Latest Debt News
Banks may be forced to charge less
27/03/2006 12:46:00
The Office of Fair Trading (OFT) is this week expected to launch a clamp down on excessive bank charges, reports the Sunday Herald.
Fines which are imposed by banks for late credit card payments and bounced cheques, on average, lead to a charge of between £22 and £32.
The OFT is expected to try and reduce the average charge to between £10 and £15, as it attempts to ensure the fines accurately reflect the cost to the bank.
The news will be welcomed by those who are working to clear their debt but often find themselves losing a lot of their money to bank charges.
The proposals are however causing anger amongst credit card companies and banks, with a number of the latter threatening to withdraw their free personal banking service.
Jonathan Pierce, analyst at Credit Suisse, said: "The arguments relating to penalty charges are a matter of contract law. The OFT is acutely aware of this and following a protest outside its offices on March 3, it is expected to issue a statement very soon."
The issue surrounding penalty charges has come to the forefront in recent weeks after a man won a landmark case against Lloyds TSB, which led to him recouping £2,000 in charges.
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