Questions Of Cash: Interest charged on 0 per cent plastic

Q. In January, I applied for a credit card from HSBC, which offered a 0 per cent interest rate on balance transfers and purchases for nine months

When the card arrived in February, there was no mention of the 0 per cent rate. I phoned HSBC because I did not want to spend on the card and then find out I did not have 0 per cent after all. The man assured me I did have a 0 per cent interest rate, which would last until the beginning of November.

I asked to have this sent to me in writing, but was told that was not possible. In April, I noticed on my credit card statement that I was being charged interest. I rang HSBC and was told there was a mistake by HSBC and that the charged interest would be refunded to me.

My latest card statement shows that I am still being charged interest. I was told that the card I had been given was a Student Mastercard, which is not eligible for a 0 per cent interest rate, and that there was nothing they could do about it.
CP, by email.

A. HSBC apologises for its failures. It has now issued you with the correct credit card, with a new initial interest-free period, and has refunded you with the interest you have paid in the interim.

Q. In May I phoned Scottish Life, requesting that my pension benefits - a tax-free cash sum and monthly pension - be paid immediately. I was told there was a 20 working day turnaround time. When this expired I was told that the service standard was now 25 working days and that when I eventually receive the forms, sign them and post them back, there would be a further 15 working day delay before the money is paid. The whole transaction will take 40 working days, plus postal time.
DL, by email

A. Scottish Life spokesman concedes: "Unfortunately, the current turnaround time for annuity cases is around 20 days, compared with our service standard of five days." The primary reason for this is what it describes as "the huge increase in requests for 'benefit option packs' since A-Day, 6 April".

The spokesman adds: "While we had anticipated there would be a big increase in such requests, we hadn't anticipated that it would be to a level of four or five times normal; nor that this would be sustained over several weeks." Scottish Life says it will take another six to eight weeks before it can bring its turnaround times down "to more satisfactory levels". The good news is that Scottish Life has completed your request and paid the money into your account.

Q. Onetel wrongly charged me £30.76 in June 2004. I am now being pursued by a debt collector for this amount. What can I do?
GH, by email.

A. The charge relates to the alleged use of your phone for an entry into a premium rate competition. The Carphone Warehouse, which now owns Onetel, has agreed to clear your account and not pursue the debt, although it does not accept that it was in the wrong.

Q. I have received my Royal Sun Alliance pension from Phoenix, which now administers the RSA pension fund. But the cash settlement has had the higher rate of tax deducted, although I pay standard rate.
SS, Middlesex.

A. Phoenix says that HM Revenue and Customs regulations require it to apply the higher rate of income tax on so-called "triviality payments". A Phoenix spokesman says: "HMRC has instructed pension providers - such as Phoenix - to tax the taxable element of any triviality payment using a PAYE Emergency Code on a Week-1 basis. What this effectively means is that 1/52nd of the respective tax bands apply to the payment and that payments in excess of £738.00 will have the excess amount taxed at the higher rate of tax - ie 40 per cent."

Phoenix says that 25 per cent of the cash sum was paid tax-free, with the remainder taxed as income. Had all the pension been commuted under " triviality rules", up to 40 per cent tax would be deducted from the gross amount and paid directly to HMRC.

A P45 has been issued to you confirming the amounts paid and tax deducted: this should be checked as you may be entitled to a tax refund from HMRC when all your year's payments are taken into account..