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The Great Interest Rate Escalator Trick - Capital One now joining in?


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I have a thread over on the MBNA/Virgin Money area discussing what I believe to be a highly unscrupulous practice by Card lenders to punish their more vulnerable customers by using so-called 'account reviews' to selectively increase their rates of interest to some customers by in some cases massive amounts.

 

It seems that Capital One are also now engaged in this questionable practice. I thought I'd share this with you guys and would welcome your thoughts and input.

 

I had a letter this morning saying that 'based on an account review' (I have a high balance, but monitor my credit record and there have been no negative changes to this since I took out this card - nor do I have any current arrears on this or any other account), they are going to increase my interest rate by a WHOPPING 7% APR :eek:

 

Looking at the agreement, it seems that on the surface of things they can probably do this legally, but I am becoming more and more convinced that due to the:

 

• Apparent selectiveness of the process - i.e. the active targetting of the most vulnerable and the punitive nature of the changes

 

• The sheer amounts of increase involved

 

..that there may be some mileage in challenging this. I'm wondering if these rises could be possibly construed as (dare I say it) penalty charges? I would welcome input from any legal eagles/mods etc if possible.

 

I've requested a management callback from CAP One and will keep you updated.

 

Thanks in advance

Mac

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

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UPDATE - I was told by the lady at the call-centre that this letter has gone out to 'over two thousand' other Cap One customers today - so some of you may be getting this too. Hopefully we can fight this together. ;)

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

UPDATE

Another callback today. It seems that they may be backing down in my case, but the person calling me used fairly weasly and vague language, so I'll be reserving judgement until the clarification letter I asked for (along with my original CCA) arrives. I'll let you know what transpires.

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

Thank you Mac. I have one of their cards. although not used and no balance outstanding. I am going after them for PPI, i wonder if i will get this letter too. I suspect that all of the cutomers who have had refunds will get these letters.

WARNING TO ALL

Please be aware of acting on advice given by PM .Anyone can make mistakes and if advice is given on the main forum people can see it to correct it ,if given privately then no one can see it to correct it. Please also be aware of giving your personal details to strangers

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ukaviator

 

I'm not sure they would dare do that! However I do believe that they have software that identifies certain borrower profiles (high balance/min payments, perhaps problems in the past or with other lenders).

 

They then use this to either squeeze these people for massive rate hikes or 'encourage' them to clear their balances/cut up their cards.

 

Therefore I believe that they are peverting the part of the agreement that says that they will 'review' accounts 'from time to time', using this for much more sinister purposes altogether. It's an example of the use of language that on one hand looks like responsible lending to legislators, whilst on the other allowing sharp practice to go unpunished. Allegedly. :cough:

 

We'll keep a listening watch on 124.6, eh? ;)

 

Mac

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

UPDATE

 

Got the management callback. They're not backing down. Have asked them for a more detailed letter asking for the specific reason that I was selected for this penalty.

 

I have also requested an original copy of my CCA.

 

Keep you posted ;)

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

Thanks Mac. I look forward to your findings. . .

 

Uk

WARNING TO ALL

Please be aware of acting on advice given by PM .Anyone can make mistakes and if advice is given on the main forum people can see it to correct it ,if given privately then no one can see it to correct it. Please also be aware of giving your personal details to strangers

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Share on other sites

I'm reposting this for clarification as due to the CAG system clock incident yesterday, what should be my latest update is still halfway up the page :lol:

 

UPDATE

 

Another callback today. It seems that they may be backing down in my case, but the person calling me used fairly weasly and vague language, so I'll be reserving judgement until the clarification letter I asked for (along with my original CCA) arrives. I'll let you know what transpires.

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

All

 

Here's the letter for reference. Why not post to let us know if you get one of these, too?

 

Cap_One_01.jpg

 

 

Cap_One_02.jpg

 

Cheers

Mac

  • 04/04/07 - £104 exit fee refund - Portman BS
  • Halifax Current a/c 20yr (closed) - in progress - all 20 years statements recovered!
  • Halifax Platinum Card 15 yr - Court Action Commenced - all 15 years statements recovered!
  • A&L Current a/c - You're next..

Write to your MP and

COMPLAIN about the ANTI-CONSUMER way in which the OFT Test Case is being handled!

Link to post
Share on other sites

  • 3 weeks later...

Well if worst comes to worst you can insist on the current rates. I had a large balance on a credit card when I was a student and I always wondered what would happen if the banks did that.

 

On the one hand they have you over a barrel, on the other hand some customers are in a position to pay it off or move it elsewhere. Seven per cent seems a huge rise but I forsee the problem being the scale, if that is there rate for lots and lots of people they could argue there is nothing sinister about the increase.

 

If you want to continue using the card then you have a bit of a problem.

 

Do you have access to other low cost credit?

The views I express here are mere speculation based on my experience. I am not qualified nor insured to give legal advice and any action you take will be at your own risk.

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