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Hi all. good luck with your claims. here is the letter and response that I sent/received from OFT regarding EGGs claim that the OFT are their best friend.(in their words).
dear sir.
I wish to make a formal complaint in respect of Egg plc. who have sent me a
letter in response to my claim in which i state that they have been unfair in
their charges to missed payments and fines.
Egg claim to have negotiated special terms with the OFT, which suggests they
have your approval to charge £16.00 to each and every customer for each and
every missed payment and that because they have reduced their charge from £20.00
to £16.00 the OFT have agreed not to take any action against them. Is this true?
that the OFT and EGG have an arrangement?
I am shocked that EGG have taken this stance and feel they are abusing their
position and attempting to frighten me into dropping my claim.
I am sure that you are aware of this matter and would be grateful for a
response. I am aware of the statement that the OFT have recently made via a
press release and see no such arrangement.
I would therefore, be grateful for a response to my complaint.
(signed and addressed)
RESPONSE
Thank you for your e-mail about the charges imposed by Egg for missed payment.
You ask whether Egg has an arrangement with this Office that we will not take
action against them as they have reduced their charges from £20 to £16.
I should explain that the £12 threshold for intervention is not a price cap. We
are not saying that default fees should be set at £12 or that a court will
consider a default fee to be fair just because it is at or below £12. We expect
and are calling on the market to apply the principles of fairness set out in our
statement, which leave room for different levels and models of charging provided
they are based on limited administrative costs, and to recalculate their own
fees In line with its current enforcement policy, the OFT will investigate the
fairness of any fee set above the threshold. In limited exceptional cases, a
card issuer may be able to show that it is fair and consistent with the
principles set out in our statement to charge higher default fees.
In relation to Egg's claim that we have approved a charge of £16, that is not
exactly the case. What we have said in our statement of principles at para 1.6
is:
On the analysis we have undertaken we have concluded that generally credit card
default fees have been set at a significantly higher level than is fair for the
purposes of the UTCCRs. The level of a fair fee will, however, be dependant on
the precise business circumstances. Some exceptional factors, for example
whether a card issuer requires (not merely allows) customers to give it direct
debit authority to ensure a minimum payment is made, may lead to a lower level
of instances of default. A card issuer operating a policy of this kind may be
able to justify a higher level of default fee than one that does not because its
relevant business costs are being recovered from a proportionately smaller
number of defaults. However, even in the circumstances of this kind the card
issuer may only recover the relevant limited administrative costs arising out of
those defaults.
In other words there may be circumstances in which a charge in excess of £12
will be considered fair by a court if it can be shown to have been calculated in
line with our principles and a true pre-estimate of the costs they have entailed
in recovering losses.
In this context, we are grateful for the information that you have provided and
we have logged it on our records in order to further our understanding of this
market.
I received the same response, as did a few others. I feel it shows Egg dirty-tricks cmpaign off to a tee and I will be submitting it as part of my court bundle (which I am busy preparing as we speak).
response from OFT re: EGG charges
plc. who have sent me a
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