Oran Hall, Contributor
I had a credit card, which had a limit of US$2,500, with a commercial bank. I stopped using it in early 2007 and was paying minimum amounts until September 2007, but stopped paying entirely later because I had to leave the island due to a family matter.
I returned about a year later. While away, I sent money to my friend to pay my card obligations but he did not. When I returned, I saw a letter about cancellation of my card due to non-payment, dated December 2007. When I called my friend, he said he would pay the money. I never checked and I never got a letter, so I thought that he had paid.
I had a car loan with the bank which I cleared in less than one-and-a-half years, even though it was a three-year loan.
When I went for my title, they said I had a credit-card debt pending and they would not release my title until I cleared it. Does the bank have the right to hold the title of car for the credit card debt?
I have a problem. All the money I spent was when the exchange rate was 62:1. Now it is 81:1. Can you please tell me how to negotiate with the bank? I am willing to pay the credit-card debt and get back the title for my car.
-S.N
PFA: There are three lessons from your case:
From all the correspondence I have received from you, several things seem to be clear:
From my discussions with an officer of the bank, there seems to be no basis for the officer declining to return your car title to you. Bank policy does not allow that.
If you have two loans, the security for one cannot be applied to another in a case like yours where there is no relevant documentation in place.
One reason credit-card rates are so high is that the debt is usually unsecured, exposing the financial institution to very high risk. Banks have other ways to collect overdue credit-card debt: they can use collectors, internal or external, or take legal action against the delinquent customer.
What action should you take?
Call the bank using its toll-free line. Ask to be connected to the card centre, briefly saying why.
Tell the customer service representative at the card centre about your situation and that you want to arrange to pay your debt. Be certain you understand what you are told to do. Ask questions until you are satisfied. Take the action recommended.
Speak to the manager of the branch where your account is about your experience. Your bank would not want another client to have an experience like yours.
Here is a word on debt denominated in foreign currency. Such debt exposes you to foreign-currency risk, so in your case, you are finding that you are being required to pay increasingly more in Jamaican dollars for each United States dollar owed as the Jamaican dollar devalues.
Such debt is best for situations in which you are earning foreign currency or are otherwise able to repay in the currency you have borrowed in.
See what happens when you make only the minimum payment on your credit-card account? It soon lands you into deep debt, even as it allows you continue to have access to the facility.
When you ask others to take care of your business, follow up. Ask for copies of the relevant receipts or other documents. In your case, it would have been prudent, also, to check with the bank on the status of your account.
There are many communication channels. Make the best use of them to secure your interest.
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