OFT to decide next step on credit card penalty fees

The Office of Fair Trading (OFT) is set to release its results from negotiations with card lenders over late payment penalties.

Reuters reported that the agency will report back on moves it made in April to demand credit card firms to reduce the fines applied against users for late payments.

The OFT had claimed such charges were often excessive, leading to accumulated unlawful penalties of £300 million each year in the industry.

A spokesperson said on Thursday: “Over the next few weeks, we will be announcing the results of our consultation and where we would go next.”

The regulator does not possess the power to impose a cap on fees, but said that several firms had already started to reduce their fines. HSBC, Barclays and Lloyds TSB have reduced fees to around £12 following the April announcement.

Banks and building societies will also be subject to any ruling on penalty fees, with the OFT’s decision likely to affect fines handed out on mortgages, store cards and overdrafts.

© Adfero Ltd

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