Some of the UK’s largest credit card providers have said that they will not challenge an Office of Fair Trading (OFT) order that they must slash their penalty charges.
Barclays, HSBC and Lloyds TSB all said that they will comply with OFT recommendations that penalty fees be priced no higher than £12.
“Which? is pleased that these providers have acknowledged that their credit card charges are too high,” said Doug Taylor of Which?
“We welcome their decision to cut the charges and hope other banks and credit card providers follow suit.†
“Earlier this year, the Office of Fair Trading said that the suggested £12 charge may not necessarily be fair, but that anything above £12 is likely to be unfair.
“So, we still do not know whether the £12 actually represents a fair charge and repeat our call to all providers to open their books to scrutiny and show the true costs involved.”
While consumer rights groups have cheered the announcement, some warn that card users will continue to fund bank profits through increased interest rates.
The fees have played a large role in keeping credit card profits buoyant in the face of bad debt and rising best rates of credit will fill the profit gap, warned analysts.
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