TSB reduced credit limit with little notice

nickp87 Forumite Posts: 1 Newbie

I'm new to the site and wondering if anybody has any experience with this situation. I took out a TSB credit card 3 months ago and was given a limit of 1k. I have been spending on the card and have 0% purchases for 22 months. I had built up a balance of £920 ish and have never missed a payment on the card. I also have a loan with TSB which I currently owe 1k on with which I have also never missed a payment, and an overdraft which I have never gone into.

The issue is TSB sent me a letter which I received on the 27/8/16 advising me that they wish to reduce my credit limit to £800 from 29/8/16. I phoned them to enquire why only to be told "we regularly review credit limits" blah blah blah. I advised them that I have an excellent banking history with them , as my wages go in every week, I have never gone overdrawn and have a loan with them with which I have never missed any payments, I also advised them that I have never missed any payments on my TSB credit card either so there is no reason for them to need to reduce my credit limit.

After going around in circles I gave in and said ok if it reduces on the 29th you've only given me 2 days notice, and as my balance is around £920.00 if you reduce it to £800 then I will be over my limit, but not by my own fault, by them. So I asked her if they will start charging me over limit fees and she said yes. Obviously I was furious at this so she spoke to another team to see if she could get them to leave my limit at what my balance is so I don't get any charges. She came back to me and said they told her if my limit is still above £800 by the time they reduce it I will get overlimit fees. So I have raised a complaint and I am waiting for them to get back to me with their response.

I am really irritated with TSB and I feel this situation is completely unfair, they are basically forcing me into arrears by reducing my limit below what I owe them and for no reason.

To summarise...My limit was 1k, spent £920 ish, they wrote to me to reduce limit (i got letter on 27/8/16) limit was due to be reduced on 29th (so 2 days notice). I think it is absolutely ridiculous that they expect me to just pay £120 off my card with 2 days notice. They had no reason to reduce my limit as I was using it and secondly I have absolutely no adverse history with TSB whatsoever.

What I would like to know is how do I stand as a consumer when the bank are basically forcing me into a position where they are reducing my limit below my balance with 2 days notice and forcing me to end up with overlimit fees, through no fault of my own. I am waiting to see what happens with my complaint, but if TSB can treat me like this when I am a good paying customer then it wouldn't surprise me if I'll end up having to go to the ombudsman. Can anyone advise me if TSB are breaking any rules by doing this? I could completely understand if they wanted to reduce my limit if I wasn't using it, or if I was missing payments, but neither of these are the case and I feel they are only doing this to force me into an adverse situation where they will start charging me fees for being over my limit despite it being their fault.

If anyone can advise me on this I would be very grateful.



  • molerat
    molerat Forumite Posts: 30,450
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    What they have done is perfectly legal and within the T&Cs. It is unfair though and a complaint is justified. I expect they will waive any charges providing there is no more spending on the card. When did you spend to take you over the new limit, was it one large spend ?
  • chattychappy
    chattychappy Forumite Posts: 7,302 Forumite
    All very silly, I agree.

    First of all, they are entitled to reduce your limit and CCs typically do this with little notice. The T+Cs provide for this and if they did give more notice then some cardholders would rush out to spend.

    Who knows why they have decided to do this. It could be a policy thing, could be an error on your CRA file (worth checking), could be an IT error (as happened with Halifax a few years ago and eventually people were able to get their limits restored).

    I would get a written complaint in now and see what happens. I would skip the stuff about being a perfect customer etc etc. Just stick to the unfairnes of reducing your limit to below the current balance and their claim that they are then entitled to apply charges. Despite your complaint, if they really do apply the charges, then dispute them. I can't see they wouldn't refund them. I suppose more worrying would be any negative CRA reports they might make. I think you'd be entitled to complain but it can be a palava to get these things reversed.

    In the meantime don't put new spend onto the card until it is below the new limit.
  • Ben8282
    Ben8282 Posts: 4,821
    1,000 Posts Combo Breaker Newshound!
    edited 1 September 2016 at 5:23AM
    I think it is grossly unfair to give a 22 month 0% purchase card and then reduce the credit limit below the balance only 3 months after opening the account with no explanation and apparently no adverse conduct on the account.
    The initial credit limit was low only 1k so they can hardly expect you not to use most of the credit limit at 0%. To then reduce the credit limit to £800 on 2 days notice 3 months after opening the account so as to put you over your credit limit causing you over the limit fees, adverse credit reporting and a loss of the 0% promotional rate is really unacceptable.
    Obviously, they can decline to extend you further credit and close the account to further spending, but having extended you the credit in the first place and you having made the purchases in good faith of having 22 months at 0% and having not breached the credit agreement in any way, I can't really see that they can do this to you.
    And they have done all this for the sake of £200 credit limit? This doesn't make sense. If they are so spooked about something that they have taken this drastic action ....

    Suggested course of action
    : Using currently unused overdraft facility if necessary, repay credit card down to below the new credit limit. Do this IMMEDIATELY if you have not already done so. DO NOT give them the opportunity to say you exceeded credit limit or otherwise breached any of the T&C's of your account, EVEN IF NOT YOUR FAULT. It is far easier to complain about your treatment after the event in the position of somebody who is able to find £120 to pay them and has laughed at their silly attempt to do this to you, rather than have to beg them to restore promotional rate etc and get things sorted with your credit files.
    I believe you have very valid grounds for complaint and am not being horrible to you. This is the best advice.
  • GingerBob_3
    GingerBob_3 Forumite Posts: 3,659 Forumite
    This just goes to show what utter scum the banks are, generally speaking. Light, inappropriate regulation has allowed them to get away with stuff like this, which is essentially a scam - even if it is in their T&Cs.

    OP - when you're sorted out and in a position to do so (i.e. you've opened another credit card) cut the TSB card such that it has a sharp point and send it back to them with a covering letter explaining what they should do with it. Then brief against TSB at every opportunity.
  • djpailo
    djpailo Forumite Posts: 550
    Part of the Furniture 500 Posts Combo Breaker
    I don't understand how banks are allowed to do this. Why isn't there a 30 day notice requirement in law? This seems like a deliberate ploy to make money.
  • Snowedunder
    Snowedunder Forumite Posts: 200 Forumite
    I have had a basic Lloyds Credit Card for years which has never had any problems. I only use in an emergency and was gradually paying this off. (by more than minimum payment). Nothing untoward in my credit files, or any recent problems except that I turned 70 in July.

    Soon after, out of the blue I received a letter reducing my limit to what was outstanding (1500.00) well under limit. The date of this action - the day the letter was Written - allowing no time whatsoever - not an email, but snail mail which took a week to reach me. Usual explanation blah blah.

    This 'could' have caused untold embarrassment had I tried to use the card.

    As you say a law unto themselves and totally void of any kind of human behaviour.
  • PeterLWilson
    PeterLWilson Forumite Posts: 54 Forumite
    If I were in this position I think I would communicate with TSB via Twitter (@TSB), and continue to post updates even if they try to force you to write to them or call. That way not only are you querying the change, you are doing so in a manner that potential customers can view. This would be very bad PR for TSB if they ignored or fobbed you off, and they are probably going to be far more likely to take steps to remedy your situation.
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