Card penalties 'hit one in four'
One in four credit card customers has had to pay a penalty fee in the past year, a survey suggests.
Customers pay out an estimated £230m a year in penalty fees, says financial website Moneysupermarket.com, which conducted the survey of 2,116 people.
Penalty fees are imposed by card firms when customers miss a repayment.
Last year, the Office of Fair Trading (OFT) said card penalty fees were "disproportionately high" and imposed a £12 fee cap on card providers.
Since the price cap was imposed all providers have lowered their penalty fees.
However, the fees are still providing a source of income for card issuers.
"Penalty fees still affect a significant proportion of the population and providers are raking in some hefty cash, even after the Office of Fair Trading-imposed £12 cap," said Rob Kenley, head of credit cards at Moneysupermarket.com.
But Mr Kenley added that consumers would not be happy if providers replaced penalty fees with standard monthly or annual card fees.
Just one in eight credit cardholders said they would like to see penalty fees replaced with a set monthly or annual charge.
"If providers were thinking about introducing them (monthly or annual charges), they would have to offer cardholders much more than simply replacing penalty fees," Mr Kenley said.
Source: bbc.co.uk
Please post any news stories about IVAs here:
http://www.iva.co.uk/forum/default.asp?CAT_ID=5
See my Blog:
http://ivanews.blogs.iva.co.uk
