Judges are being persuaded by banks to apply the same rules to credit card charges as those being enforced upon bank charges, subjecting credit card customers to the same freeze on reclaiming their money as bank customers are facing, according to MoneySavingExpert.com.
Banks are sometimes succeeding in getting judges who are ruling on credit card charge cases to apply the same hold as that on bank charges, which has been put in place by the Office of Fair Trading in order to pause the reclaiming process until a test case has occurred in which they can determine the true nature of such charges and the extent of their ‘unlawfulness’.
Martin Lewis, creator of MoneySavingExpert.com has met with the OFT and requested that, in collaboration with the Financial Services Authority, they release an official clarification on the issue of credit card charges, in order to plainly differentiate them from bank charges.
Bank charges are those incurred for exceeding overdraft limits, bouncing checks and having insufficient funds for Direct Debits, whereas credit card charges are those specifically accrued on credit cards for defaulting on payments or going over the credit limit.
Customers that have been subjected to these charges, which the OFT has said are disproportionate and unlawful, could be missing out on thousands of pounds worth of refunds despite credit cards being unaffected by the forthcoming OFT test case regarding bank charges, scheduled for January.
Furthermore, Mr Lewis has said, a decision on credit card charges was made in April 2006, when it ruled that penalty fees on credit cards should not be more than £12, at which point many providers lowered their rates to this figure.
This also makes it easier to reclaim credit card charges, continued Mr Lewis, because there is a definitive amount over which customers can now claim back the charges they paid during the last 6 years.
Brad Askew, Managing Director of consumer compensation company Claims Financial said: “I have heard that some banks are refusing to deal with credit card refunds. It seems to me that the banks are determined to muddy the waters as much as possible in all these areas as it discourages consumers from taking action, but we have been settling a number of these claims, proving that customers who have been subjected to unfair credit card charges can get their money back.”
Mr Lewis concluded: “It’s a national disgrace. The FSA made it plain the hold only applies to bank charges, yet banks’ lawyers are disgracefully trying to bully customers, using it as an excuse to suggest it applies to credit card cases too. They know full well there’s already been a ruling that credit card charges are unfair – it’s done and dusted.” Reclaim unfair bank charges
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