advice te T&C's

gh4662

I have had an account with a large UK clothing store for 25 years and have always managed the account well.
I am not going to name them yet as I don't want to prejudice my chances of a further refund.

Last month I made a large payment and then noticed I was still charged the full amount of interest. When I challenged this over the phone I got a standard letter explaining I had signed up to the T&C's so tough.
I then wrote to their complaints department pointing out that there were conflicting paragraphs in their T&C's one saying that interest will be charged on the full previous months statement balance and the other saying it was calculated daily based upon the last statement balance minus any payments made.

So I then get an email saying thank you for pointing this out, we have made the manager responsible aware and as a gesture of goodwill we have refunded your interest.

So my question is, how can it be a gesture of goodwill when there is clearly an error in the T&C's and secondly how far back could I ask for other refunds of interest that have been over charged when I have made large payments in the past?

I will at some point name and shame the company so others may benefit from this, however will see what happens when I email them back today..

PeacefulWaters

Last month I made a large payment and then noticed I was still charged the full amount of interest. When I challenged this over the phone I got a standard letter explaining I had signed up to the T&C's so tough.

Did you clear the balance IN FULL?

And stop messing about and name the card you have. Then readers can check the T&Cs for themselves.

So my question is, how can it be a gesture of goodwill when there is clearly an error in the T&C's

They haven't accepted that there's an error. They've coughed up to get rid of your complaint. While it's possible that their legal people are reviewing the wording as a result I think it's unlikely.

and secondly how far back could I ask for other refunds of interest that have been over charged when I have made large payments in the past?

You can ask for as far back as you like. They might well turn round and tell you that they think the wording on the agreement is watertight. And then tell you to do one.

gh4662

The card is Next Directory, these are the T&C's in question, I made a large payment a week after the statement date so according to the first underlined passage this should have been taken into account before they charged the full amount of interest on the following statement. So for example I owed £1000, paid £900 week 1, should have been charged 7 days interest on £1000 and then 21 days interest on £100, the first letter I received stated that as I had not paid off the full amount owing I was liable to pay all the interest.

These are the relevant bits from their website


Anypart payment made by you will be taken into account when calculating thefollowing month’s service charge.

Ourservice charge is calculated on a daily basis on the outstanding balance ofyour Next Account. If you do not pay your Next Account balance in full by thedate shown on your statement, the service charge will be charged on youroutstanding balance from the date of your last statement. You will not becharged any more service charge than has previously been added to your NextAccount if we receive payment of the full outstanding balance by the date shownon your statement.
This is the charge made for the use of our credit facility and is calculated on a daily basis on the remainder of the balance on an account, taking into consideration any payments that have been processed.

PeacefulWaters

Have you checked their calculations? Can you show that they're incorrect?

The wording doesn't seem contradictory to me. Interest charged daily, repayments taken into account. As you'd expect.

gh4662

I have been charged the service charge shown on the previous statement as per the second underlined sentence where it says "the service charge will be charged on your outstanding balance from the date of your last statement" so for example the last statement said £1000 owing, service charge if you do not pay in full will be £20. The next month regardless of the fact that I had paid almost all the £1000 off they still charged £20, despite the following underlined sentence saying that its calculated on a daily basis taking into consideration any payments that have been processed.

gh4662

They refunded the whole amount of interest charged, not just the difference

gh4662

so regarding the T&C's how is it calculated daily taking into account any payments when they charge you interest on the full balance of the previous months statement regardless of any payments made?

so month 1 you owe £1000, pay off £999 day one of month 2 you still get charged for 29 days borrowing of £1000, which goes against the sentence that says they take into account any part payments and interest is charged daily.

SnowTiger

gh4662 wrote: »

so regarding the T&C's how is it calculated daily taking into account any payments when they charge you interest on the full balance of the previous months statement regardless of any payments made?

so month 1 you owe £1000, pay off £999 day one of month 2 you still get charged for 29 days borrowing of £1000, which goes against the sentence that says they take into account any part payments and interest is charged daily.

Isn't that the interest for month 1?

Generally, these types of accounts work the same way as credit card accounts. Interest is accrued daily, but only added to the account when the statement is produced.

Interest is charged in arrears: the interest you pay this month is for the previous month.

gh4662

if it was the interest for month 1 why would they not charge it if you totally clear the balance in month 2?

chattychappy

gh4662 wrote: »

So my question is, how can it be a gesture of goodwill when there is clearly an error in the T&C's

Clear to you, but as noted they don't want to admit to this. By giving you the money, they are extinguishing your claim and do not have to face with the cost/hassle/risk of complaints handling/litigation. Sometimes it is genuine "goodwill" from their end. Ie they are "clear" you don't have a claim but value your business so think you will be happy to get your money back. I'm sure in some cases, firms know there is a problem and would rather just pay people off than face a ruling from a court/FOS.

FCA firms are meant to monitor complaints and identify systematic problems. The problem is that you, as a punter paid off, are pretty powerless. The FOS are unlikely to be interested as the matter has been resolved. The FCA are likely to push you to the FOS as they don't want to get involved in "individual disputes".

gh4662 wrote: »

secondly how far back could I ask for other refunds of interest that have been over charged when I have made large payments in the past?

The usual rule is 6 years (from the date of the "wrongly" applied interest in this case).


I have read your the T+Cs you quote, and did have to read them twice. I do think the meaning is clear, but could have been written more a little better.

"Anypart payment made by you will be taken into account when calculating thefollowing month’s service charge."

OK clear.

"Ourservice charge is calculated on a daily basis on the outstanding balance ofyour Next Account."

OK clear.

"If you do not pay your Next Account balance in full by thedate shown on your statement, the service charge will be charged on youroutstanding balance from the date of your last statement."

The outstanding balance will vary through that period and consequently so will the service charge. Making a part payment means that the outstanding balance will fall, and so will the interest. Your interpretation is that it is the outstanding balance as shown on the last statement on which interest is applied. But it doesn't say that - note it says "from the date", not "at the date".

"You will not becharged any more service charge than has previously been added to your NextAccount if we receive payment of the full outstanding balance by the date shownon your statement."

OK clear.

"This is the charge made for the use of our credit facility and is calculated on a daily basis on the remainder of the balance on an account, taking into consideration any payments that have been processed."

OK clear.

So, in conclusion, I think the T+Cs are clear. The question is did they apply interest in accordance with them? It may also be, (to add further confusion) that their letter had mistakes (eg by misrepresenting the effect of the T+Cs).

If, as you say, you were charged interest on the statement balance without allowance being made for the part payments, then it sounds like an IT issue.

gh4662

On the first phone call, which was confirmed by a standard letter two days later they stated Interest is charged at 1.98% of the outstanding balance each month.

How does this then equate to being calculated daily, they made no mention of this, they just stated its charged on the outstanding balance. It can't be both calculated daily and charged at 1.98% of the outstanding balance? its either one or the other