Not upheld: unfair interest charging methodology complaint against American Express Services Europe Limited

Decision detail

Summary

Mr S complained that AmEx unfairly charged interest on his credit card account by applying interest to individual purchases from their transaction dates until repayment, rather than only to the remaining unpaid balance after his payments. AmEx's account terms and conditions clearly stated that the interest-free period applies only if the full statement balance is paid by the due date, and that interest accrues on purchases from their transaction date until repayment when the full balance is not paid. The ombudsman found that this methodology was sufficiently communicated to Mr S through both the account terms and monthly statements, and that AmEx correctly applied these terms. The complaint was not upheld as AmEx acted fairly and reasonably in accordance with the agreed terms.

The Ombudsman's reasoning

The ombudsman assessed whether AmEx made its interest-charging methodology sufficiently clear to Mr S and whether AmEx applied the terms fairly. The terms explicitly state that interest is charged on purchases from their transaction date until repayment when the full statement balance is not paid, and this information was available in both the account terms and monthly statements. AmEx applied these terms correctly and did not misapply them or calculate interest incorrectly. While Mr S found the methodology unfair, it was clearly communicated and he accepted it by entering into and continuing to use the agreement.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website