The Great MBNA/Virgin Interest Rate Escalator Trick

[MacBoy]

Marj

 

Go to the top of the thread - read my first post and call MBNA in the first instance. Follow the method outlined there and see what happens. Be polite but firm.

 

As to any link between your credit card and your broadband/phone package, forget it - your brand loyalty is completely misplaced here. Virgin & The Bearded One have only tenuous links with either operation (MBNA and what used to be known as NTL/Telewest) and have sold the branding rights for the card to MBNA long ago. Similarly, Virgin is merely a large shareholder with a branding agreement on the telecoms package.

 

Hope this helps - good luck and let us know how you get on!

 

Mac

[Marj]

Thanks Mac

 

Will do that tomorrow and will post about what happens

 

Marj

[MacBoy]

OK Marj

Best of luck with this - and also with looking for an alternative funding method for the debt. Although be careful not to get too many CRA searches recorded against you.

 

Mac

[Marj]

Hello again Mac

 

I phoned them (they have an option now to press 2 at some stage if it's about a recent increase in interest rate) and explained to the operator that had received the letter about this. He straight away put me though to a manager.

 

I explained then to the manager that got the letter and thought a mistake must have happened as spoke to her colleague last Monday to confirm my interest rate (it was actually 15.9%) and was not told anything about the increase. She was very accommodating and told me that the colleague should have looked at the notes and told me about a future increase but because they did not, she said that she would keep the rate at the 15.9%. She told me that this doesn't mean it won't rise in the future (' a variable rate' business) but if I do get these letters, I am welcome to call them and they deal with them on an individual basis.

 

Call took me about 25 mins, though, mostly on hold. But it was worth it. Thank you so much for having taken the time to put the information on the forum, Mac. It can often be so frustrating with these big companies when you feel there is nothing you can do even though you know what they do is not right.

 

Am off to my next mission now, having so much problems with Littlewoods catalogue and have a feeling that might actually start a new thread re them...

 

Thanks again, one big load off my shoulders for now anyway

 

Marj

[primera-egt]

I have just tried this as MBNA have just put a increase from 12.9% to 21.9% starting after may statement, but unfortunatly i think they have sussed this out as i went straight through to the management team, and all he had to say is that it was a business decision based on the review of my account,as set out in my terms and conditions, the rates are variable, he said all accounts are reviewed on a 6 monthly basis and i have not been selected or punnished, he will be sending a standard letter to me basicly saying above. Sorry didn't work for me:mad: he didn't even twitch when i mentioned going to the FOS or Trading standards

[MacBoy]

Primera - sorry you weren't successful - 12.9 to 21,9 is absolutely usurous and a disgrace.

 

I wonder (and this is to all) whether this could be contested as a penalty?

 

I'm going to forward to a site helper.

[kennythecelt]

The issue highlighted by Primera has now been raised and hopefully someone with experience will be in touch shortly.

Regards, Kenny

[MacBoy]

Thanks, Kenny.

[banker_rhymes_with]

Hello All!

 

This is a big issue, as these bankers are using any old excuse to lever up the rates...but in absurd jumps.

 

I failed to notice a jump from around 18% on an MBNA Card to 25% in 2004, never saw any notice of that, and have always Paid them every Month without fail (then). OK, maybe a few Days late, and I do mean a couple at most. That always earned me a Late Payment Fine.

 

Late Payment Fines are bad enough, but the 7% jump in rates after 6 Years of Monthly Payments, is clearly a Penalty.

 

Carried on from 2004 paying 25% and wondering why that Card never seemed to go down, until, recently I was very late on a Payment, and found myself Fined on Late Payment Fine, Overlimit Fine and another hike in Rates, but this time from around 25% to just under 35%.

 

That's a 10% hike. Totally disgraceful. No valid reason for that at all.

