Late fees on credit card bills 'still unfair'
Published On 27 June 2007
Credit card companies are using a loophole to continue to charge their customers high fees on late payments, new research suggests.Recently, the Office of Fair Trading (OFT) placed a cap on the amount that credit card companies could charge customers if they paid their bill late.
However, price comparison website moneysupermarket.com has found that many lenders are exploiting a loophole which in effect means they are charging more than the £12 cap.
Many lenders are charging credit card customers interest of the penalty if it is not paid off immediately.
"In effect, the addition of interest is taking the default charge above the limit imposed by the OFT," explained Rob Kenley, head of credit cards at the website.
"The majority of banks have always added interest to default charges, so the OFT should have stipulated this practice had to stop."
Research by YouGov found that 13 per cent of UK credit car customers paid at least five default charges in 2006.
Mr Kenley added: "It is the poorest consumers who will typically default, and they need the OFT to be on top of its game at all times.
"It should be commended on its work for consumers but this is a wake-up call to it to work even harder."
