Credit Card Companies Receive Warning From OFT

There has been some good news on the charges that the credit card companies and banks charge us, in late payment fees and going over the limit on your plastic.

The Office of Fair Trading (OFT) has written to all the main players in the credit card market, telling them that they’re charges were way and above what they should be charging, though none of the 8 card companies that were written to have been disclosed.

OFT have claimed that the £25 fees and charges that these banks and credit card companies charge, though the lenders have hit back that the customer don’t have to pay the charges if they pay their bills on time when they are meant to and believe that the charges are fair.

But a spokes person from the consumer body Which? Has welcomed the move by OFT, saying that the move is great for credit card customers and with Oft also saying that any company that is found to over charging, that they would seriously consider taking action against any company that did not drop the charges that they making to a acceptable level.

There have though been a couple of the card providers, who have confirmed that they were recipients of the letters that OFT has sent out, one of those being HSBC who have said that they originally set out to OFT in they’re original submission, as why they thought that they’re fees and charges were fair and that some of OFT’s recent recommendations, hold some intricate legal arguments, that would have to be seriously looked at and worked on.

HSBC also currently charge fees that are lower than most, but are still being deemed by OFT, to be set too high. They currently charged anywhere between £5-£20 for things such things as late payment’s, exceeds their limit or the payment that they have made has not been honoured, either by check or with a Direct Debit.

The other lender who has also felt the need to defend they’re corner has been Barclaycard, who have said things along the same lines as HSBC and added that the customer is well aware of the charges as they are not hidden and with so many different ways that you can now settle your bill, there is no reason why it cant be paid on time.

But the fact is, these lenders are making millions of pounds a year from these charges and to say that they cover the costs of administration after someone has failed to pay on time, doesn’t really wash does it, as why can so much be made in profit from these charges, when they are only to cover costs? When really they are so high to cover the special deals that they are losing money on trying to attract new customers.