Help! Can you refuse to pay CC charges in the first place?

NickX

Right there are 2 ways of looking at this - a moral one, and a legal one.

Morally, I think the OP knows that the debt is his and on that basis should make some inroads to pay it. However I would then question the morality of the Credit Card company adding charges which make a £1 debt into a £200 debt.

Legally, the Credit Card company has the right to add charges as per its Terms and Conditions. These charges may possibly eventually be deemed as illegal but this is dependent upon a test case and we do not know precisely how these charges have been generated in this particular case.

Legally the OP has the right to dispute the debt and there are legal technicalities which may mean that it can be set aside, for example if the original CCA cannot be produced.

This situation has come about because of a lack of communication and the blame for this lack of communication could be attributed to either side. Personally I think the OP has good chance of disputing this - they have not made any efforts to collect this debt in 2 years. If he is really that concerned about the effect of a £1 default on his credit file then they may well accept a full and final settlement figure particularly as they haven't seen a penny for 2 years. They MAY accept something like 30% of the amount that they are asking, but if he is going into negotiations with them, I would advise that he requests the original CCA before admitting any liability for the debt. If they can't supply that then they have no case.

I know a lot of people will see what I am writing as immoral, but it is the way the law works - its not fair and sometimes loopholes are there to be taken. Again, I can see nothing moral about adding charges to a £1 that result in a 20000% increase in the original debt.

NickX

Paul_Herring wrote: »

Not even my last sentence?

They suddenly stopped receive statements, and, by the looks of it, failed to have any sort of mail-forwarding, not even with the new owner of the old address, and somehow it isn't the CC company's fault?

I don't agree with you here no. This extra £1 is Residual Interest which occurs after a Credit Card is paid off. This query on Residual Interest comes up all the time on these boards, people just don't realise that they have to pay off 2 consecutive statements to completely clear the debt.

In this case the OP thought he had paid and closed the card. They don't always send formal letters of closures, and they will often stop statements if there is no balance on the account. The OP thought the debt was paid and the account closed. On this basis, he was not obliged to provide them with a forwarding address. He didn't realise he still owed a £1 - all they had to do was call his mobile and say "Oh there is still a small balance on your account" but they didn't bother and cruelly let the debt escalate in an exponential manner.

At the end of the day the CC company are the professionals, they are expected to understand these accounts better than the customers (although this isn't always the case), and I feel that they have behaved equally if not more incompetently that the customer in this case.

Paul_Herring

NickX wrote: »

they have not made any efforts to collect this debt in 2 years.

But they have - they've been sending statements to the old address.

Might this have something to do with the fact that the OP didn't update their address, nor made sure that the CC company had their new address in the two years?

I know a lot of people will see what I am writing as immoral,

No - I see it as illegal. The debtor is aware of the debt, and you're proposing that they ignore it for another four years (trashing their credit history in the process) because they've moved and the company doesn't have their new address.

Of course, the risk with this strategy is that they eventually catch up with them 5 1/2 years down the line when the amount owed is a lot more than £200, and they are taken to court. Bearing in mind of course that when they do contact them, the 6 year clock resets.

On another note, would you propose the same solution if the original sum in question was £10? £1000? £10,000? If the answer is no, where exactly is the cut-off point?

Legality/morality of the excessive charges based on the size of the original amount are another matter, and for which I fully understand and empathise with the OP's position.

neverdespairgirl

NickX wrote: »

These charges may possibly eventually be deemed as illegal but this is dependent upon a test case and we do not know precisely how these charges have been generated in this particular case.

.

I think you may be confusing credit card charges with bank overdraft charges?

The test case relates to the latter, and the OP's query is about the former.

NickX

Paul_Herring wrote: »

But they have - they've been sending statements to the old address.

Might this have something to do with the fact that the OP didn't update their address, nor made sure that the CC company had their new address in the two years?

No - I see it as illegal. The debtor is aware of the debt, and you're proposing that they ignore it for another four years (trashing their credit history in the process) because they've moved and the company doesn't have their new address.

They have been sending statements to the OPs old address. Now, usually when a CC bill is late, they are on the phone within a few days demanding a payment. I wonder why this didn't occur in this case, could it be that for a £1 it wasn't worth the call, but if they could escalate it to £200 then it would be a better strategy for them ?

As I said earlier, the OP was under impression he had paid the card off, why would he provide a forwarding address if he didn't believe he owed them any money ?

For the record I haven't actually advised him to just ignore the debt for another 4 years, I am just warning what the implications are of admitting liability for the debt at this stage.

Non payment of debts is not illegal. If it were you could report any debtor to the police. Every member of the population has the right to dispute any debt or request for payment with which they are presented. There is nothing illegal about this. Only if a court judgement is made could and sort of legality be placed upon repaying a debt.

With regard to trashing his credit history we do not know what has been reported to the Credit Agencies, this may be something that the OP wants to check out, but in the case of a dispute once resolved the customer can request that alterations to their Credit Report be implemented.

There are 2 sides to this case, and my experience tells me that the OP has a good case, but many people would feel more comfortable not getting into a confrontational situation with the Credit Card Company. It really depends how strongly the OP feels about the particular situation.

NickX

neverdespairgirl wrote: »

I think you may be confusing credit card charges with bank overdraft charges?

Fair point, the test case is regarding Bank Charges. However, I think that the result will have a strong bearing on how Credit Card charges are dealt with in the future aswell.

NickX

Paul_Herring wrote: »

On another note, would you propose the same solution if the original sum in question was £10? £1000? £10,000? If the answer is no, where exactly is the cut-off point?

Each situation is different, and admittedly I do not know all the facts relating to the OP. But the amount is irrelevant really, it is the sequence of events and basis for putting forward a dispute that counts. I know of one situation where an individual had Credit Card debts of £84000 set aside.

purplezebra_2

Hi Everyone,

Just wanted to say that you for all your replies. I wrote to the credit card company explaining the situation, and they have credited my account with the full amount that was outstanding!