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Can Penalty Charges post 2007 be claimed?


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Hi every one,

 

I discovered that I have a few credit card agreements post 2007. This includes Capital One and HSBC. What I would like to know is:

 

- Can charges of £12 applied on this accounts be claimed too just like in the pre 2007 agreement?

 

I noticed that most of the banks claims that it is fair.

 

Your advise, comments and guidance is welcome.

 

Dot

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Popping in as asked.

 

For Credit cards and "Non Bank overdraft/current accounts" the answer is yes.

I seem to see this same question pop up from time to time.

 

"

The OFT ruling

 

In 2006 the Office of Fair Trading investigated the charges being imposed on customers of credit card companies. In its report, the OFT said that many of their default charges were unlawful, as they constituted unjust enrichment. It stated that it would act upon receiving notice of any charge over £12 as a penalty, and therefore unlawful [1]. However, the report also specifically stated that the OFT did not necessarily consider £12 a fair charge, and that this would be up to a court to determine. It suggested that the £12 "cap" was intended as an initial step towards fair practice and compliance with the law. Whether or not an individual charge constituted a penalty fee would be based on the established legal precedent that the only cost recoverable would be actual costs incurred.

 

The credit card companies have so far failed to produce evidence of their actual costs to the OFT, instead insisting that their charges are in line with policy and information provided to customers. A report in produced in October 2006 by the Competition Commission on banking in Northern Ireland stated that "[c]harges are a significant source of revenue for the banks on [personal cheque accounts] . [bank name omitted] said that increased unauthorized overdraft fees were part of the strategic imperative to turn the PCA into a profitable business over time.""

 

The OFT press release can be seen here. http://webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/news-and-updates/press/2006/68-06

The GOV website has the OFT statement of Position here : https://www.gov.uk/government/publications/calculating-fair-default-charges-in-credit-card-contracts

If undertaking a small claims action for reclaiming credit card charges it is extremely important that the claimant understands this report. From experience the defendant tried using it in mediation to support that £12 was acceptable under the OFT which as you can see is not what it stated. It is also useful to include in any bundle in preparation for court.

 

Hope that helps :)

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The SabreSheep, All information is offered on good faith and based on mine and others experiences. I am not a qualified legal professional and you should always seek legal advice if you are unsure of your position.

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Popping in as asked.

 

For Credit cards and "Non Bank overdraft/current accounts" the answer is yes.

I seem to see this same question pop up from time to time.

 

"

The OFT ruling

 

In 2006 the Office of Fair Trading investigated the charges being imposed on customers of credit card companies. In its report, the OFT said that many of their default charges were unlawful, as they constituted unjust enrichment. It stated that it would act upon receiving notice of any charge over £12 as a penalty, and therefore unlawful [1]. However, the report also specifically stated that the OFT did not necessarily consider £12 a fair charge, and that this would be up to a court to determine. It suggested that the £12 "cap" was intended as an initial step towards fair practice and compliance with the law. Whether or not an individual charge constituted a penalty fee would be based on the established legal precedent that the only cost recoverable would be actual costs incurred.

 

The credit card companies have so far failed to produce evidence of their actual costs to the OFT, instead insisting that their charges are in line with policy and information provided to customers. A report in produced in October 2006 by the Competition Commission on banking in Northern Ireland stated that "[c]harges are a significant source of revenue for the banks on [personal cheque accounts] . [bank name omitted] said that increased unauthorized overdraft fees were part of the strategic imperative to turn the PCA into a profitable business over time.""

 

The OFT press release can be seen here. http://webarchive.nationalarchives.gov.uk/20140402142426/http:/www.oft.gov.uk/news-and-updates/press/2006/68-06

The GOV website has the OFT statement of Position here : https://www.gov.uk/government/publications/calculating-fair-default-charges-in-credit-card-contracts

If undertaking a small claims action for reclaiming credit card charges it is extremely important that the claimant understands this report. From experience the defendant tried using it in mediation to support that £12 was acceptable under the OFT which as you can see is not what it stated. It is also useful to include in any bundle in preparation for court.

 

Hope that helps :)

 

Thank SS,

 

That's very helpful. I will visit the links you provided and get myself familiar with them in preparation for any future claim.

 

Dot

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If they tried to use the £12 charge is fair as the OFT says so, then I would agree.

PLEASE HELP US TO KEEP THIS SITE RUNNING

EVERY POUND DONATED WILL HELP US TO KEEP HELPING OTHERS

 

 

 

 

 

The SabreSheep, All information is offered on good faith and based on mine and others experiences. I am not a qualified legal professional and you should always seek legal advice if you are unsure of your position.

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hi, I think it is now impossible to reclaim such charges. Although I would love to be proved wrong!

 

Read the threads. No problem claiming cc charges. It's only bank charges that are a problem.

 

What's Best for You?

 

 

The Consumer Action Group is a free help site.

Should you be offered help that requires payment please report it to site team.

 

Alliance & Leicester Moneyclaim issued 20/1/07 £225.50 full settlement received 29 January 2007

Smile £1,075.50 + interest Email request for payment 24/5/06 received £1,000.50 14/7/06 + £20 30/7/06

Yorkshire Bank Moneyclaim issued 21/6/06 £4,489.39 full settlement received 26 January 2007

:p

 

Advice & opinions given by Caro are personal, are not endorsed by Consumer Action Group or Bank Action Group, and are offered informally, without prejudice & without liability. Your decisions and actions are your own, and should you be in any doubt, you are advised to seek the opinion of a qualified professional.

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