UK's OFT May Limit Late Charges On Credit Cards
Jill Treanor reports for The Guardian that the UK's Office of Fair Trading may be considering limiting the size of the late charges that credit card issuers assess cardholders when payments haven't been received by the due date. Treanor's article says that currently those charges are about £25 and the OFT's action would likely limit the maximum amount to £15 - which could cost the card issuers in the UK up to £400 million in lost revenues.
The OFT has refused to discuss its investigation. A spokeswoman said: "We haven't put a timescale on it. This is bound by conditions of confidentiality."The major credit companies refused to comment either. Some are thought to have made it clear to the OFT that they will take legal action if the watchdog rules out default charges altogether. They are also concerned that the OFT will find a way to transfer its argument about credit card default charges to mortgages and overdrafts in a move that would further reduce revenues.
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