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Credit Card Claims News

Credit Card Claims News

In 2006 The Office of Fair Trading investigated the charges applied by Credit Card Providers for late payment and over the limit fees. There report found that many Providers were charging fees that were disproportionately high and unfair to the customers. In the same year The Citizens Advice Bureau, The Office of Fair Trading and The Financial Services Authority investigated the sale of Payment Protection Insurance on credit cards and found serious failings. Credit Card Claims News exposed a culture amongst Credit Card Providers of excess charging and a lack of transparency.

For years Credit Card Providers have applied charges to the accounts of customers who make late payments or exceed their limits. They justify these charges as necessary due to costs incurred administrating accounts and notifying customers. A small charge to cover costs is understandable, but Credit Card Claims News found that some banks charged as much as £35 for this kind of account administration. Given that most letters sent to customers are automatically computer generated this fee seems undeniably excessive. Added to this the charge would be applied on each separate occasion a limit was exceeded or payment made late regardless of whether the limit was exceeded by just £1 or the payment made one day late. Credit Card Claims News reported the unfairness of such charges which seemed often to penalise customers in the most vulnerable financial position and to make any financial problems worse rather than offering assistance.

The Office of Fair Trading's investigation agreed with the feelings of many that Credit Card over the limit and late payment fees were disproportionately high. The decision was unsurprising particularly as Credit Card Claims News revealed the annual amount charged to card holders exceeded £300 million a year. The Office of Fair Trading recommended Credit Card providers re-evaluate the charges applied. They accepted there should be some charge to cover the costs involved in notifying customers, including stationary and postage, as well as any staffing costs incurred and a contribution to the maintenance of IT equipment used to deal with defaults. Credit Card Claims News reported The Office of Fair Trading had calculated the acceptable level of charging at £12.

In response to The Office of Fair Trading's recommendations most banks lowered their limits to the agreed £12 threshold. Many customers were still angry, though, that they had been charged exceptionally high amounts for exceeding limits or making late payments - particularly now these charges had been deemed legally unfair. Credit Card Claims News reported a large increase in complaints made by customers regarding late payments and over the limit charges since The Office of Fair Trading's ruling. Because of the ruling many people have been able to recover charges applied to their accounts which, in some cases, amounted to several thousand pounds. If you believe you have paid credit card charges that were unfair complete our quick claim form.

In 2006 Credit Card Claims News reported another investigation was being undertaken by The Office of Fair Trading. Also focused on Credit Card Providers, and carried out alongside a similar investigation by The Financial Services Authority, they looked at the sale of Payment Protection Insurance on credit cards. The investigation was prompted by a complaint made by The Citizens Advice Bureau (C.A.B) earlier the same year. Credit Card Claims News reported the C.A.B's concerns regarding the way Payment Protection Insurance was being sold and highlighted widespread failing by banks and other providers. The C.A.B condemned Payment Protection Insurance as 'The country's biggest protection racket' and called for immediate change. They highlighted a number of key issues with the insurance including the cost and the level of exemptions, both of which were felt to be unnecessarily high.

The major issue addressed by The C.A.B, and reported by Credit Card Claims News, was the way in which the policies were sold. The Office of Fair Trading and The Financial Services Authority agreed regarding this point and, as a consequence, many high street banks, building societies and brokers faced large fines. The investigations revealed widespread mis-selling of Payment Protection Insurance which ranged from failure to provide appropriate documentation to policies being added without a client's knowledge or consent.

Credit Card Claims News reported several common ways in which policies were mis-sold. Some examples are listed below:

  • The customer was sold the cover without being made aware of the terms and conditions.
  • The customer was told the policy was not optional.
  • The customer was sold the policy even though they were unsuitable due to their employment status. Credit Card Claims News reports many cases where people were unemployed, retired or in full time education when they were sold these policies. Payment Protection Insurance is designed to cover repayments when a borrower is unable to work - if they were not in employment when they took out the loan this cover is clearly not appropriate!
  • The customer was sold the policy even though they had a pre-existing medical condition. Credit Card Claims News reports cases where customers were sold Payment Protection Insurance, but were not told their health condition would not be covered. Many people did not discover this crucial policy exemption until their condition worsened and they attempted to claim financial help from their policy.

If you believe you have been mis-sold a Payment Protection Insurance policy fill out our quick claim form. To read more Credit Card Claims News just follow the links.

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Belmont Thornton Limited is regulated by the Financial Conduct Authority in respect of regulated claims management activities; FRN:838450

Belmont Thornton Limited is incorporated in England and Wales, Company number 6621233, whose head office at Unit B11, Kestrel Court, Harbour Road, Portishead, Bristol, BS20 7AN and registered office at Harwood House, 43 Harwood Road, London, SW6 4QP.

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* Belmont Thornton operates on a "No Win No Fee" basis. This means that there are no upfront costs to pay. Our fee only becomes payable on a successful outcome of a claim. A cancellation fee is payable if you decide that having instructed Belmont Thornton to act on your behalf, and after 14 days of signing your Letter of Authority, you do not wish to continue pursuing your claim with us. The cancellation fee is the reasonable costs incurred for the work undertaken. Please see our terms of engagement.

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