Unfair trading regs 2008 EGG withdrawal of card

[couresportivo]

Prohibition of unfair commercial practices3.—

(1) Unfair commercial practices are prohibited.

(2) Paragraphs (3) and (4) set out the circumstances when a commercial practice is unfair.

 

(3) A commercial practice is unfair if—

(a)it contravenes the requirements of professional diligence; and

 

(b)it materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.

 

The above extract from the UTCPR 2008 3 b, may be the answer to my immediate problem.

 

In my view, the withdrawal of my card whilst not in default, materially distorted my economic behaviour. I was reliant upon the ebb and flow of payments and new transactions. I continued to pay for some months after they withdrew the facility.

 

I accept I owe them the money 6.5k but the withdrawal of the facility caused me an immediate cash flow problem. Never late, never defaulted, never incurred any penalty.

 

Is the practice unfair and do I have an argument

 

thanks for the advice.

[BankFodder]

When CPUT first came out, I was very excited by the possibilities. In the event, I think that the regs are completely underused - mainly because the OFT seems to be completely uninterested in taking up complaints and because the regs give no direct right of action to indiiduals.

 

In your case, I don't think that CPUT applies because I don't think that card withdrawals are kind of practice that CPUT was intended to prevent.

 

If on the the other hand you could show that a company made a practice of withdrawing cards in order to force customers to take out expensive loans to cover the outstanding balance, then this would be a CPUT matter.

 

It is sometime since I looked at CPUT so I can't remember all the details but apart from anything else, the word "practice" suggests to me a general style of operating a business - not merely one-off incidents.

[couresportivo]

The CPUT in my view specifically covers products and services, and a financial product is a product just like any other.

 

Your argument "If on the the other hand you could show that a company made a practice of withdrawing cards in order to force customers to take out expensive loans to cover the outstanding balance, then this would be a CPUT matter." is interesting.

 

As EGG have withdrawn the revolving credit, it has been unilaterally converted into a straight repayment at 18%. Expensive. I have just this minute done a search for unsecured loans over 5 years and headling rates of interest are circa 7%

 

Now if EGG pursue me, which is a possibilty, could I argue the point that the "loan" is unfair in someway, notwithstanding that there is no direct right of action.

 

As for it being a one off, a 161,000 card holders surely cannot be considered one off.

 

If I had wanted a loan, then I would have applied for one. I wanted the revolving credit, which they withdrew for no apparent reason and not in default.

Edited May 1, 2011 by couresportivo
amendment

[nicklea]

To be honest, I really don't understand your point of view.

 

They have not said that you must repay the full balance immediately.

 

Yes, they have restricted your ability to take out new credit but you still have the ability to make repayments of your debt at any level that you want to as long as it's above the minimum monthly amount - you certainly wouldn't get that flexibility with a loan.

 

It appears from what you say that it was normal for you to not pay the balance off in full each month and to pay interest on the remaining amount. Well, I would suggest that you are still doing that, so I don't really understand how your economic behaviour has been distorted with regard to the product.

 

Don't forget, it's only with regard to the product and not to your life generally.

 

Also, it's very important to remember what bankfodder said above:-

 

the OFT seems to be completely uninterested in taking up complaints and because the regs give no direct right of action to indiiduals.

 

So, I would suggest that while it may well be very useful to threaten them with the CPUTR they won't really be of much help when/if it goes to court.

[couresportivo]

I use to pay off the card in full. Then one of my clients went bust owing me a few grand. To stay afloat I paid some of my business bills on my personal credit card and switched to monthly repayments.

 

Then things went bad and I lost my business Oct last year. In June last year EGG cancelled the revolving credit, this then impacted upon my personal short term cash flow, so much that I could no longer fund the business and I ceased to trade. The only creditor being me, and my only creditor is EGG for 6,5 k.

 

I continued to pay them monthly installments, until I could no longer pay them. I then stopped the payments and asked them to convert into a loan at a reduced rate. This they refused to do, just imformed me to make payments at the full interest rate, 18%.

 

I accept I owe them the money, but they varied the agreement by stopping the credit facility, when not in default. Now it is and I have just received a DN demanding payment in full.

 

My argument is that as they varied the terms of the contract and converted it into a loan, would I have taken a loan at 18%

or should i have sought a loan at 7%. to cover the outstanding amount I owe them.

 

My credit file is now affected making it difficult or impossible to secure a loan and they insist I pay them 18%, which I consider an unfair practice, when other lenders offer loans at 7%. What I do not want to do is make payments to them, which they will incorrectly (in my view) apply an 18% interest charge.

 

In my view, as they varied the contract, they should have allowed me to repay the loan at a more commercial rate of interest say 7% or even preferential rate of interest. Until I reach an agreement with them over conversion to a repayment schedule on a fair footing I wont pay them.

[Guest]

Hi

The unpleasant facts are, credit card companies can either withdraw your facility to draw down credit or terminate the account even if there is no default, since February this year they should give you 2 months’ notice before they do it, or if you were in breach hey can do it instantly and explain afterwards(EU Consumer credit amendments).

This may well be unfair or even unjust but to be blunt there is sod all you can do about it.

By stopping paying even a token payment you are playing right into their hands in that you give them the legitimate right to demand and enforce the recovery of the full balance of the account.

Peter

[couresportivo]

Ah well. just keep writing to them demanding them to treat me fairly and make the odd payment till they do.

 

by Cheque?

[trout]

I'm confused Peter,

 

I understood that a creditor cannot Terminate,End or Enforce without issuing a compliant DN ie The Harrison Case

[Guest]

I'm confused Peter,

 

I understood that a creditor cannot Terminate,End or Enforce without issuing a compliant DN ie The Harrison Case

 

 

 

Hi

Different types of termination.

On your T and Cs there will be a section that says the creditor can end or terminate the agreement, this is the contractual termination clause.

If a creditor uses this it does not mean that he can enforce any demand for early repayment of the loan, in effect, on a credit card all it means is that you will not be able to draw any further credit.

If he wants to be able to enforce a demand for early repayment then he would have to issue a default notice (as per Harrison).

The subsequence actions would be enforcement these include the default termination.

Peter