- Mon Oct 04, 2004 4:36 am
We it may, or may not be, some consolation to you that you are not the only one.
I should point out to avoid any confusion, that it is my American Express Blue Credit Card that is of the issue here. I am aware that the amex charge cards are not considered under the same rules as credit cards. But it is definitely the credit card that I am talking about here.
I also received a Notice of Cancellation form American Express on the 29th Sept 04. This letter stated that "All monies outstanding on the account (including any new transactions or cash advances) are now payable in full." and that "Your account has been passed to a debt collection agency."
This I consider excessive action considering
- The amount in arrears is only £208.43
- I had already contacted them and informed them of my current situation and explained that I would be seeking advice.
- I had a good payment record with this firm up to this point.
- Other creditors have responded favorable to my letters. Amex is the only black sheep. (so far)
The very next day I got a letter form a Debt Collection Agency. They are demanding the full balance on my card of approx £7,000 plus they have added a Collection Fee in excess of £1,180. They demand the full amount within 30 days. They sign off with the words "Failure to do this will result in your account being processed for LEGAL ACTION." (the capitalisation is as per their letter).
Now I have done a bit of research here (great forum btw). I found another post refer to the Office of fair trading document oft611 and after reading this and doing some more digging I found oft664 entitle "Debt Collection Guidance" (these and other OFT docutments can be downloads as pdf files here http://www.oft.gov.uk/News/Publications/
- Not the best laid out page but search down the list till you find the document numbers I am referring to here). This document details some things that the OFT think is unfair. If I may quote a couple of paragraphs:
oft664 under the title "Physical/Physiological harassment"
2.6 Examples of unfair practice are as follows:
f. pressurising debtors to pay in full, in unreasonably large installments or to increase payments when they are unable to do so.
IMHO, the practice followed by American Express and this DCA are exactly
what OFT664 document says they must not do.
I am also very interested in the fact that Barron has been requested to pay £2063.97 when I have only been charge £1180ish. I am extremely keen to know if the DCA that is pursuing Barron is the same firm as is dealing with my account. If so there is another point in OFT664 and it is repeated from OFT298 "Debt Collection Practices" sections 1.10 to 1.13 "Debt Collection Charges". If I may quote form the pages again:
OFT664 Charging for debt collection.
2.9 Charges should not be levied unfairly.
2.10 Examples of unfair practice are as follows:
d. Applying unreasonable charges. e.g. charges not based on actual and necessary costs.
Reading section 2.9 you think, "Well Barron owes more than I do so must be due for higher charges." But when you read section 2.10.d it becomes clear that charges must be based on the costs of debt recover - Not, IMHO, the size of the debt. Why should Barron's debt cost more than mine to recover. What are these costs based on. Is it just based on how much we owe? Or is Barron going to get send more demand letters than I am and so cost more in postage. I am being flippant but my point is serrious. They are not supposed to just pick numbers out of thin air.
They are also required to specify the amount of any charges in the credit agreement. I will be sending amex a letter asking for a copy of the credit agreement. Which they are legally obliged to supply on request.
Since I got this letter at the weekend, I have not yet had the pleasure of discussing things with the DCA yet. so they have not put their foot in any further than discussed above. But for Barron's assistance, read OFT664 sections 2.6 b and f, 2.8 f and g, section 2.9 and section 2.10. They should not have told you to take out additional debt. Also they are obliged to refer on to the creditor any reasonable offers to pay by installments. Surely your offer of paying £400 per month must be considered reasonable.
Also don't offer to pay more than you can afford. It would be unreasonable of you to pay more to amex than other debtors simply due to amex shouting loudest. You should contact an adviser agency (e.g. Citizens Advice Bureau) who will help you draw up a budget of your income, priority expenditure and other commitments in a manor that ensures you are treating each creditor fairly and also is within you budget to keep up payments. Apparently the courts would do the same calculation in a similar manor and take a dim view of creditors who proceed to legal action when a reasonable budgeted payment plan has already been offered.
If I may repeat my self - I am very interesting in discussing this further with Barron as we both seem to be in the same boat at the same time. I am also interested in hearing form any other forum members who have or are having a similar experience with American Express and their DCA. I believe Amex and the DCA are acting improperly and we have more chance of making a collective voice heard than if stand alone.