Some credit card late charges exceeding OFT cap

| June 27, 2007 | 0 Comments
Some credit card late charges exceeding OFT cap

Despite a recent cap imposed by the Office of Fair Trading on the amount that credit card companies can charge customers for late payments, price comparison website moneysupermarket.com is reporting that many credit card providers are exploiting a loophole that allows them to collect more than the £12 maximum allowed per late payment. By charging interest on the penalty if it is not paid immediately, the providers are pushing the fee above the allowable maximum.

The head of credit cards for the website said that most credit card providers have always charged interest on penalties and contends that the OFT should have specifically mandated that the practice be halted so that late payment penalties would remain below the cap. He also said that because it is the poorest customers who are most likely to default on payments, the OFT needs to watch for such loopholes. A separate study from market researchers YouGov shows that 13 percent of credit card customers in the UK paid at least five default penalties last year.


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