Card Companies Defiant Over Charges
Major credit card companies resisting OFT criticism of late charges
20th October 2005
Credit card issuers are remaining defiant in the face of Office of Fair Trading (OFT) criticism of their late and default charges, according to a report in today's Guardian newspaper.
The OFT told eight companies in July that the charges made for late payments, defaults and other account misdemeanours were too high, and were punitive rather than reflecting the administrative costs incurred by the issuers in handling late payers.
According to the report, while some companies have privately accepted that they will have to lower their fees, major companies such as Barclaycard and MBNA are preparing to take a stand to protect the lucrative fees, believed to be worth up to £1bn a year.
It's further understood that the companies concerned fear that if the OFT is sucessful in this case, it may apply the same arguments to other areas of their businesses such as banking and mortgages, which could be hugely costly for the industry as a whole.
Read More: Guardian Report : Credit card firms resist calls to cut fees
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