Terminated Agreement & Interest Rate Hike

[Bosund]

Hi,

 

Recently SAR'd EGG and found that the interest rate that they charged went from 19% to 26% one month before my account was 'Terminated' like a lot of other people, in the region of 161,000 I believe.

 

Having worked in the finance industry, I know that they do take some time over making choices like this, so making a rate increase just before terminating an agreement does seem to go against what could be called Fair Trading.

 

Am going to have a go at the OFT, FOS & my MP over this but would be interested to know if it was just me being 'Flavour of the Month' or did this happen to others that were 'Terminated'.

 

 

Regards,

 

Bosun.

[Bosund]

Thinking about this, it would also be interesting to know if anyone who was not 'Terminated' also had an interest rate hike in Dec 2007.

 

Regards...

[Bosund]

Had a call from the FOS yesterday and they stated that they would be questioning EGG on the two main points I rasied, namely, interest rate hike just before termination and also why, after termination, are they allowed to increase the minimum payment.

 

If there is anyone else who had their interest rate hiked just before termination or had their minimum payment increased after termination I would strongly suggest getting in touch with the FOS asap.

 

Regards...

[Bosund]

Hi,

 

Not sure if it is relevent but received an email from Equifax today notifying me of a change to my Credit File, the entry was: -

 

There have been changes to the following Credit Agreement in your credit file.

 

Deleted Credit Agreement Summary

 

 

Company Name Account Type Account Number

 

Previous Information PRUDENTIAL BANK - EGG (I) Credit Card XXXXXXXXXXXXXX

 

 

 

Have no idea what this means or if it has something to do with my compaints to the FOS re. dodgy increases in interest and mis-sold PPI.

 

Anyone out there have any knowledge about the format of these entries?

 

I have not stopped paying... yet.

 

Regards,

 

Bosun.

[Bosund]

Good News,

 

Have received a letter from the FOS today and EGG have agreed to refund to my, (still open but terminated), account, all additional interest charged to the account since it was terminated in 2008 and have agreed to reduce the interest rate to the rate just prior to termination.

 

Effectively this means that over £1500 is being credited to the account and the interest rate reduced by over 7%.

 

So there we have it. Do check your SARs - if the rate did increase just before termination Egg get on to the FOS asap.

 

Regards,

 

Bosun.

[MarkE123]

Hi Bosund,

 

I have exactly the same situation. Interest was hiked in Dec 2007 and terminated in Feb 2008. Minimumum payments also increased drastically since they "terminated our agreement".

 

I have not been totally convinced by the arguments put forward here to with-hold payment to Egg thusfar, as I do not want to receive a default notice, so continue to make the minimum payments until there is concrete evidence.

 

As I know for fact the above statements, do I still need to apply for SAR? Do I need to forward copies of any of the documents on to the FOS? Or did you simply call them to advise?

 

Advice would me much appreciated as I like the other 160,999 people, am miffed what the have done by terminating our agreement, but continuing to charge extortionate interest rates.

 

I have calculated since "termination of agreement", I have made payments just short of what my outstanding balance actually was at the time (not including interest), yet my current balance has only reduced by a few hundred pounds!

 

I have contacted them over a year ago, but they refused point blank to consider any proposal for alteration of the "cancelled agreement".

 

Regards,

ME

[Bosund]

Hi ME,

 

I initially SAR'd Egg to get the evidence, it will show in their logs, and then submitted this to the FOS.

 

Like you, Egg replied to me saying that what they had done was entirely legal, so I forwarded that on as well.

 

If you like I can let you have a copy of the detail of my complaint to the FOS but think it better if you PM me. Am also looking at another legal angle of this which I can also let you know about.

 

Like you I am not sure of some of the arguments on here, every opinion has it's merits, but am continuing to pay. Peter Bard gets a lot of stick but he makes some valid points.

 

Regards,

 

Bosun.

[MarkE123]

Hi Bosund,

 

Your kind offer of sharing your successful experience is grealty appreciated, I shall PM. Thank you.

