What are the Rules of persistent debt and closure of credit card accounts

Yardski

The bank closed my credit card facility saying I was in PD. I had made contact with the bank last January to up my direct debt amount and in March, they raised the recommended amount by £7.00. I was unaware of this and in November they closed my account.
I have made a complaint and although the bank are saying they gave me advice and service, they say they are unable to reopen my account. The FCA states banks should not be closing accounts and banks should support account holders but I was not aware of the £7 increase and the bank have admitted they were at fault as they did not give me clear information regarding persistent debt account.  
Please can I have any advice about PD and banking policies around closing accounts..

MattMattMattUK

Yardski said:

The bank closed my credit card facility saying I was in PD. I had made contact with the bank last January to up my direct debt amount and in March, they raised the recommended amount by £7.00. I was unaware of this and in November they closed my account.
I have made a complaint and although the bank are saying they gave me advice and service, they say they are unable to reopen my account. The FCA states banks should not be closing accounts and banks should support account holders but I was not aware of the £7 increase and the bank have admitted they were at fault as they did not give me clear information regarding persistent debt account.  
Please can I have any advice about PD and banking policies around closing accounts..

You have no right to a credit card, the bank can withdraw the facility at any time. 

If the banks deem you to be in persistent debt they are supposed to take certain measures, the definitions of persistent debt are on the MSE link below. 
https://www.moneysavingexpert.com/credit-cards/persistent-debt-help/

They have closed the credit card and you are still required to repay the debt, although they should now be offering a lower rate of interest (or even an interest freeze), you will be unable to borrow further from them and will be unlikely to be able to borrow from them in the future.

It would be wise to use it a trigger point, possibly get yourself onto the debt free wanabee forum on here and see what you can do to get rid of that and any other debts. 

Yardski

Hi Matt and thanks for your reply. 
Can i just clarify a little more. I have had this account a number of years. I have always paid minimum balance amounts and above. I do have a good credit score and didn't realise what Persistent debt was. I understand that the FCA introduced guidelines and i fell within that.
what the issue is that when i approached the bank and raised my direct debt amount  the advisor did not inform me about my persistent debt or neither was i advised about how i could avoid being in that situation. Within 2 months the recommended payment was raised to £127 which i did not know about. 
The bank have said this was due to poor service from them but have still closed my account. I have requested my subject access data to listen to the calls. 
I feel the bank have given me wrong or misleading advice because if i had known i would have raised the DD to £130.
This is why i want to know the rules regarding PD and how the banks should be handling customers as each situation is different.

Batesy1976

Yardski said:

This is why i want to know the rules regarding PD and how the banks should be handling customers as each situation is different.

https://www.handbook.fca.org.uk/handbook/CONC/6/7.html

Enjoy.

MattMattMattUK

Yardski said:

Hi Matt and thanks for your reply. 
Can i just clarify a little more. I have had this account a number of years. I have always paid minimum balance amounts and above. I do have a good credit score and didn't realise what Persistent debt was. I understand that the FCA introduced guidelines and i fell within that.

That requires the bank to take some kind of action, what action, whilst subject to guidance, is up to them.

Yardski said:

what the issue is that when i approached the bank and raised my direct debt amount  the advisor did not inform me about my persistent debt or neither was i advised about how i could avoid being in that situation. Within 2 months the recommended payment was raised to £127 which i did not know about. 
The bank have said this was due to poor service from them but have still closed my account. I have requested my subject access data to listen to the calls. 

What do you hope to hear in the calls? Whilst you might feel it is bad customer service and the bank may even agree, that does not change the issue of persistent debt. 

Yardski said:

I feel the bank have given me wrong or misleading advice because if i had known i would have raised the DD to £130.
This is why i want to know the rules regarding PD and how the banks should be handling customers as each situation is different.

You can read more on the link below, but it does not really matter, you have no right to a credit card, they have the choice to withdraw the facility at any time, their decision has been made and they are not going to reinstate a facility now, it is not in their interest to do so. In theory the guidance says "only suspend or cancel a customer’s credit card where
this is objectively justified", however it is fairly easy to objectively justify cancelling someone's credit card when they only pay the minimum or just above month after month, rather than the odd month here or there.

https://www.fca.org.uk/news/press-releases/fca-tells-credit-card-firms-review-their-approach-persistent-debt-customers

Yardski

Thanks Matt i do understand your advice. It seems then that the banks can misinform customers and then close accounts with any redress to the consumer. Giving wrong and or misleading information should be challenged and I'm sure  somewhere in that document states ‘fairness’.
if i had raised my DD to £130 i doubt i would be in this situation and i would have transferred to a 0 % account to retain this credit card facility.

 

Batesy1976

Yardski said:

Thanks Matt i do understand your advice. It seems then that the banks can misinform customers and then close accounts with any redress to the consumer. Giving wrong and or misleading information should be challenged and I'm sure  somewhere in that document states ‘fairness’.
if i had raised my DD to £130 i doubt i would be in this situation and i would have transferred to a 0 % account to retain this credit card facility.

 

Why didn't you transfer to a 0% account already then?

[Deleted User]

Yardski said:

if i had raised my DD to £130 i doubt i would be in this situation and i would have transferred to a 0 % account to retain this credit card facility.

 

It's very unlikely that would have been an option for you. Minimum payments on an interest bearing debt puts you firmly in the high risk category.

Yardski

Thanks @Batesy1976

Thrugelmir

Yardski said:

i would have transferred to a 0 % account to retain this credit card facility.

 

An indication in itself of juggling rather actually clearing debt. Promotional rate accounts are visible to lenders on history files. 

Yardski

I have different things going on and if truth really be told.. i did not recognise myself as being in a PD situation. I do now know what PD means but at the time I was just paying bills in my own way.. I have had this particular credit card for about 10 years.