Unlawful Penalty Charges

rollo321

Hi there,

Apologies if this has already been answered somewhere, but I'm hoping someone can point me towards where I can read more on unlawful penalty charges on loans and credit cards? The only information I can seem to find relates to payday lenders.

To summarise; when I was 18 I did the stupid thing of getting credit and not paying it back. 2 credit cards were defaulted with balances of about £300 each, and similarly a loan of approximately £1600 remaining balance.

The credit cards have since been satisfied however the default balances of £440 and £490; an increase of £140 and £190.

The loan was for £2000 originally; as mentioned the remaining balance was approximately £1600; however by the time it was passed to Capquest the total repayable is £3770, an increase of over £2000.

Can anyone let me know if these increases are considered lawful, and if not point me in the direction of some reading and guidance on how to get the unlawful component written off or how to complain about them?

Really grateful, thanks.

Gazzafatcityboy

what was the increase for?

rollo321

I genuinely don't know; I'm presuming it was default/late payment fees. It's just that the amount of fees and additional charges is about 50% of the balance.

antrobus

rollo321 wrote: »

I genuinely don't know; I'm presuming it was default/late payment fees. It's just that the amount of fees and additional charges is about 50% of the balance.

You're going to have to find out.

Don't forget that interest will be factor. If you have a credit card with a balance of £300 and an APR of 30% it will easily turn into a debt of £450 if you don't make payments for 18 months.

National_Debtline

Hi

A good place to start is requesting a full statement of the account so that you can see exactly what the increases were for. As antrobus says, it may simply be interest accruing on the debts.

On the subject of adding fees for debt collection the Consumer Credit Sourcebook says:

CONC 7.7.2R01/04/2014
A firm must not claim the costs of recovering a debt from a customer if it has no contractual right to claim such costs.
www.handbook.fca.org.uk/handbook/CONC/7/7.html

In terms of complaining, you would need to make a written complaint to the debt collection agency initially and then escalate it to the Financial Ombudsman Service (FOS).

James
@natdebtline