Charges on financial products increase
Published On 20 August 2007
People in the UK are facing more fees and charges for the use of financial products like mortgages, credit cards, homeowner loans and saving accounts, new research reveals.Consumer website moneysupermarket.com found that people in the UK now face a total of 112 charges across just five financial products - mortgages, current accounts, savings products, loans and credit cards. Just a year ago, consumers faced only 110 penalty charges on these tools.
In particular, mortgages and credit card customers face many fees and charges. Indeed, mortgages now account for 51 different penalty charges. While the Financial Services Authority (FSA) issued a good practice statement on exit administration fees, the website found that many lenders simply replaced this with other costs.
Credit card users have also seen the number of penalty charges they face increase from 17 to 19 over the last 12 months.
Stuart Glendinning, managing director at moneysupermarket.com, commented: "It is galling that people are facing more penalties than last year, despite the Office of Fair Trading (OFT) and FSA turning their attention to the issue.
"It is unbelievable that five financial products can be the root of so much penalty pain. With so many default fees and charges in place, even the most astute consumer can fall foul.
Mr Glendinning added that banks and other lenders should make all their fees and penalty charges "transparent and fair from the outset".
Figures from Credit Action show that the average UK consumer has £55,567 in debt when their mortgages are included.
