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Thought this isn't directly related to charges being unfair i thought people with Egg credit cards on or near their credit limit should be aware of this.
I received a letter the other day from them stating my card was over its limit and to call and make a payment. knowing that it was just under by about £5 and I had cut the card up, this concerned me so I called them to find out more.
"No, you're not over your limit yet" says the woman at Egg. "But you will be when the interest is added."
I pressed for further information. I would have enough funds in my bank account to make this month's payment. What was the problem?
"Ah, well we add the months interest to the account a few days before the payment is taken. Which, being £92, will take you over you limit and incur an additional charge."
What a surprise - an unfair charge. However, is it just me or is this a tad unfair? Do all creadit cards do this? Have I been in the dark all this time? Maybe everyone else was aware of this except me.
I fully intend to claim back the mountain of cash owed to me by Egg, but I think it is unfair that if your card is at its limit or just below you can still go over (and of course get charged) without doing anything wrong.
They're obviously getting a lot of these requests. Very prompt reply via secure messaging at 8:00am the next day, requesting confirmation for payment.
Replied confirming that they could take it from the account.
Message received this morning (24-apr) confirming statements from start of acccount (Apr 2002) will be sent out in 3-5 days. Look forward to seeing how much they owe me!
Yep, yep, yep. B/card does that too. Add interest, if interest takes you over limit, bang: £20.
If you're late even by 1 day, bang: £20. If THAT takes you over the limit, guess what? Yep, another £20.
Don't you just love them? I've worked out that by having 2 B/cards (visa & m/card), on bad months, they charged me £80 charges: 2 x (£2x20). Scary. Still, what's one more unlawful charge between friends?
Apologies to people who I was in the process of helping, I may be gone some time.
I'm glad I spotted mine in time; Virgin Money once set my monthly repayment for the following month at £5.64. The interest to be charged on the account was £113.25. As the balance was £7485 against a £7500 limit... well - you do the math. I'm just glad that VM have a line on your statement which says "Estimated interest next month is:"
I had to make an additional payment to make it all hang together. Their reasoning was that I was just coming out of the interest-free period. No idea why that's relevant and that's the best explanation I got from them.
I'm afraid we're unable to refund any of the charges you've received due to you not running your account in order with the terms and conditions. These charges are stated in your Egg Card terms and conditions which were presented to you before your account was set up, and in turn you signed and agreed to.
Egg has noted the Office of Fair Trading's provisional ruling with regards to default fees on our credit cards and is reviewing its position.
We believe our default charges are fair, clearly communicated in our Summary Box and justified by the costs we incur as a result of customers paying late or going over their credit limit. We require all Egg Card customers to set up a direct debit prior to receiving the card, making their regular payment as easy as possible for them.
We have worked closely with the Office of Fair Trading in its inquiry. We now intend to review the Office of Fair Trading's conclusions and will be in consultation with them over the coming months.
Regards
Cherrelle
ICS
Ok, so point 1 -
"I'm afraid we're unable to refund any of the charges you've received due to you not running your account in order with the terms and conditions. "
That means breach of contract surely. Which means they can only legally claim back costs incurred.
Point 2 -
"and justified by the costs we incur as a result of customers paying late or going over their credit limit"
Excellent. I'm sure they will be happy to provide details of how these costs are incurred and then I will be happy. Oh, hang on - they can't.
I'd really like to reply to this outlining the reasons why their charges are unlawful and emphasising the points above, as it would be interesting to see how they reply. Or should I just send the letter before action now?
How much should I give away in the initial claim (if it gets to that which I'm sure it will)? Should I just do the standard one listed in the library?
The reason I ask is a book I have on litigation says that usually people put as much information as possible on the claim and I have a few items I've found as well to back it up but I don't want to allow them to build up a good defence (if they can defend it!)
One phrase I have read is "there should be no surprises when it comes to court - everyone should know in advance what is going to be said".
The claim itself can contain very limited detail because of the limit on the number of characters. However the allocation questionnaire asks an awful lot of detail, all of which should be supplied - the defendant has as much right to know your case as you have to know their defence. However up until that point you don't want to give them an unfair advantage over you; you're one human being - they're hundreds of legally qualified human beings.
I'm now at the stage where i can send my lba to Egg after receiving a reply to my preliminary request for a refund of all charges.
However, their reply to this is worded a little strangely, and I want to fully understand it before commencing legal action.
The reply is posted in my thread in the Egg forum, but as this may relate to other people I thought I would post this question here in the legalities forum.