 

No CCA either, so far, so I may well get them to stuff that alleged Debt where the sun don't shine. However, if it's enforceable, then I will be after the usual Late Fines and Overlimit Fines, but the biggest Claim will be for a refund on the excessive Penalty Interest since 2004.

 

I think it is important for us all to look at these massive Rate jumps. We know they are Penalties, but now we need to work out how best to present that argument so that we can all reclaim...if at all possible.

 

If I do get to the reclaim stage, then I'll be after the difference between the 18% I was Paying, and the 25%-35% that they later jacked the Rates up to as Penalty Interest.

 

Keep up he good work Mac, but I don't do Telephone with a banker so, for me at least, I can only bring myself to communicate with these nasty creatures by keeping it in Writing!

 

Cheers,

BRW

[MacBoy]

Thanks for the comments b_r_w

 

This is as scandalous as bank charges in my view - a clear abuse of the fact that the providers are able to offer variable rate products.

 

It is nothing other than data-mining for profit.

[MacBoy]

We need to pick open their argument. Anyone else contacting their provider to challenge a rate rise please take careful note of the (made-up) reason given for your 'rate adjustment':

 

a) In the 'warning letter'

 

b) by the operator/supervisor/manager you deal with at the contact centre

 

c) In any follow-up letter you are sent if you decide to keep things in writing

 

If we get a few samples we can get together (hopefully with some help from the site) and work on some written argument.

 

I suspect the 'penalty' approach may be difficult, as they construe this in such a way that they can at least attempt to claim that there is no transgression; hence no penalty.

 

Yet the fact is that the borrower is still penalised as a result of the excercise. Oh yes, and they will all be jumping over each other to cite 'market conditions' too at the moment, what with the feeding frenzy the media are having in trying to talk up the Second Great Depression

 

Keep posting!

[banker_rhymes_with]

Hello Mac!

 

We need to pick open their argument. Anyone else contacting their provider to challenge a rate rise please take careful note of the (made-up) reason given for your 'rate adjustment':

 

a) In the 'warning letter'

 

b) by the operator/supervisor/manager you deal with at the contact centre

 

c) In any follow-up letter you are sent if you decide to keep things in writing

 

If we get a few samples we can get together (hopefully with some help from the site) and work on some written argument.

 

I suspect the 'penalty' approach may be difficult, as they construe this in such a way that they can at least attempt to claim that there is no transgression; hence no penalty.

 

Yet the fact is that the borrower is still penalised as a result of the excercise. Oh yes, and they will all be jumping over each other to cite 'market conditions' too at the moment, what with the feeding frenzy the media are having in trying to talk up the Second great Depression

 

Yes, to me, it's more serious than Bank Charges, as they bleed you dry over a longer period, and reap far greater unjust enrichment at 25%-35% than they ever got from £12-£35 Penalty Charges.

 

My nasty MBNA Card tots up to around 1.3k in Penalty Charges, but the Penalty Interest, i.e. assuming 18% was the rate I was used to paying, the difference between that and the 25% and 35% hikes comes to around 3.5k.

 

I want back both the 1.3k and the 3.5k as well.

 

But if no CCA appears, then they can obviously swivel for the lot. I've paid them so much over the Years, that they'll still be ahead even if they have to write off the current Balance. Fingers crossed there shall we say!

 

I have other Cards, and some of them have been playing with the Rates as well, but not as disgracefully as those grabbing bankers at MBNA.

 

Looking back, I also now think that the 2004 Card Rate Hike was a Plan to lead me down the Garden Path for a bunch of Loan Offers in 2005 that appeared just when I needed them (with PPI, of course). Nicely engineered I think, but they needed access to Privileged Information to get the timing spot on...which of course they had, from both my Card Account, an Existing MBNA Loan (with PPI, of course), and their seemingly ready Access to my Credit File.

 

I'll help with this any way I can. This is War and it's time we started another Campaign to add to all the others.

 

I'd open a Parachute Account for my Bank Accounts, if only I could think of a decent bank to use. Are there any good ones left I wonder?

