Umoja

It appears that credit card companies have a unique understanding of the what constitutes “late” and “early” when it comes to paying your credit card bill. The credit card companies regard a payment made on the day a statement is issued as being “early”; therefore, if you wait for your next statement before making a payment, you will are liable for a “late” payment penalty, having been deemed not to have made a payment for that billing period.

With the advent of internet banking, this interpretation of “late payment” is demonstrably illogical. The image at the top of this post shows this. Perhaps in the days before internet banking, when bills were issued centrally and one only knew what was due for payment once the bill came through your door, this policy made sense. Now that my statement tells me when the next is due to be issued I can set up a payment to go through on that very day.

This is what I did. My credit card issuer did not like it.

Hannah and I bank in the UK - though we currently reside in Kenya - so we carry out the majority of my banking on-line. I frequently checked my credit card statement this month and the statement screen showed a CC bill issued on the 11th of July. It also states that payment is due by the 7th August. I made a payment dated 11th July was waiting until after 7th August in order to make my next payment.

This afternoon, I logged on to this latest credit card bill and was astonished to see that it included a late payment penalty of £12. I assumed that this must have been issued in error and called customer services to inform them. I was promptly informed, by a very spikey customer services agent (hi there Holly), that it is LloydsTSB policy to issue penalties to credit card holders if payment comes through on the day a bill is issued. Any such payment does not count towards that billing period; it is deducted from the previous statement.

Seeing as I had paid the previous bill and that it was pretty obvious that this payment was for the next period, I asked the customer services representative why the charge had been made and whether she thought that it was fair. She re-iterated that it is LloydsTSB policy to levy this charge in these circumstances and that she had no authority to over rule it. The representative repeatedly dodged the question as to whether this sounded fair.

For my sins, I worked as a call centre monkey for many years. After extended time years at the coalface, it takes something special to get me to lose my temper on the phone. This lady pushed me a little to hard. I was so incensed by her attitude that I asked to speak to her supervisor, whereupon I was informed it is not possible for customer services agents to refer customers to supervisors. I nearly hung up, however, I knew that this is what she wanted me to do. I hung on grimly and asked to speak to anyone else, as long as it wasn’t her.

In the end I was put through to the collections department, not knowing whether collections would actually help me. Luckily, the lady I spoke to there was prepared to listen (thanks Patricia). She made a half hearted attempt to reiterate the company policy, but when I said that that this penalty is demonstrably illogical, she promptly offered to refund the penalty. All she asked was that I make a payment there and then on the phone, which I did. As I had been keen to point out to both employees I spoke to, I had both the ability and the intent to pay my bills in a timely fashion.

Today, I was talking to a friend of mine who had the exact same thing happen to him. He too pushed for a refund, but like me, he really had to fight for it. I think this has to be changed. I’m writing to my bank and will be switching to a new issuer as soon as I return to the UK. I suggest that anyone else who as come across this idiotic penalty charge does the same. It may push the companies to recognise the stupidity of penalising prompt payments.