a further kind of bank charge that counts as unlawful?

[jon]

With my Lloyds credit card, I noticed about 18 months ago that I was paying 'card repayment cover', or 'credit protection cover' as it was sometimes called, every month. Stupid, perhaps, but I hadn't quite taken this in before on statements as I was concentrating on avoiding late charges and the like; I rang up to stop the payments on notcing them. I did as far as I remember query why they were on there but not in a very full-on way.

 

In light of finding out about bankaction group and the actual legal position on account excess charge, bounced SO and DD charges etc...it is not the same thing but I wonder if contesting these charges is possible, if I have sufficient grounds for it. When I stopped them 18 months ago I was not as aware of my rights as I am now; and the fact is that, since being given my card say 5/6 years ago, I had never had any letter or enquiry from the bank about continuing to make monthly payments of that nature. I believe I signed up for the payment protection cover originally when I was given the card (probably, I'm not even sure I officially signed up for it but presume I must have done at that point), and was certainly under the vague impression this would continue for a year when the card was issued. By the time I stopped the payments 18 months ago, 3 or 4 years had passed and looking at my records, I paid around £400 for these payments in 2 years of these 3-4 years alone.

 

So, as I was never sent a letter after an initial period asking if I wanted to carry on paying these payments, do I have grounds for arguing they were in reality inapplicable and should be refunded to me? or do I have to live with the fact that I made the payments as part of my usual payments to my card and should have been sharper about these slightly hidden costs if I wanted not to pay them, at the time?

 

Perhaps a moderator, or anyone else, would know the answer?

 

Quite a lot of the time my payments to my card were automated through the period concerned. incidentally.

 

Cheers

[martinwhite]

They will claim that they were providing a service.

 

You will possibly find that you had x months free cover which you had to write to them to cancel at the end of that free period. But that's just a guess.

[dazza12]

Credit insurance, or card protection is a service, so the bank can charge whatever they want.

 

Also, if you tick the box saying you want it, then it's up to you to cancel it when you feel you no longer need it. There is no trial period as such. Many banks do hide this charge, it's much easier to say 70p for every £100 outstanding than a proper APR, so people think in terms of 70p instead of £7 (if £1000 owing).

 

Having had these charges mount up when I was heavily into debt, I no longer tick these boxes as if I do lose my job, I'll enter into an agreement rather than depend on an insurance policy that will find some loophole to avoid paying out.

 

I know it's annoying to have been charged this much, but I'm afraid it looks like you've lost it.

[jon]

can accept I've lost that money...in fact I recall thinking I might cancel the payments before but was intimidated at the time by thinking that if you do something like that, the bank might ask why, and as I had become unemployed (not in a way that would have entitled compensation from them in any way, having been a contract worker previously) I did not want to reveal my financially weak position to them, having an outstanding balance.

 

It would be difficult for them to claim the payment cover was 'providing a service' though when nothing was provided - except a charge on the bank statement. A service only comes in if they have to do something. But I quibble I guess...

 

nowadays, I take the approach like the person who says forget it to something like employment insurance...a much better approach. I guess if you are in a permanent job then payment protection cover might be worth it; except it's quite a lot of money, hidden as observed, when quoted at 70p in £100. Very revealing that banks often won't issue a card unless you sign up for ppc; they wouldn't like it if you actually had to make an insurance claiim as it would mean you were one of the people they were paying out to, so basically they like it when you tick the ppc box (to get your card) as it means there is a charge they can enforce, they've sold something at a profit.

 

Ta for the replies.

[Bookworm]

It would be difficult for them to claim the payment cover was 'providing a service' though when nothing was provided - except a charge on the bank statement. A service only comes in if they have to do something.

 

Nope.

 

They insure you against the possibility of adverse conditions (otherwise, it would be "assurance" [as in life], not "insurance") and gamble that they will not have to pay out.

 

With your reasoning, you could reclaim your premiums every year you haven't had a crash, a break-in, the collapse of our home, a broken leg whilst skiing, etc... In other words, insurance would cease to exist.

 

Anecdote: In one of my many previous incarnations, I used to work for international medical emergency services, and as it's linked to travel insurance, we used to get some interesting stats (oxymoron, I know):

Every year, there are more claims for lost/stolen Louis Vuitton luggage than are actually sold

[JamesBooker]

Don't be put off by people telling you it can't be done. With some perseverance many companies will eventually cancel these premiums and refund what you've paid. Try looking at this thread on MSE, people there are sympathetic to this situation and have had a lot of success in getting refunds, myself included

 

http://forums.moneysavingexpert.com/showthread.html?t=117175

[jon]

You are right that they are strictly speaking providing a 'service'. My wording was not as exact perhaps as it should have been; I was wanting to pick at the the reasons for banks like Lloyds sometimes only issuing cards when you take out the insurance (as happened in my case) and turning down the application if you don't take out the insurance; and show that it may be a 'service' in the legal sense but there are other meanings of the term that do not apply to the provision of payment cover protection.

 

The advisor who dealt with my application, you see, tried to make out that the insurance showed I would be being properly sensible about having a card; since it meant that if I was unemployed and couldn't make card repayments, it meant there would be no problems with being able to carry on having the card. By this logic it was conveyed to me that the insurance was a sensible part of the package of having a card, and that was why Lloyds could not issue a card if I did not have the insurance, the insurance being a vital part of being sensible about having the card. Whereas the reality, when you unbundle this reasoning, is that you are paying for something where Lloyds's approach means they are making a profit; you are relatively unlikely to benefit from the cover, and if you went to another card provider you would find you could get a similar card without having to take on the extra costs of card protection. So Lloyds provided me with a 'service', without doing me a service, while conveying to me that they were doing me a service because they were letting me have this impressive card+insurance deal.

 

it seems to me with banks you have to unpackage all aspects of what you are actually being given. Lloyds managers seem to be either disengenuous or false in my experience - for example, Lloyds loans are quite expensive and the manager, when I gently pointed out that the loan I have nearly now repaid was considerably more expensive than others on the market, reacted as if this could hardly be the case (when to a bank manager, it would bleedin' obvious).

[JamesBooker]

If you were pressurised into taking payment protection you have grounds to claim it was mis-sold to you. Try this sample letter of complaint:-

 

 

http://boards.fool.co.uk/Message.asp?mid=9659780

[seylectric]

As far as I know the banks are not allowed to make Payment Protection Insurance compulsory. In addition to trhis it can be cancelled at any time with, usually, 30 days notice. It's therefore my advice to opt for it when applying for the card, then cancelling it immediately the account is opened.

 

Best way to use a credit card is of course to repay it in full each month. No interest payments and no need for PPI insurance.

[jon]

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