 

There again, if you meet a good banker, shoot him quick before he goes bad and starts banking all over the place!

 

Cheers,

BRW

[MacBoy]

I'd open a Parachute Account for my Bank Accounts, if only I could think of a decent bank to use. Are there any good ones left I wonder?

There are no decent banks. Only money repositories of last resort - well marginally better than mattresses

[banker_rhymes_with]

Hello Mac!

 

I'd gladly stuff it all in my Mattress, but have no Cash to stuff it with, sadly.

 

Gave all mine to the bankers.

 

Cheers,

BRW

[MacBoy]

I see a basic skeleton argument taking shape here (and I will cover this with caveats and ask anyone who knows better to correct me!):

 

Please note this is a very embryonic draft for discussion and peer comment - not advice. DO NOT COMMENCE ANY LEGAL ACTION ON THE STRENGTH OF THE CONTENTS OF THIS POST.

 

1. Initial Letter asking for specific written reason/s behind the rise, as their fluffy marketing letter does not provide any. Also ask them for a specific written answer as to why you were 'chosen' for this.

 

This could also be used by those who tried a call centre first. 14 days to respond.

 

2. 1st LBA - If they don't climb down by this time or provide credible reasons for their actions, threaten a Subject Access Request for all the data they hold about you, including why you were selected for this punitive rise and putting them to proof on their true costs of administering your account - that might go some way towards justifying an increase of this horrific level. (You see where I'm going with that one!). 14 days to respond.

 

Might it also also be good idea to ask for a CCA at this stage?

 

3. If no response, issue the S.A.R - (Subject Access Request). 40 days to respond. Enclose £10.

 

4. Still no response? 2nd LBA giving them 7 days to comply with your S.A.R - (Subject Access Request) or you will take them to court AND report them to the Information Commissioners Office.

 

5. If no climbdown, use form N244 to take them to court for a Pre Action Disclosure hearing (although I'm not sure what that action would be yet!) They are not going to like being hauled in front of a DJ to explain these horrendous rate rises.

 

The argument here has to be that you are sure that they are acting unlawfully, but need your data in order to even start to make a case against them.

 

6. Report them to the Information Commissioners Office

 

Obviously this is all just 'fag packet' stuff and needs a lot more input from others - specifically what action we could take against them in court. IMO, Unjust Enrichment and Penalty Charges must surely be possible candidates, though?

 

Ideas/comments/suggestions?

[banker_rhymes_with]

Hello Mac!

 

Looking good so far, I'm fairly new to CAG, and am only just starting out on my battles. But these awful rate rises are one of the main issues I wish to have a go at.

 

Changing somebody's borrowing Rate by, say, 7% or 10% long term, is clearly a punishment. We moan about Base Rate changes of 0.25% or 0.75%...what would the reaction be if Base Rates were adjusted by these larger amounts?

 

Well, there would be an outcry, as there was when Base Rates hit 15% in the last Recession!

 

Watching this Thread, and will join in when I can help.

 

Cheers,

BRW

[alvinlwh]

I had just received a letter from them, at the end of my 0% offer period, for a 6% rise. This is the Halfords Card which was at 15.9%. I am so p**sed of with them as this is the second time they pulled this trick on one of my cards with them. The first one was a Virgin Card, jumping from 15.9% to 24.9% last June.

 

Luckily for me, I also have a Barclaycard which offer 6.9% life with no fee to existing customers which I had transfered the balances to now. I am going to cut up my MBNA issued cards and send them back to let them know what I think of their rate rise!

[banker_rhymes_with]

Hello alvinlwh!

 

Once you have the Balance moved, then perhaps you could quizz them about the rate?

 

It could be useful to extract something out of them in writing.

 

But you are better rid of them for sure.

 

It'll be a while before I will be rid of them, sadly...well, maybe, have yet to see what Agreements they have!

