by business editor Trevor Sturgess

A credit card firm has been rapped by a judge for "railroading" a Kent customer and wrongly charging compound interest.

American Express was criticised in Maidstone County Court in a case that may have implications for other card-holders.

American Express Services Europe claimed the sum of £6,809.83 from Maidstone businessman Terry Armstrong for purchases and cash advances on an Optima credit card held since 1990.

Mr Armstrong, a former self-made millionaire, and his family have twice been thrown out of their £500,000 cottage in Hollingbourne, after his business Triple A Multi-Media Group was hit by the downturn and he was unable to pay a legal bill.

He is now living in rented accommodation and has taken up the cause of repossession victims through a website www.the-repossessed.com

Mr Armstrong defended the claim on the grounds that American Express had wrongly charged compound interest. American Express had conceded the point by reducing the bill from £12,000 by waiving known interest charges, late payment and other fees, and leaving only purchases and cash advances.

Clive Wolman, for Mr Armstrong, claimed that because American Express had wrongly charged compound interest without formally notifying customers, the entire bill was unenforceable.

Because American Express had routinely destroyed all paperwork after seven years, and no documents prior to September 2001 were available, he argued that uncertainty over the actual sum owed by Mr Armstrong should also rule out the claim.

But Judge David Caddick ruled that the bill was enforceable, although he agreed that without supporting documents before September 2001, it was impossible to know the precise sum. He therefore reduced the Amex claim by £2,000 to £4,809.83.

Judge Caddick added that this particular litigation had gone on in a way that suggested it was being used to "railroad the defendant into early submission."

There was no order as to costs and the judge refused leave to appeal.

Outside the court, Mr Armstrong was disappointed. "The judge spent the whole time berating Amex but then ruled in their favour," he said.

In a statement, American Express said: "We are reviewing the outcome of this case and take the judge's comments seriously. It is our policy not to comment on individual cases and we are awaiting the publication of the court's own records of the hearing."