It's confusing because they say that they are 'unable to refund any of the charges you've received due to you not running your account in order with the terms and conditions.'
I preusme they mean that they are not refunding the charges because they were taken in response to my breach of contract. Which basically stuffs them as they are admitting the charges are for breach. They have also stated -
'We believe our default charges are fair, clearly communicated in our Summary Box and justified by the costs we incur as a result of customers paying late or going over their credit limit.'
So clearly the charges are to cover costs. Which they would have to prove by explaining their costs I presume.
Am I reading this right? In which case this is going to be very easy if it ends up in court.
In answer to your secure electronic message dated 8th May 2006 in which you state you are unable to comply with my request for a full refund of all charges "due to my not running my account in order with the terms and conditions", I shall take this statement as confirmation of the fact that the charges are for breach of contract and therefore, as the charges are not a genuine pre-estimate of the damages that are likely to be incurred as a result of late payment or accounts exceeding their agreed credit limit, they are deemed unlawful under english contract law concerning specifically liquidated damages.
These pre-determined charges are therefore considered by myself to be an unreasonable estimate of the probable loss as you have provided no evidence of manual intervention on my account and I am therefore assuming the proceeses involved in these situations to be entirely automated.
I calculate as stated previously that you have taken £400 in total charges.
I require full repayment of this money. If you do not comply fully within 14 days then I shall begin a claim against you for the full amount plus interest charged at your standard rate of interest (currently 15.9% APR) plus my costs and without further notice.
Furthermore, I shall submit a Consumer Credit Act 1974 complaint to the OFT upon the basis that you have failed to comply with the OFT's direction of 5 April 2006 and are therefore not a 'fit and proper person' to hold a consumer credit licence under the 1974 Act. If you do not understand what this means then please seek advice from your legal department.
Yours faithfully,
The Cornflake.
I may tone it down a bit, I'm not sure yet. I need to time it so I have enough money in my bank account to pay the court costs if I need to start a claim.
[QUOTE=thecornflake]
Furthermore, I shall submit a Consumer Credit Act 1974 complaint to the OFT upon the basis that you have failed to comply with the OFT's direction of 5 April 2006 and are therefore not a 'fit and proper person' to hold a consumer credit licence under the 1974 Act. If you do not understand what this means then please seek advice from your legal department.QUOTE]
I would leave that last paragraph out - might rub them up the wrong way! Also, I'm not sure you will be able to charge them 15.9%, I could be wrong but I think the maximum you can charge is 8%. Otherwise, brilliant!
It seems due to certian laws we may be able to claim back interest at the rate charged on us. The thread mainly discusses bank interest where there is no stated rate, but I think in the case of credit card companies this may be easier due to them having an actual stated APR.
I'm going to try it anyway - I'll still get the 8% if it doesn't work.
And yes I probably will remove the last paragraph.
3 Threads merged so some of the above posts may not run in order
When you want to fool the world, tell the truth. Advice & opinions of Janet-M are offered informally, without prejudice & without liability. Use your own judgment. Seek advice of a qualified insured professional if you have any
doubts.
I put this aside for a while to go after easier prey but now the balance is over its limit and they're threatening me with defaults so I'm sending the lba.
I went through a half hour call on Saturday to see if the limit could be increased to cover the overlimit amount (the whole thing's getting paid off when I move house anyway) but interestingly they declined, mainly based on the fact I had used the card for 'online gambling'. It was only a deposit of £10 to earn cashback but it seems they go through what you use the card for and make decisions based on that.
I may also have to put the account in dispute to try and stop the defaults. They also said if I miss another payment (this would be the second one) they would close the account and ask for it all back in full. I know I could probably contest this and get a payment arrangement but i don't want to have to start doing that, especially in the middle of moving and changing addresses.
If you found this post useful please click on the scales above.
Egg - £400 - Prelim sent. On hold.
Mint - On the list Est £800
GE Capital - On the list (3 accounts!) Est £4000
MBNA - £545 Prelim sent 13/11/2006
LBA sent 1/12/2006
£350 partial payment received 18/12/2006. Full settlement received 20/1/07
NatWest - Est £4000 not incl interest
Data Protection Act Sent 10/1/07
Statements received 24/1/07
Prelim sent 3/2/07 Full Settlement received 22/2/07
The contents of this post are the sole opinions of The Cornflake and not necessarily the opinions of any other members of this group. They do not constitute sound legal or financial advice and if in doubt you are advised to seek advice from a qualified professional
Egg putting me over my limit - Unfair?
credit cards on or near their credit limit should be aware of this.
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Originally Posted by thecornflake
