Extortionate interest rate after a couple of late (but not unpaid) payments

[fleeced_by_rbos]

Has anyone missed a few payments to MBNA and suddenly found their interest jump quite dramatically?

 

I have a Virgin credit card (run by MBNA) which initially had a rate of 16%. After my wonderful bank (RBS) bounced the odd direct debit, MBNA started to hike up the interest rate to 24%! I always paid the missed payments by debit card after I had money in my account and in fact paid even more to lower the balance.

 

MBNA then lowered the interest and sent me lots of credit card cheques and reminded me that I could transfer balances and even increased my limit a few times.

 

Of course, me being rather silly enough to use the extra credit they offered, I quickly found that I had used too much. Now I can't pay enough per month to make any difference to the balance.

 

Now I bank with Smile and they too have bounced the odd direct debit, most often a day or two before I get paid (on the same day every month, but that doesn't bother them). So MBNA have now decided to hike up the interest again to 24%.

 

I also go over the credit limit now due to the charges and interest that they add, which means they then charge me for going over the limit.

 

Does anyone know if anything can be done about this?

Edited December 10, 2008 by fleeced_by_rbos

[fleeced_by_rbos]

I found this on my travels.....

 

Perhaps MBNA make a habbit of fluctuating interest and increasing limits to lure people in and crush them with high interest.

 

Did I Happen to Mention? MBNA Sucks ... Irregular Payments

[poppynurse]

I think you have got off lightly! The gits at MBNA have increased my interet rate to 34.9% and I've never missed/been late in 9 years!

 

I wrote and complained and they reduced it to 29.9% - how generous - so I've complained to BBC Watchdog and the FOS. I've also requested my CCA to see if the debt is enforcable.

[fleeced_by_rbos]

Hi Poppynurse, that is unbelievable. Have they given any reason whatsoever?

 

I thought it was rather obnoxious of them to raise my interest to 24% given that I always made the payment within a few days, but to raise yours to 34.9% is just unbelievable.

 

I know they are allowed to vary rates but does anyone know if MBNA are allowed to vary them as much as they have.

 

I am thinking that I can go after them based on my rate increase being punitive in nature, while yours seems to be just an increase because they think they can.

[poppynurse]

I wrote to complain and just got a 'we are allowed to do this under the terms and conditions' but they reduced it to 29.9% - how generous

I will not be taking this lying down - CCA request in and about to default.

[fleeced_by_rbos]

I think I'll try that one too. I've just found as of my last statement that the rate is now 30.35%.

 

If you don't mind me asking, what was your original rate when you signed up, Poppynurse?

[poppynurse]

16.9%

[AA99]

MBNA took over my Bank of Scotland McMillan Charity credit card 15 months ago which was at 12.94%. When they took it over they quoted me 12.9% for life. Balance transferred quite a few grand on to it and it's now 34.9%. I didn't realise because in tiny tiny print it quotes a monthly rate which looks quite low! Very sneaky

[fleeced_by_rbos]

There are plenty of stories and forums out there all indicating the MBNA is one of the worst, perhaps only slightly beaten by Capital One. Here's one story I found...

 

Anger over card rate rise | This is Money

[AA99]

MBNA took over my Bank of Scotland McMillan Charity credit card 15 months ago which was at 12.94%. When they took it over they quoted me 12.9% for life. Balance transferred quite a few grand on to it and it's now 34.9%. I didn't realise because in tiny tiny print it quotes a monthly rate which looks quite low! Very sneaky

 

 

By the way, I couldn't help notice from your 'nom de plume' that rbos means Royal Bank of Scotland. My Bank of Scotland card was taken over by MBNA and I was told that Bank of Scotland and Royal Bank of Scotland are 2 completely different things !!! Well, I never ?

[fleeced_by_rbos]

By the way, I couldn't help notice from your 'nom de plume' that rbos means Royal Bank of Scotland. My Bank of Scotland card was taken over by MBNA and I was told that Bank of Scotland and Royal Bank of Scotland are 2 completely different things !!! Well, I never ?

