Charles on… anything that comes along

So we were applying today for a personal loan. (That’s an unsecured one, in the lingo.) Do the maths. Hmm, here’s on at 6.4%. Over five years, that’s about.. yeah, that’s manageable.

But hey, here’s another one from the same bank, for 7.1%. What’s the difference? Ah, no redemption penalty. If you come into some money during the life of the loan, you can just pay it off, right there.

Doing the calculation showed that the difference in cost of the 6.4% loan vs the 7.1% loan was a touch under £200 over its life.

And how much would the redemption penalty be on the cheaper loan? 58 days’ interest - that’s two months’ interest, far more than the difference in loan price. Subtle difference that you might not spot if you didn’t go into the detail - and, most of all, ask them. What the banks like about an internet-only loan, of course, is that they don’t have to tell you this sort of thing.

So - redemption fees, one of the banks’ ways of grabbing money off you.

Now the second one, which I got in an email from someone who’d seen these posts.

Just received a letter from MBNA telling me I have a credit on my credit card of £12.44 for more than a year and that from the 30th March they will be introducing an annual service charge for accounts that have a credit balance by 26th March - the charge will be either £10 or the amount of the credit balance if less than the charge.!!!!!!!!!!!!!!!!

Hello, is anybody sane working for these people? They further explain that as a responsible bank they must inform me that I am earning no interest on this amount and that it is not (god help us) fraud protected!!!

They suggest I (1) use my card to clear the balance (2) transfer balance to another card or (this is a good one!!) 3) make a donation to MBNA’s nominated charity!!!!!

Being in credit with your credit card company: another way to get charged.

Oh, and one other experience that came across the inbox. You’ll recall I railed a bit at some organisation called PKRSER.com. I’m not alone: another email I received..

ust returned from a Miami based Caribbean cruise to find my maestro card charged with £390.00 Sterling - reference pkrser.com. Didn’t mean anyrhing to me. Cancelled the card with the bank have set about getting a refund. Used the card twice to withdraw Dollars but nothing else. Could my details have been cloned? Could you tell me if this company regularly do this type of fraud or is it a legitimate error???.

I don’t know if pkrser.com is regularly used for fraud - perhaps someone from the company would like to drop by and tell us? Whenever they Google their name they must find this result pretty high, after all - presently my earlier post is No.7. All link here and let’s see if we can push them up higher! (Though we’re at No.2 on “pkrser fraud”. Must try harder.)

And if you’re wondering how using someone else’s credit card to play online poker could enrich you, here’s how. You get your own credit card. You get someone else’s credit card (or four or five others, ideally). You use all those cards to log on to a particular table at an online poker site. You play very badly with all the hands but one, which wins and gets credited while the others get debited.

You would think, since that’s how it works, that the online poker companies could follow the fraud trail trivially easily, by seeing which cards that are complained about are at tables where they lost and one other card consistently won. Though I suppose that’s hard to discern from the ones where you have complete idiots playing the game. Which is what happens all the time…

These posts might be related (the database thinks..):
• If your credit card imposes a penalty payment, don't pay it: it's not legally enforceable (26 September 2004; score: 87.11%)
• Like water on a stone, slow processes work: bank penalty charges declared illegal. Update: *maybe* illegal (24 April 2008; score: 85.58%)
• More on PKRSER, aka Partygaming, and the credit card data it wants - and where you got scammed (28 February 2007; score: 76.71%)