When the contract terms of a credit card are changed, customers must be provided with clear and accurate information regarding the changes. Contract terms may not include statements which are not realised in practice.
Nordea bank sent its customers a letter informing them of changes to the billing period and due date applied to Visa cards. However, based on reports received by the Consumer Agency, the letter was not unambiguous enough. Instead of informing the customers, it created confusion regarding what the changes meant in practice and what their implications would be.
The letter stated that the card will function as before if the customer accepts 100% instalments, i.e. always pays off the entire credit in one instalment. The letter also stated that customers get, on average, 30 days interest-free to pay for their purchases.
In reality, however, the card did not function as it had before. Before the changes, the interest-free period for making payments had averaged 45 days and the due date had been the last day of each month. The change effectively made the interest-free period shorter.
In negotiations between the Consumer Agency and Nordea, the bank informed the Agency that it had prepared for problems potentially arising from changing cards. Among other things, Nordea offered customers the opportunity to increase their credit limit on a temporary basis. The bank also sent out another letter, which explained the changes in more detail. Information regarding the changes was also posted on the bank's website and online banking service.
Contract terms on paper, never enforced
The Consumer Agency also received reports regarding a contract term pertaining to the use of Nordea's visa card in making online purchases. According to the contract terms, the card may only be used to pay for purchases in online stores displaying the Verified by Visa logo. Astounded customers had only noticed the contract term after having used the card for some time.
According to the customers, they had contacted Nordea and been told that the restriction did not need to be taken literally. The card could be used to pay for purchases made at online stores even when they did not display the Verified by Visa logo.
The Consumer Agency also highlighted a contract term according to which the card may be frozen if the customer has other delays in making payments or a public bad credit record. The Agency pointed out to the bank that a customer's card may not be frozen if he has managed his credit relationship faultlessly.
Nordea responded by stating that it had never applied the contract terms pertaining to online purchases or payment delays in practice. Both terms will be amended to better reflect the reality of the situation in conjunction with the Payment Services Directive taking effect in November 2009.