After the entire hullabaloo about debt ridden customers, somebody seems to have finally come to the rescue of debtors struggling to make repayments.
MBNA, the credit card company has decided to credit debtors’ accounts by as much as £200 so as to help them make debt repayments faster. MBNA has sent out letters to its customers saying that they intended to assist customers in repaying their debts and not to irritate them. The company added that it would discuss each bad debtor’s case and accordingly give £200 to the debtor to assist him in clearing his debts.
However, this ‘bribe’ as it being called, suggests quite a few things. For instance, it shows that card providers are reluctant to sell debts at a low price to external debt collectors since that compresses industry margins to a large extent.
Also, the recent uproar by MPs and consumer groups criticizing credit card companies for harassing borrowers for repayments, which also led to several people committing suicides, could also have mellowed card companies to take this action in its bid to pacify offended customers.
In order to be eligible for receiving the £200 rebate, customers would either have to pay their minimum monthly installments as repayment or discuss with the company of an alternate repayment plan.
Nonetheless, MBNA’s offer has solicited varied opinions, with someone within the industry believing that the £200 motivation was indeed being given as help and not with ulterior motives in mind. However, she also felt that the company had raked in much more than the amount offered via late payment fines and interest charges and the creditor would probably suffer greater loss if the customer vanished after defaulting.
Meanwhile, managing director of Payplan, John Fairhurst appreciated the effort made by MBNA and said that such an offer was probably happening for the first time ‘but anything that helps to reduce debt has to be welcomed.’
Posted
on : Fri, 25 Mar 2005 00:00 GMT | Debt News
By : Pippa Fielding
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