Credit card borrower tortured by lender, says judge 3 March 2011
Ian Pollock (about the author)

MBNA has been accused by a High Court judge of "torturing" a customer with repeated phone calls demanding he repay his credit card.

Keith Harrison had his debt of £20,270 written off by the judge, Nicholas Chambers QC, at Mold in North Wales. The judge said MBNA had failed to give Mr Harrison the terms and conditions for the card, when he took it out.

MBNA said it was reviewing the comments and said it had been unable to have "meaningful dialogue" with Mr Harrison. "[We] were unable to ascertain the reason for non-payment," the bank added.

The judge denounced the tactics that MBNA and a firm that purchased the debt had used to force him to pay up.

"In my view, the claimant rightly complains that, mainly by MBNA but also by the defendant [debt collectors Link Financial], he was hounded by telephone calls seeking payment of what was said to be due," said Mr Justice Chambers.

"The calls were a form of torture oppressively frequent in amount and often without attribution to an identifiable number."

Improper conduct

The judge was scathing about the non-traceable phone calls which both MBNA and Link Financial - who bought the debt in 2008 - had used to try to recover the debt.

"It seems to me that such conduct has no proper function in the recovery of consumer debt," Mr Justice Chambers said.

"[There] can be no excuse for conduct of which it must be supposed the sole purpose must have been to make the claimant's life so difficult that he would come to heel.

"I cannot think that in a society that is otherwise so sensitive of a consumer's position this is conduct that should be countenanced," he added.

James Falla of beatmydebt.com said that the case highlighted the plight of many people struggling with debt.

"It seems to me that banks and collection companies are more often than not getting it wrong when it comes to their collection activities. I understsnd that they need to make reasonable attempts to collect overdue balances, however these need to be better monitored and systems updated more quickly. Even people with agreed debt management plans continue to get harassing calls which can not be right" Falla said.

Link Financial blamed Mr Harrison, from Devon, for being uncooperative and said its own approach had been "both proportionate and reasonable".

"We attempted to contact Mr Harrison 18 times over a period of 12 months, as Mr Harrison acknowledges himself through his own records. Although all those calls were unanswered, answerphone messages were left with a polite invitation to call us together with a contact telephone number, Mr Harrison declined to do so," the spokesman said.

Unenforceable credit agreement

Mr Harrison took out the card in 1998, after responding to a mailshot sent to five million people. From 2007 he ran into financial problems, ran up a large debt and stopped making any repayments.

In court he argued that, contrary to the explicit requirements of the Consumer Credit Regulations 1983, the bank had failed to send him the necessary terms and conditions for his card, either when he applied for the card or when it was issued to him by post.

MBNA said it would have done so. But the bank could not prove to the court that this had occurred.

"I find that neither with the application pack nor with the card was the claimant sent the MBNA terms and conditions," said the judge.

"It is perfectly clear that the legislature regards it as desirable that such documents should be provided. It seems to me that a total failure to supply the required documents will prima facie call for some reaction from the court," he added.

Over agressive enforcement

Marc Gander of the Consumer Action Group (CAG) was delighted with the ruling.

"This is a real message to anyone else who tries the same tricks," he said.

Some financial firms, including mortgage lenders, have been criticised for over aggressive attempts to force defaulting borrowers to pay up.

Last December MBNA agreed to improve the way it dealt with customers struggling with debts after the Office of Fair Trading (OFT) had criticised the operation of the lender's in-house debt collection department.

It had been failing to let customers know if offers of partial payments, to start paying back debts, had been accepted.