Not upheld: interest rate increase following late payment caused by firm error complaint against American Express Services Europe Limited

Decision detail

Summary

Mr B complained that Amex unfairly increased his interest rate following a late payment that he attributed to Amex's error in duplicating a cashback payment. Amex had emailed Mr B on 27 August 2025 notifying him that the duplicate payment would be debited on 5 September 2025, creating a payment obligation in October 2025. Mr B missed the October payment by one day, which was reported to credit agencies and he believed triggered the rate increase. The ombudsman found that Amex successfully delivered the notification email and generated a statement, satisfying its obligations. Under the account terms, Mr B remained responsible for checking his balance and making payments. The interest rate increase was based on Amex's risk-based pricing methodology using multiple factors, not a single trigger, and could not be directly linked to the late payment. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that Amex successfully notified Mr B of the duplicate payment reversal via email and that a statement was generated, satisfying its notification obligations. While Amex's error created a balance on the account, Mr B remained responsible for checking his balance and making contractual payments under the account terms. The late payment was not solely caused by Amex's error. Regarding the interest rate increase, Amex's risk-based pricing uses multiple factors and does not isolate individual triggers; this is industry practice. The ombudsman could not establish a direct causal link between the late payment and the rate increase, and Amex was entitled to correct its error and report the late payment accurately to credit agencies.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website