 

I would just like to point out which I missed in my initial reply, is that I do agree with you that many of the points put forward on here deserve merit (I have been reading them for over a year without posting). I agree with many of them 100% in my heart and have nearly taken the step towards cancelling my DD so many times, but my head keeps interfering! The fact they are not legally proven is just too much of a gamble for me and my family.

 

Regards,

 

Keep up the good work all.

 

ME

[MarkE123]

Well, I typed a pm to you, hit send and I do not have enough posts for the priveledge yet!

Will need to make a constructive post or two to enable this, so as not to spam!

 

I will forward on shortly.

Thanks.

[Bosund]

Hi,

 

As you will probably have guessed, this has been bugging me for quite a while now. With one exception, I never had any replies to the original posts so thought it may have been a one off. Just recently though I have had the post above and been contacted via PM by other people who have had a similar experience. So I wasn't just flavour of the month.

 

Yes, via the FOS I received a refund of payments and a reduction in interest rate, but some of the people I've communicated with have had the debt wiped out completely!

 

So what is fishy about this?

 

Well I had a long chat with the OFT yesterday who seemed very interested in my concerns that this may have been an illegal action on the part of the company contrary to Section 4 of the Fraud Act 2006: -

 

Fraud by abuse of position (England Wales N.I.)

(1)A person is in breach of this section if he—

(a)occupies a position in which he is expected to safeguard, or not to act against, the financial

interests of another person,

(b)dishonestly abuses that position, and

©intends, by means of the abuse of that position—

(i)to make a gain for himself or another, or

(ii)to cause loss to another or to expose another to a risk of loss.

(2)A person may be regarded as having abused his position even though his conduct consisted of an

omission rather than an act.

 

http://www.legislation.gov.uk/ukpga/2006/35/contents

 

If, increasing an interest rate just prior to termination, knowing that a termination is to be made, is not an abuse of position, what is?

 

For the benefit of any doubt, termination letters were sent out in March, but, the account, (in my case anyway), was marked for termination in January, the interest rate increase was marked in December. To close for comfort.

 

The OFT state that they cannot deal with individual cases but details will be passed to their Legal Compliance Team.

 

I don't know if there is a case for Egg to answer but unless I ask the question I'll never know.

 

Regards,

 

Bosund.

[cynic09]

Any more developments?

[Bosund]

Hi cynic09,

 

Well, as expected, the OFT have replied yesterday ststing that they do not investigate individual cases, etc, however, they have recommended getting in touch with the CIB, Companies Investigation Branch which is part of The Insolvency Service, over this.

 

Am a bit annoyed, as when I initially rang the OFT, I was advise that it would be passed on to their Legal Investigation Team yet the reply was from the Enquiries and Reporting Centre.

 

Still they have advised contacting the CIB so that is what I will do.

 

Just to give you a heads up, this is their link: -

 

http://www.insolvency.gov.uk/cib/

 

Regards,

 

Bosun.

[cynic09]

160 thousand is an odd definition of individual. But then again government organisations aren't noted for their grasp of numbers

[Bosund]

Your right and I have fired of a letter saying as such, problem is, if I'm the only one complaining then that is what they will view it as.

 

When I originally started this thread, in Nov 2009, I didn't have one other comment on here until Sept 2010. My original thought was that, 'OK, it was only me', as it turns out that is not the case but, unless others start getting on to the powers that be, it will just be treated as a one off.

 

Regards,

 

Bosun.

[cynic09]

I don't imagine many people have a lot of faith in the OFT after the bank charges debacle. That smacks of HM Gov saving the banks ass at the peoples expense without the vote losing changing of the law to protect the banks.

As do several recent court cases.

Guy Fawlks had a decent enough plan.

I'm at the letter ping pong stage with Eggs bottom feeders myself, since I point blank refuse to comply with a contract I was not party to

[MarkE123]

Well, Suprise Suprise, I never got a reply from Egg for my SAR request

Not going to try again, going straight to FOS now as you kindly instructed.

