Barclaycard charging interest after closing account as per T&C ?

[cfs_too]

Hi,

It's a bit of a complicated issue, but I'll try to keep it concise.

It's relating to my partners BC account, for which he put his head in the sand until 2014 as he assumed PayPlan had 'sorted it all out', since starting a DMP in mid 2006.

 

I took over the issue in 2015, helping him, as we discovered BC failed to default the account in 2006 (and where still trashing his CRA files).

 

 

The journey since has been frustrating to say the least....

...I use 'I' in this context as I have been writing the letters etc on his behalf to try to get this sorted.

 

I have a complaint with FOS, re Barclaycard failing to default a CC account in 2006 and adding interest between 2007-2016, at times as much as 17.9% whilst on a DMP.

 

I raised complaint with BC in Early 2016,

raising with FOS 6 months later (in time),

BC refused to default account,

and referred me to the FOS.

 

FOS have now stated its both out of time,

ie more than 6 years ago

(only by BC using this as an excuse to stop the FOS investigation),

 

 

and secondly the FOS adjudicator has stated it is fair,

and in BC T&C that interest can be charged after the account is cancelled, as per T&C.

 

 

...my problem is that in 2 CCA requests no terms have ever been provided,

the one copy I did receive with my DSAR does not reference interest under the section number

the FOS states,

oh and the FOS has actually failed to include a copy of the terms they are referencing!

 

I intend to escalate to an Ombudsman, but need a little advice beforehand.

 

My Q is:

 

When a credit card is cancelled,

by the creditor for the cause of 'my failure to meet minimum contractual repayments' (for 5 months),

 

 

does this deem the contract to be terminated and thus no longer valid.

Ie can BC legally charge interest if they have withdrawn credit facilities and 'cancelled' the account?

 

(There are internal BC notes from DSAR which state account is closed in 2006)

 

I always thought that when closing the account,

withdrawing the card and stopping PPI etc

then he contract was finished and interest could not be charged.

(Oh and defaulted which is my main complaint to BC,

the interest being charged is the second part of the complaint as I think this falls also under unfair treatment).

 

 

History below:

 

In summary,

in 2006 default notice,

not complied with

(was in considerable financial difficulty),

received a letter from BC stopping PPI as the account was cancelled.

 

 

All credit facilities were revoked.

DMP with Payplan started FIVE weeks after account cancelled.

 

 

Then a 2nd default notice issued,

after the first DMP payment,

but before DMP accepted by BC

. This too expired before BC accepted DMP.

 

For one year interest was stopped,

but then failed on 2 DMP payments

, only managing a partial payment for both,

in 2007.

(DMP temporarily failed due to bullying from another creditor to make more payments to them outside of DMP!).

 

 

Interest was restarted and never stopped despite numerous letters from PayPlan request that it is stopped - all letters were ignored.

 

Between 2007 - 2016 made regular payments, and in Sept 2016 managed to pay off the remaining balance with a small PPI Claim received from another company.

 

Between 2006-2014 buried head in the sand assuming PayPlan were working in best interests.

Also assumed BC account was defaulted,

 

 

all the others out of 13 creditors were defaulted between 2006-2009.

 

In 2014/2015 realised both that BC was not defaulted and that wouldn't be getting the interest 'refunded' upon completion of DMP

( as promised by PayPlan - unfortunately only verbally!).

 

This is when I intervened eventually leading to this Formal complaint to BC.

 

 

any advice before I reject the ajudicators decision would be great.

Me_too

[slick132]

Hi MT,

 

Can you say what you mean exactly about, " ........received a letter from BC stopping PPI as the account was cancelled. "

 

Have a look at old The Lending Code, paras 224 - 227 that say how lenders should treat debtors who are in hardship or difficulties. BC had a duty to treat you properly.

 

It may have been replaced by the Standards of Lending Practice in July 2016. Maybe have a read of both.

 

If a lender was aware you were in Financial Difficulty, they should have helped you at the time.

 

Read and come back to us.

 

[cfs_too]

Hi Slick & thanks for the quick response,

 

Re: ‘cancelled PPI letter’ - this letter is the only communication received from BC which confirmed the account had been closed.

 

I have attached (i hope) a copy of the letter which references the account is ‘cancelled’, which arrived two months after the ‘expiry’ of the default notice & a copy of their internal notes which state the account has been closed by the collections department (attained under DSAR). They also withdrew credit facilities at this time - in 2006.

BC have declined to default the account.

 

My partner started with PayPlan just over 1 month later, after the account was closed, prior to this BC were refusing to accept any offers directly from him.

 

Unfair Treatment?

Thanks for details on the lending code, I think I have made a mistake in the Formal complaint by referencing the wrong guidelines/practices BC are obliged to follow.

 

The formal complaint included, (as this is what guidelines I thought covered them) quoted from my letter:

 

“Barclaycard has failed to administer my account accurately and fairly, or to have taken ‘consideration as to my Financial Difficulties’ under the following:

2002 - 2007 : The Banking Code

2007 - 2012 : COBS

2006 - 2016 : Data Protection Act 1998

2006 - 2016 : The Consumer Credit Act 1974”

 

Maybe I made a mistake not referencing the lending code?

Does COBS cover the lending code?

 

A little more history

BC stopped interest for just over a year, then there were a couple of payments missed, interest was restarted and the DMP was renegotiated (as was initially too high) and thereafter since 2007-2016 made regular payments.

Payplan made regular contact with BC, each time requesting interest was to be stopped.

BC ignored every request, it was never acknowledged or interest stopped.

My partner buried head in sand as he thought this was the ‘way it is’.

 

Clearly in failing to default the account they have received £2500+ in interest, and in charging interest on his account, whilst reducing/stopping interest and/or defaulting other debtors accounts - this is unfair treatment.

 

The best part of BC unfair treatment?

They declined to respond to 3/4 of formal complaint, referencing my partner to contact the FOS and then have halted the FOS investigation immediately by stating the event occurred over 6 years ago and/or my partner should have been aware within the past 3 years - and therefore the FOS cant investigate!

 

Even worse, the adjudicator didn’t even ask if this was relevant and has given their verdict.

 

The adjudicator has also referenced me to T&C, (they forgot to include a copy in their letter) which I assume states BC are able to continue adding interest after an account has been closed. This part I wish to complain about also, and wanted clarification if BC can do this once an account is closed.

 

This is why I am asking for the above information, as I didn’t want to solely reply on unfair treatment (however this is quite a large part of the formal complaint in many areas!)

 

thanks

MT

BC_PPI_cancelled_JPG_jpg.pdf

BC_systems_notes_closed_JPG_jpg.pdf

[dx100uk]

I suggest that card protection is not PPI

but CPP?

[cfs_too]

Hi dx,

 

Oops, thanks dx, yes now I can see it is the 'card protection' and not PPI.

 

Coincidently, PPI was also stopped around this time (when the account was effectively 'defaulted'), but not registered as such on the BC systems.

 

I'm not sure if its actually BC IT systems which are at fault, as the account was clearly closed, as documented in the DSAR notes,

the account was 'cancelled' as per the card protection letter,

PPI stopped etc

so it indicates the account was defaulted properly but not updated accurately on the BC IT systems.

 

Im sure I read somewhere on here a few years ago that there was an issue in 2011 (I think), whereby BC didn't update the CRA's correctly with the default and then added them retrospectively. Which again must have been an IT issue.

 

thanks

MT