 

It does indeed. In retrospect though, I was fleeced far less by RBoS than by Smile (a misnomer if ever I've seen one!) and MBNA. Perhaps I should change my username to just "fleeced"!

[pompeyfaith]

Im using this argument in my court case as they have ramped up my APR from 16.9% then to 24.9% and then 34.9% at a time when interest rates in england where on the decline plus no reply to my S.A.R and then after passing it onto OPTIMA LEGAL no reply to my cpr 18 they have also been adding PPI which i did not ask for because i would not qualify for a pay out as i had a stroke previous to this.

 

I have sent in my AQ to the court and now waiting for a reply.

 

Does total failure of consideration apply here ?

 

http://fds.oup.com/www.oup.co.uk/pdf/0-19-928753-8.pdf

 

Regards

 

Leon

Edited December 10, 2008 by pompeyfaith

[fleeced_by_rbos]

I found this interesting - a nice look at the apparent practices of MBNA over the pond...

Ex-MBNA employees fault credit practices - Bangor Daily News

[fleeced_by_rbos]

This is an interesting thread from WhoCallsMe.com regarding the hounding that customers (and non customers) receive from MBNA and the telephone tough guys they hire called Aegis (previous Global Vantage of harassment fame).

 

08081013405 - who calls me?

[fleeced_by_rbos]

Today I received one of those "Let us help you to repay the money you have spent" letters, asking me to call them by today and discuss payment.

 

Lots of talk of duty to repay, of course forgetting about their duty to act lawfully.

 

Oh and this week Martin Supple got wear the "Head of Customer Assistance" badge!

 

Shame they haven't sent me an enforceable CCA - just an application form. Muppets that they are.

[pompeyfaith]

Nice to see Egg Card get a big fine by the FSA today but hey what about MBNA one of the biggest offenders not only in mis-sold ppi but also there interest rate policy.

 

I feel now that all MBNA card holders should be complaining to the FSA so as to force them to investigate there bad practices.

 

Regards

 

Pompeyfaith

[fleeced_by_rbos]

Indeed we all should Pompeyfaith!

[Golfer2000]

Firstly, I am very impressed with the quality of support, letter drafting and time given to complete strangers by the CAG stakeholders and users.

 

Myself, after many years of having MBNA cards of which I have 5 brands. A few years back I ceased using them as the interest became uncompetitve. I simply continued to pay £20 over the minimum sometimes £50 via standing order (S/O). I was staggered to find no real reduction in my debt more over recenlty the minimums have risen. After paying more than minimums I would have thought they would have gone down.

 

I rang recently rang MBNA only to find I am now paying 29% !!! Plus they had levied charges for underpayment due to the miniumum going above my S/O.

 

I have really had enough of these 'bandits' and feel its time to fight back, and would welcome some assistance.

 

I intend sending a Subject Access Request (SAR) is this the best first step and the same as a CCA information request or Data Protection request.

 

Do you have a link where I can access the templates refereed to in some threads and finally is tehre link to a glossary for terms and accronyms used.

 

Cheers.

[The abused]

