complaint to halifax

andywandy

Hi guys, I'm new to the forum and wanted some advice on my credit card issue.


I have a direct debit set up for the minimum payment on my halifax credit card, from my halifax bank account.

However, for some reason Halifax failed to take the minimum payment from my account and instead only deducted 5 pounds. (the minimum payment should have been around 12 pounds to cover interest and the 1% of my balance).

In my Halifax contract it states a minimum payment is 1% of the balance plus interest. However only 5 pounds was taken (I have quoted the contract below)

"2.1 - You must make a minimum payment by the payment date every month of an amount equal to the total of interest, any charges payable under condition 7.1, 7.2 or 7.3 and 1% of the balance shown in your statement (minimum £5, or the full balance if less than £5)."

There were sufficient funds left in my student current account (The one the direct debit is linked to) However the wrong amount was taken.

I rang the bank after the 5 pound payment was taken and the Lady I spoke to confirmed my payment was made successfully for that month (I always like to double check everything is okay) and she confirmed it was. A few days later a 12 pound charge was added to my account because the interest (which should have been taken by direct debit under my minimum payment) caused me to go over my 500 pound limit. I contacted the bank and the interest and 12 pound charges were refunded.

I assumed this would be the end of the matter, however it wasn't for two reasons.
1) Through no fault of my own (wrong amount taken by direct debit) I was reported as being around 15 pounds over my credit limit to the credit reference agencies (12 pounds charge and interest) as I should not have been charged this as the money should have been taken by direct debit I feel this is incorrect as it will affect my credit rating negatively and reduce my ability to obtain future credit which is horribly unfair as the whole point of me applying for a credit card was to improve my credit rating.
2) My minimum payment for this month according to online and mobile banking is almost 30 pounds. Although I will be able to afford this through my student loan, this amount is taking in to account the 12 pound charge which I should not have received.

Also to anyone wondering, I have a part time job but didn't work over christmas, so I used my card to buy stuff and will repay the balance upon returning to university in a weeks time

Was I right to lodge the complaint? What will the likely outcome be?

edit: thought i'd update my post to inform everyone the Halifax haven't responded to my complaint. it was made on Friday online, it says they will respond between 8 am and 8 pm ASAP, how long does it usually take, I assume they only respond monday to friday

SuperHan

What are 7.1, 7.2, 7.3?

I'm not particularly au fait with interest calculations as I have always paid my CC in full, but were you carrying a balance on the statement before this one?

I would imagine that they only take the interest as part of the minimum payment the month after the interest is applied. The statement has to tell you exactly how much your DD would be, and they wouldn't know how much that was as you could make additional payments and reduce the interest between the statement and DD date.

I imagine on your next statement you will be required to pay the £5 + interest + £12 over limit charge (the £30 you quote), but the £5 was correct in this instance. Halifax probably refunded as a goodwill gesture, as banks almost always refund your first mistake.

andywandy

7.1 -We will charge you £12 if you do not make at least your minimum payment by the payment date.

7.2 - We will charge you £12 if you are over your credit limit at any time during the period covered by your statement.

7.3 - We will charge you £12 each time a direct debit, cheque or other payment order you have given us is not accepted when we present it for payment.

7.4 - Conditions 7.1 to 7.3 will apply where we let you continue to use your Card (if we do let you) despite you having broken these conditions.

7.5 - We will also charge reasonable costs and expenses resulting from you breaking these conditions.

(I copied across the other two, as they seem relevant)

edit: I'm new to the forum so have no idea how to send you the message as a response so I just copied them onto the thread sorry.

The thing is i've only had credit cards for a few months as I'm 20 and feel really hurt my bank would do this to me. I have funds to pay 250 off my card this month, however my father has advised me not to until my statement is produced.

andywandy

Although I understand I broke 7.2 by going over my credit limit, if the direct debit was taken properly for the minimum amount I wouldn't have breached my credit limit. to me it seems clear a min payment is 1% (max of 5 pounds on a 500 limit card) plus interest or fees. they only charged me 5.00 exactly.

is this there fault or am I missing the point here. I am fairly new to credit cards

SuperHan

I've edited my original reply as it posted before I meant it to! Please see above.

And copying them on to the thread was the correct thing to do

If you carrying a balance are so close to your limit, it may be worth paying off the £250 before the statement date as it will reduce your interest charge next month.

andywandy

so why was this months payment (the one where they only took 5 pounds correct) surely it was meant to be for 5 pounds plus interest? thanks for your help by the way!

also as the 12 pound charge was refunded why is it being included in my next statement as a minimum payment (although irreverent as I will be paying way more)

SuperHan

As I said in my above (edited) post, I think they will only add the interest to your minimum payment after it has hit your statement (or they wouldn't know how much it would be).

Someone may be along to correct me, as I have never been charged CC interest, so I could be wrong.

As an aside, it is always worth keeping a buffer between your limit and your balance, for reasons just like this.

SuperHan

So basically, your minimum payment will be:

1% of the balance of your statement
Any charges on your statement
Any interest on your statement

If it's not on your statement, they won't charge you for it.

As the interest was only added to your account after the statement was generated, it won't make up part of your minimum payment.

This is just my understanding though, someone will come along and confirm or correct shortly no doubt.

andywandy

I kind of get it, I know very little about cards so I assume you are right. However it does seem kind of harsh when
a) the women on the phone the day the DD went out didn't bother to tell me my interest would breach my credit limit, and
b) everything was 'great' till next month' as she put it...
I assume there is some fine print in the T&C's somewhere that they can do this unfortunately. Will my credit score take a major hit, would it stop me applying for new credit in the future?
also If my limit was higher I would keep a buffer, but a 500 pound limit is low (student Card) I only use the card in the holidays as when I return to my dads I don't work part time so I rely on the card)

andywandy

update: halifax rang me back and I asked to speak to a manager, he listened to the phone calls and agreed the customer service agent heavily implied my account was in good standing for a month as long as I made no purchases for that month as I was at my credit limit, therefore she is to blame I suppose. The manager offered me 5 pounds credit, to which I refused, where should I go now? My credit score has taken a hit, this is worth much more.

My dad recommended instructing a solicitor but this seems over the top.. any advice would be appreciated.

edit: it states in the contract 'unless informed otherwise you must make the payment each month' (paraphrased) as I was informed 5 pounds was the right amount/enough for the month, surely they are in breach of contract

YorkshireBoy

andywandy wrote: »

The manager offered me 5 pounds credit, to which I refused, where should I go now?

You wait for their final response letter and then go to the Financial Ombudsman if you're not happy. I assume you told them clearly and concisely what you expect them to do?

My dad recommended instructing a solicitor but this seems over the top.. any advice would be appreciated.

My advice would be not to listen to your dad. Normally dads speak a lot of sense, based on wisdom gained over many years...but not this time!