Credit Card Debt of 20p generates debtor letter

jonesMUFCforever

amsquared wrote: »

That's what a lot of Financial Services Managers and Compliance departments say but when you check what the regulations actually are you find the company interpretation is much stricter than the FCA intended.

I am in the process of going through the FCA site to try and find the correct paragraph but it is not easy.

You really have too much time on your hands - just give her 20p and pay the bill - ask nicely and they may refund any late payments or interest charges.

Herbalus

This is a public forum, so your chances of finding somebody who knows the FCA rulebook that deeply are probably quite limited. I doubt there are that many technical experts that want to read the general public's balance transfer issues. Sorry. In fact, if you work in financial services you're probably as well placed as any, and seem to have enough motivation over 20p!

But you'll probably find there is no willingness to implement a system to avoid letters about 20p debt. If they've considered it at all, they've probably decided that the cost of adapting their systems to every single conceivable circumstance isn't enough to combat a few people (let's face it, the amount of people with such a silly amount of debt is probably quite few) feeling the letter is heavy-handed..

eskbanker

amsquared wrote: »

I would argue it doesn't cost any more money to design customer centric IT systems, but financial service companies take the easy "One Size Fits All" approach

I would agree that if starting from scratch then designing customer-centric IT systems is an obvious thing to do in this day and age. However, without an in-depth knowledge of the IT systems in financial services, my suspicion is that many, especially the really core ones, will be the product of design decisions taken long ago, probably well before banks referred to cardholders as 'customers'!

And if I had 20p for every time I'd heard comments like "it would be relatively easy to add a rule to the system"....

Vortigern

stclair wrote: »

To prevent such issues it might be worth setting up a DD for at least the minimum payment.

Had there been a DD in place, the card issuer would possibly not have bothered to collect such a small amount, but would presumably not have sent the default letter either.

shortcrust

I don't see why the bank felt the need to apologise and I don't see why the OP is getting worked up about them having a letter about the 20p.

What am I missing?!

[Deleted User]

What's the issue here?

Person owes money, person doesn't pay money, person gets letter asking them to pay money.

I'll bet they'd be more upset if they DIDN'T get a letter, then got a £12 missed payment fee, and interest, and a couple more missed payments, and dings on their credit file, and a visit from a debt collector, and a trip to debtor's jail, and eventual execution at the hands of the Sheriff of Nottingham, while their family is hauled off to the workhouse for all eternity, and their firstborn sold to a cult in Azerbaijan.

stclair

If their is an amount due on the account then the company should continue to collect the Direct Debit as normal regardless of the amount.

I had a remaining balance of £0.15 once and it was still collected by the Direct Debit that was in place.

amsquared

shortcrust wrote: »

I don't see why the bank felt the need to apologise and I don't see why the OP is getting worked up about them having a letter about the 20p.

What am I missing?!

My elderly friend was visibly upset at receiving the letter and it spoiled what should have been an enjoyable weekend holiday. That is why the bank apologised.

Perhaps the way the letter is worded makes the process difficult for some customers to understand what has happened and what the implications are.

The complaints manager I spoke to agreed that their blanket "treat every debt the same" process and the letter was probably inappropriate for a debt of 20p and asked me to pass on her apologies for the upset caused she also agreed to take the issue to their compliance team on my behalf.

The debt was actually caused by a transaction which was cancelled after goods had been returned to a store. For some reason the 20p debt is now shown as outstanding.

Sometimes it is easy and cheap to tweak an IT system. The company I worked with could filter the output of a mailing by running a query on the mail system and extract items of mail which met certain conditions within the letter. These letters would then be sent for investigation/follow-up by a person who could apply the rules sensibly before the mail was posted.

The size of the debt whether 1p, 20p or £5 is not the real issue here. It is whether the regulatory framework is being interpreted and applied correctly by companies. That is what I'm trying to establish.

The minimum cost for sending the letter would be approximately 50p for bulk mail plus the material cost of 4 pages of A4 and 2 envelopes plus IT system and print machine time to create the mailing - possible of the order of 70p per mailing. The company will not recover the cost of the process by recovering small debts of this type.

The company when audited will be able to smile and say look we followed the FCA rules for all debts - even at the cost of upsetting an elderly person and nobody will challenge the company or the FCA from a customer's viewpoint.

That is why I'm "worked up" about a debt of 20p because it shines a spotlight on a possible issue in FCA rules.

I have had some excellent advice in the past from real technical experts on MSE and that is why I thought I would ask if anybody knew what the FCA rule/regulation actually says.

DevCoder

From memory (don't have ago if its slightly wrong)

CONC 7.18 and CCA 1974 87(1)

DevCoder

Apologies, 7.18 is P2P lending, CONC 7.4.1 is more appropriate in conjunction with CCA 87(1) , OFT Debt Collection guidance 3.3f would also back this up.