Questions of Cash – November 2013

Q. I was persuaded by a member of the Post Office staff to apply for a credit card for overseas travel.  I agreed and she filled in the application with me.  I am a home owner, have no mortgage or other debts and a retirement income of £25,000.  I have one other credit card which I usually pay off each month.  After a few days I received a rejection letter from the Post Office advising me to check my credit rating at Experian.  Although flabbergasted, I did so.  What I found was that my credit rating was ‘excellent’, I had zero negative factors and was rated as low risk.  Moreover, the Experian credit report showed that there had not even been a request to look at it.  It is annoying that I have been rejected for a card when I did not need one and applied because I was persuaded to do so by the Post Office.  I now feel demeaned.  KB, East Sussex.


A.  The decision to reject the application may not, it seems, have been based on Experian’s credit report, but on the information you supplied.  However, the Post Office is not being very clear in its explanations.  Specifically, it would not directly answer our question as to whether it feared you would clear your account each month and not borrow on the card.  A spokeswoman for the Post Office said: “As with any credit card application, a decision is made based on the information provided by the customer, as well as a subsequent credit check. The information is then checked against a scorecard, a method by which a company can make an automatic decision on an application. The nature of the process means that applications can be declined regardless of the information held at a credit reference agency. In the case of [the reader], we were unable to offer him a credit card based on the information we received.“  We requested further information on how the decision was taken, but the second reply was barely more illuminating.  “There’s a number of factors we take into account before a decision is made on an application,” said the spokeswoman. “Like other companies, we use a scorecard method, but do not disclose our specific scoring criteria.”


Q.  We decided earlier this year to close our accounts with NatWest and transfer to The Co-operative Bank to reduce bank charges.  We completed the relevant switching request to close and transfer accounts.  What should have been simple has been anything but.  After a month one of our accounts had been closed and transferred, but the other four accounts remained open, despite us writing to chase them up.  We then lodged a complaint with NatWest , but despite having a conversation with our allocated case officer, the other accounts are still not closed.   NatWest’s official complaints procedure states that we are supposed to be notified weekly of progress, but this has not happened.  Our local branch is appalled at our treatment and have done the best they can but they have no control over account closures.   Weeks later, three of our accounts still remain open.  LM, Brighton.


A.  All the NatWest accounts have now been closed.  A spokeswoman for RBS/NatWest says:
‘Unfortunately, the details required to close [the reader’s] account were taken down inaccurately in the first instance. This led to a delay in processing the request.  However all the accounts have now been closed and [the reader] has been refunded for costs incurred as a result of the delay.”

Q.  I don’t understand how BT and other companies can make administrative charges when customers decline to pay by direct debit. I do all my banking through the internet and have never defaulted on any payment.  The amount charged has increased beyond inflation over the last two years and I feel we are being held hostage in a no win situation.  Despite questioning these charges and asking for a breakdown in what actual costs are incurred, not one company I have contacted has responded. CC, Scotland.

A.  Questions of Cash has dealt with this complaint from readers on several occasions.  BT insists that its administration charge is reasonable as the costs of processing other forms of payment are greater than for direct debits.  Ofcom, the telecommunications regulator, has examined the issue of what it calls ‘non-direct debit charges’ and considered whether these comply with the Unfair Terms in Consumer Contracts Regulations 1999.  Ofcom’s view is that these charges form part of a supplier’s ‘core terms’ and are therefore not subject to the Unfair Terms regulations.  However, Ofcom’s spokesman emphasises that terms and charges such as these “should be expressed upfront, in clearly understandable language, so that consumers are aware of their existence before they enter a contract”. It adds that “consumers can then make an informed choice as to whether or not they wish to enter into a contract with any particular provider. If such terms are not presented in plain intelligible language with due transparency, the fairness test could apply – which could mean that the charge should reflect only causally related costs.”  In other words, BT and other telecommunications service providers have been permitted to charge for processing payments other than direct debits providing it is made clear and obvious that the charge will apply.  But under the Consumer Rights (Payment Surcharges) Regulations 2012, businesses may only charge a surcharge for not paying by direct debit that reflects their actual additional costs. These regulations apply to contracts entered into from 6 April this year.  Ofcom has the power to enforce these regulations.  A spokesman for the regulator says: “Ofcom is actively monitoring consumer complaints and enquiries about payment surcharges and is engaging with communication providers in light of the new requirements. “  Some telecommunications companies restrict the methods by which payment can be made and this is permissible – so companies can specify that only direct debit payments are acceptable, or they may offer a restricted choice of payment by direct debit or debit or credit card.

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