Hi all am new to this site. I gather lots of us are experiencing problems with the hike in interest rates or to be more precise the removal of introductory rates. My major problem is with CITI cards but have experienced similar with MBNA a while ago. Looking at CITI's latest terms and conditions they state under a particular section that if there is a serious breach and/or repeatedly not making payments they may remove any introductory rate among other things and replace it with their standard variable rate. I do not have a recent copy of t's and c's from MBNA but reckon it would be about the same. I was late on making 2 payments in 6 months. My rate went from a very reasonable 5.8% to a crippling 32.9% I pay by direct debit so my payments have gone from £230 to just under £400 a month. Interest now is about the £290 a month instead of the approx £45. When I spoke to one of our Indian colleagues to request a return to the Introductory rate I was told no. It was because it happened twice in 6 months. Also because I had been a customer since 1999. When a payment is made late your account is automatically debited with late payment fee which is a charge for the default. They are then charging you again because that is effectively what it is via the change in interest rates. The rate is far higher than the standard rate Apr which is shown to advertise their cards. Also I noted the word repeatedly!. If I do something once it is a one off, If I do it again it becomes repeated if I do it again after this it becomes repeatedly and repeatedly is not twice ( with me on this?) So by the wording they must surely be in breach if you have only defaulted twice as it does not constitute repeatedly. Also How the hell do they arrive at these figures of 30% plus apr. Who dreams up these. If you make a late payment and are consequently stung by this inrease in Apr it is damn costly and they keep this well hiiden when enticing you thes loans and balance transfers. They need to be outlawed somehow. I have a copy of CITi's latest T,s and C's and when I looked on Citi cards website and looked up tems and conditions there was not one mention of increasing interest rates to these extortionate levels or otherwise. They appear to me to be deceptive to say the least' They clearly dont have a conscience either. What can be done to stop this as many more people will fall into this trap!

[The abused]

Oh I forgot to mention. Had loads of messages and calls via mob and home phone over past day and a half in all 6, furthemore recieved one after payment made. I also recieved a text on mob from aegis to contact them immediately. Did not know who the bugger Aegis is. Phoned them 20 or 30 or so times and it was either engaged or caller has hung up. Now I know who they are I reckon as the telephone number is the same as that in a few posts above (courtesy fleeced by RBOS

[fleeced_by_rbos]

I emailed the OFT about interest rate hikes and this is the reply I got (very speedily I may add - within a couple of hours):

 

There are no legislative caps on the interest rates that lenders can charge, and lenders can set their own rates. During the review of the Consumer Credit Act 1974, which led to it being amended by the Consumer Credit Act 2006, the DTI - now BERR (the Department for Business, Enterprise & Regulatory Reform) - analysed independent research and decided not to introduce an interest rate ceiling in the UK.

In December 2008 credit card companies agreed a set of 'fair principles' on increases in credit card interest rates and dealing with borrowers in difficulty. Please see the BERR press release at: http://nds.coi.gov.uk/environment/fullDetail.asp?ReleaseID=387325&NewsAreaID=2&NavigatedFromDepartment=True

The press release mentions complaining to card providers about interest rate hikes and taking unresolved complaints to the Financial Ombudsman Service (FOS). You can find information on the FOS on their website www.financial-ombudsman.org.uk

For information, for general advice on consumer credit and other consumer issues you can contact Consumer Direct or another advice agency. We publish a list of organisations that provide help and advice on credit and debt issues on the Consumer Direct website at: http://www.consumerdirect.gov.uk/after_you_buy/money_and_credit/debt-counselling/ The phone number for Consumer Direct is 08454 04 05 06.

[Viscount Stair]

Supine!

[poppynurse]

But nothing for those of us who have already suffered huge hikes in rates and have managed to keep paying

[jaystar2020]

Hi All

 

I wonder if a recent discovery answers this.

MBNA are on a new drive to 'weed out' low and slow paying accounts, and the interest rate hike (mine too...) is their subtle way of getting the cash flowing, or highlighting potentially difficult debts and then perhaps selling them on...?

The logic defies...well, logic.

There is another post somewhere on this same topic, same lot.

They are morally bankrupt.

J

[fleeced_by_rbos]

After some time I have finally received the so called credit agreement in response to my CCA request. I don't think it is enforceable, but could someone else take a look and let me know their thoughts.

 

The first image is the application form and the second is the Ts&Cs that would have supposedely been on the reverse of that form. The box design is the same on both sides but I can't see anything that ties them together. Btw, the signature panel for the representative at the bottom was filled in by the nice lady that convinced me to take the card - she also filled in the entire form.

 

http://i497.photobucket.com/albums/rr339/aemobile/app1.jpg

http://i497.photobucket.com/albums/rr339/aemobile/app2.jpg

 

Cheers

FBR