Credit cards – keep an eye on the statements

Feb 10 2009 Neil Warwick, partner at Dickinson Dees

DURING these turbulent times, it is easy to point the finger of blame at the banks. After all, they have been blamed for the credit crunch and for refusing to lend to each other. Everyone has a favourite “bank story” at the minute but is it worth sparing a thought for genuine problems that crop up from time to time.

Just before Christmas, a client received a credit card statement from a well-known high street bank. There was nothing unusual about this except that the client had never banked with them and had never had a credit card with them either.

More confusion ensued when, on opening the statement, the client found that he owed money on the card.

With a busy family life, it is often difficult to keep up to date with banking correspondence but on double checking recent post, he discovered that there were in fact letters from the bank informing him of the good news that the credit card he had applied for (which he had not), had been dispatched. Better still, the card limit had been quadrupled.

Following calls to various call centres, the bank, the card provider, the card protection provider, customer services offshore and customer services UK, the story became clear.

As a student the client had applied to a little known credit card provider which was owned by a large American bank that provided card protection free of charge to students. As a fully fledged grown up, the client dispensed with all his student credit cards.

However, during the credit crunch the US bank ceased to trade and was bought by a UK bank. In an attempt to make the transition for clients as smooth as possible, this UK bank issued every current customer with a new credit card. Because this particular bank charged for credit card protection, the client was automatically put in debit on a credit card he had never wanted in the first place.

Several weeks later and several multiple choice phone menus later, the card which he never applied for and never received was cancelled and all debits wiped off. Of course, he was galled to then receive the card through the post – but no organisation is perfect!

So what’s the moral of this story? It pays to be extra careful with any statements and to read them carefully when they come through.

Neil Warwick is a partner at Dickinson Dees