OFT set to rule on late payment fee's

file_wizzard

Courtesy of "checkmyfile.com"


Lenders to be forced to slash late payment fees

The Office of Fair Trading is set to force lenders to slash the penalties they currently charge card holders for paying late by as much as 40%.

Lenders make up to £2 billion a year from late payment penalties, and it is estimated that the reduction in charges could cost them up to £1.5 billion annually.

The OFT is proposing to cap the fee that lenders can charge customers for late payment at £15, although there are calls from consumer watchdogs to reduce this even further, to as little as £5. As shown in the table below, the major UK card issuers currently charge between £20 and £25 every time a customer pays late.


Company Number of
Card Holders Late
Payment Fee
Barclaycard 9 million £20
Halifax 7 million £25
MBNA 6 million £25
Lloyds TSB 5 million £20
HSBC 4 million £20
Nationwide 900,000 £20
American Express 800,000 £25


We see late payments on most credit files that we analyse – it’s human nature to forget occasionally. By forgetting the odd payment deadline, or by not checking statements carefully enough, it’s possible that you will not only have to cough up the late payment fee, but also damage your credit rating.

amosworks

It's about time something was done about this, but I think even £5 is daylight robbery!

mintymoneysaver

But banks are out to make money out of us aren't they?They're not a charity.I do think the charges should be a lot lower, but if you don't pay on time I'm sure there will always be some sort of penalty.

spaghetti_monster

It does make me a bit mad to think of all the bank charges I have racked up over the years :mad:

More recently I have used a combination of pleading and sweet-talking and sometimes they can take the charges off.
Last summer I set up an internet payment from bank to credit card for £100 for a month when I would be away. But.....I typed an extra 0 by mistake and the bank tried to make a payment of £1000 - hence charges from both sides! :doh:
My credit card removed the charges after I explained - I just thought I'd give it a go!

It will be great if they are forced to lower the charges. I've always thought they were far too high and often wished I could apply my own equally extortionate charges when they balls up!

circuit

mintymoneysaver wrote:

But banks are out to make money out of us aren't they?They're not a charity.I do think the charges should be a lot lower, but if you don't pay on time I'm sure there will always be some sort of penalty.

It's unlawful for a bank to penalise you financially.