OFT to probe credit card interest charges
Published On 3 April 2007
The consumer watchdog Which? has formally submitted a super-complaint to the Office of Fair Trading (OFT) about how credit card providers calculate the interest they charge customers.According to research that Which? published to accompany the complaint, the 20 main credit card providers have 12 different ways of charging interest on customers' spending.
These tactics mean that credit card companies net an extra £400 million a year, Which? claims.
"People believe that APRs are a dependable way of comparing credit cards, but our research shows that APR cannot to be relied upon for true credit card comparisons," said Alena Kozakova, a principal economist at Which?.
"Consumers have to be able to make meaningful comparisons on the basis of APR. We are calling on the OFT to standardise interest calculation methods so that consumers can compare like for like."
The OFT confirmed that it had received the complaint from the watchdog, saying: "Which? is one of a number of consumer bodies who have the power to register a super-complaint to the OFT. They have used this power and this has given us 90 days to investigate this complaint.
"All we can say is that we will do our best to investigate the complaints made to us within the 90 day period and then inform Which? of our findings."
