t is a new rule that may
have the banks running The Office of Fair Trading made
scared. As of May 31, money the rule because it felt
lenders are no longer allowed to penalties should be there simply
charge sky-high penalties for as a way for organisations to
late payments on credit cards, recover costs, rather than profit
store cards, mortgages, loans and from people who have borrowed
overdrafts. The most they are, in money in the first place.
fact, allowed to charge is £12.
And if they do not make the In reaction to the new rule, the
changes to these charges by this British Bankers Association has
date, it is possible that these promised to challenge some of the
money lending outfits will be cases. A spokesperson for the
taken to court and made to pay organisation says they thought
up. that the OFT’s decision should
only apply to credit cards rather
What this means is that outfits than all sorts of other money
like Halifax, which is part of lending situations. The reason
the Bank of Scotland group, can being, is that the investigation
no longer charge £39 for unpaid that the OFT carried out before
cheques, direct debits and it made the rule was only into
standing orders. Neither will the situation surrounding credit
other banks, which have penalty cards exclusively.
rates usually about £9 less than
this. “We are surprised that the OFT
has widened the scope of its
And on top of this, the people ruling when it only spoke to
who were charged these staggering credit card providers. We expect
rates dating back six years can our members to challenge this. We
claim them back. believe our bank’s products
provide good value”, the British have wracked up debts through
Bankers Association spokesperson accruing credit card fines. At
says. least now they can get some of
their money back. And the
But partner at Class Law consumer magazine ‘Which’ can
Solicitors, Stephen Alexander, help you.
says banks will have little
chance of being successful of a ‘Which’ magazine says for £10, it
legal challenge against the new will provide all the paper work
rule in a small claims court. one needs to apply for a rebate
“Now that the OFT has decided on excessive fees. The
that anything over £12 is unfair, information can be obtained
it will be a lot easier for through the website
people to succeed against the www.which.net.
banks in the Small Claims Court.
People are entitled to claim back Banks make billions of pounds
charges made within the last 6 worth of profits each year, so it
years,” he says. might seem that this ruling will
hardly create even a dent in
While this rule, however, might those profits. But at least it
be bad news for the banks, it makes them play fair – and give
provides probably some comfort to you some of your money back.
all of the people out there who
About the Author:
Loan House is a large website offering its clients Bad Credit loans.
Read more articles by:
Michael Challiner
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