the agreement within the meaning of the Act. Not aware of any cases.

Agree the CC is not being used as a credit token, so this probably means you are not covered in the event of fraud resulting from your gross negligence. Ie such exclusion clauses may become enforceable. But that's not to say you are not covered for "normal fraud".