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25 Nov 2021

Creation cancels some credit cards linked with the Curve 'smart' card: should you be worried?

Which? explains why accounts were suddenly closed and asks other credit card providers if they will follow suit

Credit card provider, Creation Finance, has closed some customer accounts that have made transactions via Curve cards.

Curve is a 'smart' card that allows you to combine credit, debit and some prepaid cards in one place, switching between accounts with a smartphone app.

But Creation Finance - which powers the IHG Rewards Club Credit Card - has decided to cancel some credit cards that have been linked to Curve following an internal review into how customers have used their accounts.

Here, Which? takes a closer look at why Creation has cancelled Curve-linked cards and whether other credit card providers are likely to follow suit.

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Why is Creation closing accounts?

Creation stopped accepting credit card transactions made via Curve cards while it undertook an internal review.

Following this review, which found that some customers who made payments with Curve were misusing their accounts, it decided to notify some customers that their cards would soon be cancelled.

However, a lack of Section 75 protection seems to be an influencing factor too.

Creation told Which?: 'As a responsible lender it's important that we understand how some customers are using the Curve platform and the impacts it may have such as a lack of consumer protection under Section 75 of the Consumer Credit Act.'

Section 75 protection is legally-binding and means credit providers are jointly liable if something goes wrong with your order. If you receive a faulty product or don't receive your order at all, for example, you can make a Section 75 claim with your credit card provider to get your money back.

A loophole in legislation means transactions made through third parties, such as Curve, do not benefit from this protection.

Curve card in action

'My account was closed out of the blue'

Daniel, who used Curve to pay for transactions from his Creation account a few times, was notified out of the blue that his account would be cancelled.

'When I asked them why they were cancelling my card they wouldn't give me a reason,' Daniel explained. Instead, Creation merely pointed Daniel to T&Cs which state it is allowed to close accounts at any time providing it gives at least two months' notice.

To his frustration, Daniel had paid a £99 annual fee for his Creation card just ten days prior to receiving the cancellation notice.

'I told them if I haven't broken any of the terms and conditions, surely I have to get a pro-rata refund for these fees,' Daniel recalled. But Creation initially refused to refund him and still would not fully explain why his account had been cancelled.

When Which? reached out to Creation with Daniel's story the firm apologised for the delay in responding to his complaint and refunded him his annual fee - but it was still unable to confirm the reason for giving notice to his account.

Creation told us it could not comment on individual cases. A spokesperson said: 'As part of our review of customers using Curve I can confirm that we did find that some customers were misusing their accounts, however, this may not have been the reason for giving notice to close a specific account.'

Which? contacted Curve for a comment but it did not respond.

Are other providers closing Curve-linked accounts?

If you're a Curve user, there's no need to panic.

We asked a number of major high street banks, such as Barclays, First Direct, Halifax, HSBC, Lloyds, Nationwide, and Natwest, if they've introduced or are planning to introduce similar policies. All of these banks confirmed there are no restrictions on using Curve with their accounts.

While Creation's policy looks like an anomaly, if you're unsure whether you'll be penalised for linking your credit account to your Curve card it might be worth reaching out to your provider to double-check.

And if you find yourself in a similar situation to Daniel, make sure you ask for a pro-rata refund for any fees you've paid if your account is being closed.

How are Curve users protected?

In lieu of Section 75, Curve customers can attempt a chargeback claim, which lets you ask your card provider to reverse a transaction. But this isn't legally binding like Section 75.

Curve does also have its own customer protection policies in place if something goes wrong with your order.

There's a 120-day deadline from the date of the purchase or receipt of goods and you must be able to prove you tried to resolve the issue with the retailer to begin with.

To make a claim with Curve, it's important that you don't contact the underlying card issuer first, as Curve's protection doesn't apply in these instances.

The maximum amount that will be refunded is £100,000 per dispute, but if you exceed this amount Curve says it will raise a chargeback on your behalf.

Remember, though, making a chargeback claim or using Curve's protection policy isn't as powerful as Section 75. If you're considering making a larger purchase, you may want to avoid using the Curve card to ensure you've got robust cover if something goes wrong.

If your Creation account has been randomly closed, or if you're struggling to get a refund for your annual fee, get in touch at yourstory@which.co.uk.