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MBNA dispute discussions


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MBNA is one of nine companies I am corresponding with at the moment. None have progressed to the action stage.

 

I thought I would share this letter I got from MBNA today, and the response I have just sent them. I will update on progress letter.

 

For your info, I wrote asking them for a copy of my file and a note to say I knew of at least £406 + interest but wanted a full statement.

 

They wrote me this letter:

 

We refer to your recent letter dated 21 May 2006 concerning default fees on your account. I would like to clarify the situation from our perspective.

 

We have always set out precisely what our charges are in our agreement with you, as they are an integral part of the terms and conditions under which we are prepared to provide credit facilities. When customers pay late, we incur substantial costs in dealing with their default. Similarly, we have set credit limits carefully for each customer and for good reason. We expect every customer to respect their credit limit. If a customer goes over their credit limit, he or she is using the card in a way that is not allowed, in effect obtaining unauthorised borrowing. We therefore lend more than we agreed to, and take on risks, which were never accepted in the first place. In the case of both late payments and overlimit usage, and also where a cheque is returned unpaid, we look at the portfolio as a whole and set uniform charges reflecting our costs of dealing with such defaults of customers overall, as do all other major credit card providers. This approach allows us to be clear and upfront about all default charges and the basis on which they are applied.

 

Our view is therefore that the charges that you agreed to are valid, fair and enforceable. Term 3b of your credit agreement with us clearly states that you must pay £25 each time your payment has not reached your account within one day of your payment due date, or when you exceed your credit limit, or a cheque is returned unpaid.

 

We do value your custom and so we would like to resolve this matter. I have therefore credited your account with a goodwill payment of £290 on the basis that this is in full and final settlement of your complaint.

 

You may know that the Office of Fair Trading has recently issued guidelines for the level of credit card default charges. MBNA disagrees with the OFT's interpretation of the law and continues to maintain that its default charges have always been fiar, legal and transparent. However, we have decided to reduce our default charges to £12 with effect from 28 June for late payments and returned payments, and 28 July for overlimit fees.

 

There's more sign off stuff. Now, a couple of key things strike me about this letter. First, they tell us how they calculate charges - they take an aggregate view across their network, which means that every customer is being charged based on this aggregate view. So they are admitting that their charge for each customer is not related to the actual costs of dealing with that customer.

 

Second, they are admitting that they keep their charges in line with those of other banks. Again, an admission that their charges are not calculated against individual cost. Did someone just say "cartel"?

 

Here's the letter I sent in reply today.

 

Thank you for your letter of 15th June in response to mine of 21st May.

Unfortunately you have not complied with my request in that letter for a full statement of charges placed on my account, which is a fair request under the terms of the Data Protection Act 1998, which states that I may request a copy of all personal data relating to me held on file by you.

The standard allowed time for you to comply with a request for personal information is 40 days, which would take us to around 31st June. However, I will happily wait until 7th July for the requested statement.

I do not understand why you feel a need to credit me with £290 if you are certain that your charges are legally enforceable. You say this £290 is “in full and final settlement of your complaint” but you also say I have no complaint to make, from which I infer that I do have a complaint to make as you obviously see a need to settle it financially.

The Office Of Fair Trading has not stated that £12 is a fair charge to make – it has said that it is the maximum acceptable charge, but that all charges must only recover costs of chasing debts.

As you are no doubt aware, it is illegal to charge a penalty fee for breach of contract. So if you are saying that £25, or even £12, is a fair amount to charge for such an event, I would appreciate documentary evidence to show why it costs you this much for your computer to add a line automatically to a piece of auto-printed paper.

You cannot penalise customers for going over a credit limit – one set by you and one controlled by you. You can also not put a customer over their credit limit by adding penalty fees that push them beyond the limit if those fees are illegal.

You already earn additional interest on balances when payments are late, so charging arbitrarily calculated penalty fees could be seen as taking money by deception, especially if you are not preventing a customer from going over a credit limit set by, and controlled by, you.

Despite signing your terms and conditions, I have only recently been made aware that penalty fees are in fact illegal, and you failed to make me aware of this at the time.

Once I have a full statement from you, I shall be adding up the charges and seeking to reclaim them in full, as well as additional interest and interest on top of interest, plus any legal costs I incur in reclaiming these fees.

Should I not receive a full statement from my personal file to enable me to calculate these illegal penalty fees by the stated date, I shall first have to take that up with the Information Commissioner.

I have no desire to avoid paying off my balance and would like to stick to agreed schedules, but I believe my balance is artificially high.

MBNA - Full statements received (Looking for more than £406)

Nationwide BS - Statements received (More than £900)

Nationwide Credit Card - Awaiting statement (More than £400)

Accucard - Awaiting statement (More then £300)

Halifax Card - LBA £450

Shell Visa - Awaiting statement (More than £300)

Cahoot - Statement arrived - calculating total (More than £350)

GE Money - LBA (More than £400)

Ikano - Awaiting statement (More than £300)

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Yeah, this is the "pre-estimate of costs" argument. They *claim* to have established the total cost to them of these transgressions and then divided it by the expected number of incidents in a year. If that were true, they would be able to turn up in any County Court of their choosing and prove the figures are correct. Of course, they are total and utter bollocks, but they like to keep telling the lies. Tell them to poke their goodwill gesture where the sun don't shine...

A&L: Settled - £6,200

HFC: Settled - £800

Shell Visa: Settled - £250

Egg: Settled - £700

Mint: Settled - £1200

RBS: Settled - £850

 

The opionions in this post are guaranteed to conform to the laws of physics, but pretty much nothing else...

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