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Is this legal? (credit balance reduction)
nancykwan
Posts: 8 Forumite
in Credit cards
Had my C/C company reduce my credit limit recently, despite my credit rating being decent and the fact that I pay more than the minimum each month.
Fair enough, many may say. In fact I don't have a particular issue with them dropping my limit per se.
However, they have lowered my limit to an amount below the outstanding balance, and have threatened me with extra charges due to being over the limit.
Surely this is unlawful?
Frankly, I'm absolutely livid about this.
Fair enough, many may say. In fact I don't have a particular issue with them dropping my limit per se.
However, they have lowered my limit to an amount below the outstanding balance, and have threatened me with extra charges due to being over the limit.
Surely this is unlawful?
Frankly, I'm absolutely livid about this.
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Comments
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I am pretty sure than can do this, but it is very bad practice, I would phone them up and say you are happy to reduce it to above you current balance, they should play ball.
Of course you could take your business elsewhereHave my first business premises (+4th business) 01/11/2017
Quit day job to run 3 businesses 08/02/2017
Started third business 25/06/2016
Son born 13/09/2015
Started a second business 03/08/2013
Officially the owner of my own business since 13/01/20120 -
I doubt it is unlawful as if it was you could keep a card maxed to prevent them from ever cutting your credit limit if it was unlawful. It is certainly disgraceful to threaten charges in this situation however. It would be worth complaining to the financial ombudsman with this once you have exhausted the company's internal complaints procedure.There's no sense crying over every mistake.
You just keep on trying till you run out of cake.0 -
They are entitled to reduce your limit (depending on what is in your terms - they may have to give you notice).
If they try to charge you for going over your limit when that situation was ##entirely## due to them reducing the limit, and not to any additional spending or any breach of terms by you, then, regardless of what might be said in the terms and conditions, you should reject them and escalate the issue as far as necessary until they are refunded.
All consumer contracts have to pass the "reasonableness" test specified in various pieces of legislation including The Unfair Terms in Consumer Contracts Regulations 1994 http://www.legislation.gov.uk/uksi/1994/3159/contents/made.
Any contract that allows a card provider to charge effectively every customer an overlimit fee just by unilaterally reducing their limit would clearly be classed as an unfair term and be struck out by the court.We need the earth for food, water, and shelter.
The earth needs us for nothing.
The earth does not belong to us.
We belong to the Earth0 -
Thanks for the replies. I received a multitude of letters yesterday, all from the same credit provider but with three different names on them.
I believe that this is a usual tactic, to confuse the customer, however I will write to only ONE individual within that organisation (the one who started the ball rolling) and have told them so, in writing.
As one of these letters mentions that they will be applying charges for 'going over the *agreed* limit' (sorry but I haven't *AGREED* to any such arrangement!), then I think it's fair to say that it's Game On. These people don't intimidate me.
I'll let the forum know how this progresses.0 -
I think you have a very strong case as long as the overlimit couldn't be avoided by not spending on the card.
At the end of the day if this was 100% above board and legal without recourse, any credit card company could make themselves a mint whenever they felt like it by purposefully decreasing the limits on thousands of accounts for the sole purpose of raking in fees.
Good luck Nancy
Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
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Sorry for the very late reply.
Anyway, the CC provider admitted liability (?) and they have reinstated my limit.
Perhaps the words "I now consider this account to be in dispute" may have helped
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Congratulations and thanks for the update :TSorry for the very late reply.
Anyway, the CC provider admitted liability (?) and they have reinstated my limit.
Perhaps the words "I now consider this account to be in dispute" may have helpedAre you for real? - Glass Half Empty??
:coffee:0 -
Sorry for the very late reply.
Anyway, the CC provider admitted liability (?) and they have reinstated my limit.
Perhaps the words "I now consider this account to be in dispute" may have helped
Damn right, too.
Glad it worked out in your favour :beer:Cashback Earned ¦ Nectar Points £68 ¦ Natoinwide Select £62 ¦ Aqua Reward £100 ¦ Amex Platinum £48
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Do make sure their automagic systems haven't automagically left a marker on your credit rating for the time you were technically over your limit. If they have, they should remove it, so worth checking.Sorry for the very late reply.
Anyway, the CC provider admitted liability (?) and they have reinstated my limit.
Perhaps the words "I now consider this account to be in dispute" may have helped0
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