MBNA credit terminated with immediate effect?

Dma76

Hi,

Posting on behalf of my mother. She is a pensioner and applied for an mbna card with a 0% spending offer. She has cash in the bank and a good credit history, only other credit is a barclaycard which has a zero balance. MBNA granted her the card, she used it and was servicing the card for about 4 months when she logged onto the app to pay only to discover a message saying she had no accounts.

She contacted live chat who refused to discuss the matter. The next day she received a letter stating they had reviewed the information on the application (Which I hasten to add was correct and legitimate) and had decided to terminate the agreement with immediate effect due to credit scoring because they shouldn't have offered the product.

We are a touch baffled by this because obviously they are still going to want the money repaying but they have left her with no access to service the account. The balance is circa £2500 which she was intending to pay off before the interest fee period ended late 2025.

Also we assume they will be charging interest now they have essentially wiped out the promotional rate.

I've done some digging and from what I can ascertain they should have provided 7 days notice for a non defaulted account that was up to date and in good standing according to the consumer credit act.

I'm appalled that they have done this to be honest because essentially it has put her into debt and will no doubt affect her credit rating which was approx 900. (Yes, I know it's not real).

She has tried calling but they won't discuss it so I have advised her to send a recorded delivery letter of complaint mentioning the consumer credit act and to request both the agreement and the original application form via recorded delivery

Has anyone ever experienced this before?

Edit: Apologies, wrong thread, I've asked for the post to be moved.

sourcrates

Yes, credit card companies can withdraw the offer of an account at any time.

They will have seen something on her credit report they don`t like, I will move this to credit cards for you.

eskbanker

Dma76 said:

She has cash in the bank and a good credit history, only other credit is a barclaycard which has a zero balance.

[...]

The balance is circa £2500 which she was intending to pay off before the interest fee period ended late 2025.

[...]

I'm appalled that they have done this to be honest because essentially it has put her into debt

Surely she spent £2,500 on credit and so put herself into debt, albeit in the understandable belief that she'd have plenty of time to repay this on agreed terms - obviously the card withdrawal is inconvenient and worth pursuing, but putting that aside, does her cash in the bank allow repayment?

Has she checked her credit files (all three) to see if there's anything unexpected there that may have spooked MBNA?

Dma76

eskbanker said:

Dma76 said:

She has cash in the bank and a good credit history, only other credit is a barclaycard which has a zero balance.

[...]

The balance is circa £2500 which she was intending to pay off before the interest fee period ended late 2025.

[...]

I'm appalled that they have done this to be honest because essentially it has put her into debt

Surely she spent £2,500 on credit and so put herself into debt, albeit in the understandable belief that she'd have plenty of time to repay this on agreed terms - obviously the card withdrawal is inconvenient and worth pursuing, but putting that aside, does her cash in the bank allow repayment?

Has she checked her credit files (all three) to see if there's anything unexpected there that may have spooked MBNA?

Yes, she has more than enough in the bank to cover it, that's not the point. The point is they offered a 0% and then pulled the plug, so technically no, she didn't put herself into debt because the card would have been paid before the offer ended. I have no doubt that interest will now be applied unless she pays the entire balance immediately.

Yes, all three reports are absolutely clean. Or at least they where until this incident.

Dma76

sourcrates said:

Yes, credit card companies can withdraw the offer of an account at any time.

They will have seen something on her credit report they don`t like, I will move this to credit cards for you.

Thanks Sourcrates.

eskbanker

Dma76 said:

Also we assume they will be charging interest now they have essentially wiped out the promotional rate.

Dma76 said:
I have no doubt that interest will now be applied unless she pays the entire balance immediately.

She shouldn't need to be making assumptions - what did the letter say about repaying the balance and the interest rate?

Nasqueron

What income was declared (specifically income, not say interest from savings which could be spent tomorrow) and what job did you put down? 

Dma76

eskbanker said:

Dma76 said:

Also we assume they will be charging interest now they have essentially wiped out the promotional rate.

Dma76 said:
I have no doubt that interest will now be applied unless she pays the entire balance immediately.

She shouldn't need to be making assumptions - what did the letter say about repaying the balance and the interest rate?

Absolutely nothing, other than if there is an outstanding balance she will be rquired to pay it. Very helpful, I know.

Dma76

Nasqueron said:

What income was declared (specifically income, not say interest from savings which could be spent tomorrow) and what job did you put down? 

She put retired and her income as £24,000 pa which is a combination of her private pensions and state pension plus a percentage of my late fathers pension.

Dma76

Is this not relevant as seen as the account was in good standing, should they not state the reason for their decision, or is futher checks sufficient?

Where a regulated open-end consumer credit agreement, other than an excluded agreement, provides for termination or suspension by the creditor of the debtor's right to draw on credit—

(a)to terminate or suspend the right to draw on credit the creditor must serve a notice on the debtor before the termination or suspension or, if that is not practicable, immediately afterwards,

(b)the notice must give reasons for the termination or suspension, and

(c)the reasons must be objectively justified.

Nasqueron

They have advised you why - they made an error in giving her the card because of some secondary checks they did.

Your letter should explain what happens to the balance and how they expect it to be repaid, I would hope they would not demand it all up front given it was their error and she used it in good faith.