Moneymagpie

Bad news for anyone helping to wipe out their credit card debt under the Consumer Credit Act…

Any credit agreement signed before 6 April 2007 must conform to strict guidelines set by the Consumer Credit Act and those that didn’t can in theory be challenged in court and deemed unenforceable. However, a recent landmark decision by Judge Derek Halbert in Chester to put write-off claims on hold, pending the result of selected test cases in the Commercial Court, is a blow for anyone hoping to clear their debt.

Daniella Lipszyc, solicitor from firm Ultimate Law has said that the ruling means consumers should now think very carefully about using claims management companies, who promise borrowers the chance to write off their balances.

“In the current economic climate, it’s completely understandable that people are being tempted by promises to clear excessive spending. But this decision will wipe out any faint hope of an immediate resolution and consumers will be taking a significant risk by parting with any cash in return for a debt-free life,” says Ms Lipszyc.

But… you should claim for unfair credit card charges instead

Ms Lipsyzc argues that consumers should instead focus their attentions on claiming against unfair credit card charges – which unlike unfair bank charges have not been frozen by an FSA waiver. “Credit cards do not fall under this waiver – consumers are far more likely to get money back on unfair charges than see their balance wiped out,” she says.

Most credit card companies charge customers for late payments and exceeding credit limits – and quite sneakily too with such charges cleverly placed on in the new transactions section of your bank statement so always check thoroughly. You are entitled to request a list of all charges made and must get a response within 40 days.

Also, put in writing that you want a refund – you should receive a response within two weeks – and if this is rejected the small claims court may be the next step but again, you should put in writing that you plan to take legal action – this will hopefully scare them into refunding you for unfair charges. Once you’ve worked out how much you have been charged unfairly don’t forget to calculate the interest accrued on those charges and add that to the total. You can find more help at www.consumeractiongroup.co.uk.