 

Cheers,

BRW

[loz]

I'm interested in what's developing here, I just got the same letter as BRW informing me that my rate will be 34.9%

 

I already have two complaints in progress against this wunch of bankers, grrr

[banker_rhymes_with]

Hello loz!

 

I don't think the b*ggers even wrote to tell me, only spotted it from the usual Monthly Card Statements.

 

Indeed, I KNOW they never wrote to tell me, nor did they do so in 2004 when it first jumped.

 

Let's not get mad, let's get even!

 

Cheers,

BRW

[MacBoy]

I'm interested in what's developing here, I just got the same letter as BRW informing me that my rate will be 34.9%

 

Loz

Suggest you first try the procedure I have detailed at the top of the thread. Insist on seeing proof that they wrote to you in advance to advise you. Let us know how you get on.

 

Mac

[loz]

Hi MacBoy,

I'll give it a try but will do it by letter/email rather than phone, not confident enough

Thanks for this thread though, it's great stuff and hopefully it will help a lot of people.

 

Loz

[MacBoy]

OK I've drafted an initial letter - this is intended for comment only:

ONCE AGAIN, DO NOT COMMENCE ANY LEGAL ACTION ON THE BASIS OF THIS DRAFT. - I AM NOT A LAWYER.

 

Now that we have established clearly that this practice is widespread and not just a one-off, I think it deserves a name. I suggest Card Ramping.

 

Anyway, here's the first draft - let me know what you think. Again I'd appreciate any help from those on the site who are more knowledgeable and taking an interest:

 

Dear Sir/Madam/Name

 

Account No. NNNN NNNN NNNN NNNN

 

I was horrified to receive your letter dated, nn/nn/nn, advising me that you were raising the rate of interest on my account from n% APR to n% APR. This is a sudden and shockingly high increase and is likely to place an intolerable burden on [my/my family's] finances. I would ask that you reconsider this decision as a matter of the utmost urgency.

There can be little commercial logic in jeapordising your customers' ability to pay, other than for short term profiteering - a practice in which I feel certain that you, as a reputable Financial Services organisation, do not indulge.

 

As responsible lenders (cough ), I am sure you would concur that it is better business in the long term to ensure that customers remain within their means and continue to be able to service their accounts properly? I would be interested to hear your views.

 

Additionally, please could you write to me and explain:

 

• The precise reason for applying the penalty - your initial letter provides only generalised statements that I find vague and do not fully understand

• Whether this increase is being applied to just myself, all customers or a particular group of customers?

• Whether (if this is a decision applied either only to myself or a selected group of customers), your costs in operating mine, or the accounts of those within such a group, are more than those for other customers?

• Whether this is a 'one-off' increase, or part of an ongoing review process?

I would appreciate it if you could ensure this explanation is provided to me within the next 14 days. Please note that if I do not hear from you within that time I shall consider issuing a Subject Access Request under the terms of the Data Protection Act 1998.

 

Under the terms of the Act, you may be required to furnish me with copies of all correspondence, internal or external, relating to (but not necessarily limited to) this matter; in order that I might understand the reason I am being penalised so harshly.

 

I look forward to hearing from you.

 

Regards etc.

Mac

[banker_rhymes_with]

Hello Mac!

 

The Letter is looking better already.

 

How about Card Rate Ramping? CRR.

 

Or Card Rate Rocket Racket? CRRR!

 

Or Card Rate Ramping Racket? CRRR!

 

Something that sums up their game in the name. Preferably a name they really won't like one bit whenever they see it.

 

This new Consumer Revolt does need a name, as it's going to be big, probably bigger than the Penalty Charges Revolt (which doesn't have a catchy name) and as big as the fledgling mis-Sold PPI Revolt (which doesn't have a nice name either).

 

The Peasants are revolting. But so are you Rasputin...

 

Cheers,

BRW

[MacBoy]

I like Card Rate Ramping

 

But I also like Card Rate Rocket Racket Ramping