Credit Card penalty Charges(Undue enrichment)

[Sparkie1723]

I 'd like to put forward some views and arguments that may add another dimension to these charge claims, and ask for other members views.

 

Unjust Enrichment in the context of Penalty charges.

 

In the case of a buyer of goods, services, property , land etc buys at a price he truly believed and was led to believe by the seller that it was a reasonable price to pay and that the profit being made was reasonable, and , it is later found out that the profit made was unreasonable and extortionate, the seller would be open to a claim of unjust enrichent" and there are quite a few cases of this nature that have been adjuged to have been classed as unjust enrichment (in fact a lot).

 

With regard to penalty charges ....especially credit card late payment fees, penalties are unlawful in the first instance, and even though the OFT have said £12 is reasonable... that is not accepted by anyone .....the OFT do not make laws, the Credit Card Companies put forward the OFT "advise" as a defence. ....That is not acceptable.

 

I cannot see any way that a late payment actually costs the Credit Card Company 1 penny.

 

They do not send you a letter ,.... so they cannot claim that as a cost.

 

They do not return a cheque......they cannot claim that as a cost.

 

They do not return a direct debit....they cannot claim that as a cost,

 

They do not return or not pay a standing order ...they cannot claim a cost for that.

 

The question is what is their cost and what is it for??

 

Further more I submit that a late payment is no loss whatsoever...... in fact ...it is a gain to the Company/Bank.

 

As my example below would argue

I make the entries as an example for ease of folowing

 

Balance due on an account £5000:00

Interest for 1 month 200:00

Min payment due 250:00

If the payment is paid on time the daily interest for the next month

would be on the Balance of £4750:00

 

But if the payment was late say for example another month the interest charged would be on £ 5200:00

 

So the Company/bank has made interest on a larger amount than it would if the payment had been made........ that I argue would be a gain.

So to add a penalty for a late payment is "extra profit plus interest on the penalty fee and is in my opinion "unjust enrichment".

 

Anyone any ideas on how this could be used as an extra argument against penalty charges.

 

sparkie1723

[Capitulator]

even though the OFT have said £12 is reasonable...

 

I thought it wasn't so much that £12 was reasonable, more that £12 was the threshold above which the OFT would start investigating ?

[midge61]

Hi sparkie

 

I agree with you as I feel although the OFT guidelines state no fee should be OVER £12 infact they are because the cc company charge you interest on that £12 so it is ALWAYS more.

 

The worst thing is that all the cc company's have upped their interest rates (cap 1 34.9%) to try and recoup the loss since reducing the fees.

 

It would be interesting to see this challenged in court.