Edited November 20, 2010 by MarkE123

[cynic09]

I got a reply.........eventually. Somewhat incomplete mind you. No copy of their "letter B" sent in Jan 2008 for one thing

[Bosund]

Hi,

 

Just a quick update...

 

Trying to get in touch with the CIB is like trying to crack a coconut with your hands tied behind your back... give a call on this no. they say on their web site, ring the number, message stating that you must write in but... we will not acknowledge your letter or advise if we will look into your compaint. As much use as an ashtray on a motorbike.

 

OK, tried Action Fraud... we cannot look into this as it MAY not be fraud... ? They advise contacting Consumer Direct... which is part of the OFT... so that helps.

 

So what now? Well I will not let this rest until someone somewhere tells me that they have had a look and it's all aboveboard.

 

There is a report in one of todays papers stating that Tesco supplied a credit card to a Maths Professor with 12 months interest free credit. Unfortunately Tesco started charging interest after 11 months & one week. Maths Prof was not too impressed and after a little battle had the interest refunded. http://www.guardian.co.uk/money/2010/dec/11/interest-tesco-credit-card

 

The reason I highlight this is that how many other people with Tesco could be in the same position without knowing it? Exactly the same applies to my compaint so it looks like I have a few letters to write to the media.

 

Regards,

 

Bosun.

[MarkE123]

Update here too, but not very positive!!

 

Got a letter during xmas holidays from FOS, saying after clearing their backlog they had processed my complaint.

The FOS letter basically said they have passed my complaint on to EGG and as far as they were concerned, they were finished with the matter. But went on to read: unless I am not happy with the response from EGG and gave me a reference number for future correspondence should I require it.

 

Then I got a letter from EGG sating they had received the complaint via FOS and were investigating.

 

Then a few days later, received an official reply from EGG which I briefly outline extracts of the main points below in red (Can scan full doc should it be necessary)

--------------------------------------------------------

Our Findings:

Your rate was changed due to a review of your account as per the terms and conditions of your egg card.

The relevant terms as per 2007 are:

17.1

17.3.1

17.4

 

Following acquisition by Citi we undertook extensive review of credit risk profile.....blah blah blah... and decided to end your Credit agreement with us.

This was communicated to you via letters sent to your home address in Jan 2008.

It also states in the terms and conditions, section 20.2 of the egg card agreement that we can end your agreements at any time. Please see relevant section below 20.2 (detailed paragraph of section).

 

Once your account is terminated it is not subject to further reviews so the interest rate would remain fixed at the point of termination, until your balance has been cleared in full. Once cleared in full, your account will automatically close.

 

Our decision:

On this occasion we are sorry we are unable to uphold your complaint....blah

As a result the decision is closed .... blah

 

You have six months from the date of this letter to exercise your right complaint the the FOS. If the FOS notifies us of their intention to arbitration on your behalf, we will no longer be able to discuss your complaint directly with you.

-----------------------------------------------------------------------------------------

I’m miffed, especially as they have reviewed others interest rates after termination.

One grave concern I have is under their findings they say they increased my APR from 24.9% to 26.9%, thats BS and would make this whole thing a waste of time! It went from 13.2% from the info I can find I still have. Wish I had persued with the SAR requests first..... Would they possibly be able to change the content if I request again?

What now, any ideas? Cheers

[Bosund]

Hi,

 

Sorry you're not having a lot of luck with them at the moment, but all is not lost.

 

My approach would be to chase the SAR request. If they do not comply, report them. As long as they have not complied the complaint is still open. Am assuming that you sent the original request recorded and still have the PO receipt!

 

When you do receive the docs, give me a PM and we'll go through what I found in mine and see if yours corresponds. The info we will be looking for should be the same, I don't think they would try and change anything, but you never know.

 

You still have six months to get back to the FOS, we'll probably look at using my FOS ref. to give them a clue as to what they are supposed to be looking at.

Unfortunately, it would seem with the FOS that it depends on which Adjudicator you get.

 

Regards,

 

Bosun.

Edited January 6, 2011 by Bosund

[MarkE123]

Cheers Bosund, I shall pursue the SAR and let you know when I get it or how I get on