Barclaycard claiming for credit card debt from my deceased fathers estate

peterelliott72

Hi - hoping for some advice - my father died suddenly in January of this year and wasn't until I was trying to sort his estate that I knew of a credit card he had had for over 20 years. He wasn't savvy with bank cards (always preferring to withdraw cash) to pay for stuff. I have found out that he died with an outstanding debt of about £4,500 - which had been accumulating over the years as he was using the card like a cash withdrawal card. You can imagine the interest charges on this and when it reached over 11,000 they stopped the card and changed it to an agreed repayment - but still at a credit card rate of repayment. We have tried to complain to Barclaycard but have said we are out of time as the limit was reduced some years ago. My issue is that I believe this to be irresponsible lending and why it wasn't checked about the use of the card, or why he wasn't offered a loan to repay the debt at a much lower rate of interest.
He was in fact paying most of the debt as interest and the balance would have taken years to recover. He was paying sometimes 2 x payments as he didn't have enough to cover the payment which accounted for between 25% - 35% of his monthly state pension.
I have completely oblivious to this as he was a very private man (something I need to live with) but would appreciate any advice on whether this would be classed as irresponsible lending and if I have a case to raise with the Ombudsman. Thanks for any advice / information

eskbanker

peterelliott72 said:

We have tried to complain to Barclaycard but have said we are out of time as the limit was reduced some years ago. My issue is that I believe this to be irresponsible lending and why it wasn't checked about the use of the card, or why he wasn't offered a loan to repay the debt at a much lower rate of interest.

If you've only just discovered this debt and he'd had the card for over 20 years, then chances are that you won't be party to everything that was discussed between him and Barclaycard over the years, so would find it challenging to make any case of irresponsible lending stick.

If they've stated that a complaint would be timebarred (probably correctly) then the financial ombudsman won't overrule that, even if there was a case....

peterelliott72

My father never used the card to purchase anything, he just kept on taking cash out... but the interest getting applied to the account kept putting him up to his credit limit and Barclay card kept increasing the credit up to a whopping 16k before they stopped it over a 7 year period when he was a pensioner on £891 a month... the interest over this period a far greater then the actual cash he took out..

jlfrs01

Afraid I'm with eskbanker on this one. Barclaycard do not appear to have acted irresponsibly, in fact quite the opposite by stopping your late father's card and putting him onto a repayment plan when he got into trouble. It's not illegal for them to charge a high APR, lots of credit card lenders do and if paying the minimum each month, the balance is certain to build up especially over 20 years.
Barclaycard wouldn't have been able to offer a loan because they don't do them - that would be Barclays Bank which is a separate entity. The options your father may have had were to either carry on paying towards his debt, switch the balance to another lender with a lower APR or enter into a voluntary financial arrangement with Barclaycard. He chose the 1st option but it was his choice and not being financially savvy doesn't mean that Barclaycard have taken advantage of any lack of financial nous.

Is it now the case that Barclaycard are looking to recover the debt from his Estate? Depending on when your late father died, they may be out of time.

IanManc

jlfrs01 said:

Is it now the case that Barclaycard are looking to recover the debt from his Estate? Depending on when your late father died, they may be out of time.

The OP says that his father died in January of this year, and was making payments up to the time of his death, so Barclaycard cannot be "out of time" to claim money from the deceased's estate.

After funeral expenses, debts have the next claim on the value of an estate, and a personal representative is obliged to settle debts before distributing the net estate.

The Op should pay Barclaycard and settle any other debts if there is sufficient value in the estate to do so after the funeral bill has been paid, then distribute the remainder according to the Will or the Intestacy Rules.

eskbanker

peterelliott72 said:

the interest over this period a far greater then the actual cash he took out.

You're not the first and won't be the last to say this as if it's significant, but it really isn't - debt arising from interest is no less valid than that from originally incurred amounts (assuming it was added in line with product terms), so there's no such arbitrary distinction.

jlfrs01

IanManc said:

jlfrs01 said:

Is it now the case that Barclaycard are looking to recover the debt from his Estate? Depending on when your late father died, they may be out of time.

The OP says that his father died in January of this year, and was making payments up to the time of his death, so Barclaycard cannot be "out of time" to claim money from the deceased's estate.

After funeral expenses, debts have the next claim on the value of an estate, and a personal representative is obliged to settle debts before distributing the net estate.

Unless a Section 27 notice was entered in The Gazette in which case any debtors have 2 months, 6 if in Scotland, to get their claims in. When acting as Executor for my late father's Will, this is one of the very first things the Solicitor did as soon as Probate was granted.

IanManc

jlfrs01 said:

IanManc said:

jlfrs01 said:

Is it now the case that Barclaycard are looking to recover the debt from his Estate? Depending on when your late father died, they may be out of time.

The OP says that his father died in January of this year, and was making payments up to the time of his death, so Barclaycard cannot be "out of time" to claim money from the deceased's estate.

After funeral expenses, debts have the next claim on the value of an estate, and a personal representative is obliged to settle debts before distributing the net estate.

Unless a Section 27 notice was entered in The Gazette in which case any debtors have 2 months, 6 if in Scotland, to get their claims in. When acting as Executor for my late father's Will, this is one of the very first things the Solicitor did as soon as Probate was granted.

A Section 27 notice protects personal representatives from debts which come to light after they have distributed what they thought was the net estate. All professional executors will lodge a notice in the Gazette to protect themselves.

However, the OP is aware of the debt, and Section 27 is of no relevance to debts that the personal representative does know about.

[Deleted User]

jlfrs01 said:

Afraid I'm with eskbanker on this one. Barclaycard do not appear to have acted irresponsibly, in fact quite the opposite by stopping your late father's card and putting him onto a repayment plan when he got into trouble. It's not illegal for them to charge a high APR, lots of credit card lenders do and if paying the minimum each month, the balance is certain to build up especially over 20 years.
Barclaycard wouldn't have been able to offer a loan because they don't do them - that would be Barclays Bank which is a separate entity. The options your father may have had were to either carry on paying towards his debt, switch the balance to another lender with a lower APR or enter into a voluntary financial arrangement with Barclaycard. He chose the 1st option but it was his choice and not being financially savvy doesn't mean that Barclaycard have taken advantage of any lack of financial nous.

Is it now the case that Barclaycard are looking to recover the debt from his Estate? Depending on when your late father died, they may be out of time.

This is factually incorrect - Barclaycard is a trading name of Barclays Bank UK PLC.

Barclaycard could have have (and probably should have) offered him a better repayment plan - either at a lower APR or a standard rate loan to pay off the debt. Using as a credit card for regular cash advances is a massive red flag and should have certainly stopped them lending more to a someone only on a state pension.

I would have certainly take this up with Barclaycard as regards the interest incurred / sought.