Risk Based apr increase

Pnx69693

Please move in incorrect thread!.

Hi all, thank you in advance for any information.

Several months ago my catalogue company wrote to me due to Bank of England interest rate increase and how I’ve been managing my account (no late payments) that they are increasing my APR from an already hefty 38.8% to a whopping 69.9% I emailed/phoned/and complained that I do not wish to go ahead with this increase, so they advised me that they are allowed to increase the Apr given 60 days notice. 

However they said they will apply the new rate after the 60 days and I’d I don’t like the new rate I can pay off in full so I won’t be charged the higher.

if I want to I can ask friends or take a loan to pay it off they said, very helpful I know, so what they did in the interim was to reduce my credit limit from £1700.00 to £948 with my balance at the time of £970 and report me to the credit reference agencies for having exceeded my credit limit.

Now I had a letter from my credit card company stating a similar thing, but they said I can refuse the increase and loose access to spending further on the card but the Apr will be charged at the current rate and no increase will apply.

now I understand that the catalogue and the credit card may come under different credit rules, but im wondering now if the catalogue company acted incorrectly and are making an handsome profit from this, if it wasn’t for destroying my credit file for 6 years I’d let it default and let them sell it to a debt collection agency to stop any further interest!

any advice would be greatly appreciated.

DullGreyGuy

Outside my area of expertise I'm afraid but looking at the lending code for example it talks about rejecting interest rate changes exclusively in the context of credit cards and not other forms of rolling lending like overdrafts or store credit.  The code however is from the LBS which are a self regulating body and not primary legislation. 

CCA 78A also just says the lender must inform the debtor in advance of a change in rate (unless index linked etc) but doesnt say anything about a right to refuse

molerat

I would raise a formal complaint over the reduction in your limit to below the existing balance and reporting that to the CRAs.  But as above there may not be much you can do much about the rate increase unless the credit is considered a "store card" which I believe comes under the credit card rules.  I think you need to dig out out your T&Cs.

born_again

Pnx69693 said:

Please move in incorrect thread!.

Hi all, thank you in advance for any information.

Several months ago my catalogue company wrote to me due to Bank of England interest rate increase and how I’ve been managing my account (no late payments) that they are increasing my APR from an already hefty 38.8% to a whopping 69.9% I emailed/phoned/and complained that I do not wish to go ahead with this increase, so they advised me that they are allowed to increase the Apr given 60 days notice. 

However they said they will apply the new rate after the 60 days and I’d I don’t like the new rate I can pay off in full so I won’t be charged the higher.

if I want to I can ask friends or take a loan to pay it off they said, very helpful I know, so what they did in the interim was to reduce my credit limit from £1700.00 to £948 with my balance at the time of £970 and report me to the credit reference agencies for having exceeded my credit limit.

Now I had a letter from my credit card company stating a similar thing, but they said I can refuse the increase and loose access to spending further on the card but the Apr will be charged at the current rate and no increase will apply.

now I understand that the catalogue and the credit card may come under different credit rules, but im wondering now if the catalogue company acted incorrectly and are making an handsome profit from this, if it wasn’t for destroying my credit file for 6 years I’d let it default and let them sell it to a debt collection agency to stop any further interest!

any advice would be greatly appreciated.

You can see their point of view. You are not happy are not happy with the new rate, which they can set as per their T/C. So with not being privy to the full conversation, I am guessing that the increase is going to be hard to pay? Given the mention of  "managing my account" they have concerns about your ability to pay.
If they get a hint of this, then their actions are in your best interest. As well as protecting them from non payment of debt.

They should not have reduced it below your balance, but maybe they are judging that on the balance after your next payment, which would mean it is not reported to CRA.

With the CC, if you take the offer of "No spend" then that will place a marker on your CRA. As well as they will close it when debt paid off.

I'm again guessing, but they have picked up that your income is not enough to cover your outgoings.

If you are having issues paying these & any other credit.
Then please pop to debt board & do a statement of affairs & you will get non judgemental advice on the best way forward.