Not upheld: unfair charges / interest charges complaint against AMERICAN EXPRESS SERVICES EUROPE LIMITED

Decision detail

Summary

Mr S complained that Amex unfairly charged him interest on his credit card account when his payments were made 1-3 days late. Mr S argued he should only be charged interest for the number of days he was late, not for the entire month. The card terms state that no interest is charged if the full balance is paid by the due date, but interest accrues daily from the date of purchase until payment if the balance is not cleared by the due date. The ombudsman found that Amex correctly applied the charges in accordance with the card's terms and that Mr S was not entitled to the interest-free benefit since he did not pay by the due date. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that the card terms clearly state interest is charged daily from the date of purchase until payment, and that no interest is charged only if the full balance is paid by the due date. Since Mr S did not pay by the due date, he was not entitled to the interest-free benefit. The interest charged accrued from the date of purchase to the date of payment, which is in line with the terms. The ombudsman rejected the argument that Mr S should only be charged for the days he was late, noting that the period between spending and the due date is not interest-free; rather, it is a benefit that is forfeited if payment is late. The ombudsman also found no breach of Consumer Duty requirements regarding price and value.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website