Credit card companies have been told by the Office of Fair Trading (OFT) to cut their penalties for late payment of bills .
Late penalties could now be halved after the OFT ruled that excessive penalties had resulted in unacceptable charges of over 300 million pounds a year.
The OFT hope this decision will also ultimately be extended to other penalties charged on financial products such as overdrafts, store cards and mortgages .
The industry watchdog has warned credit card companies to change their penalty fees or face legal action.
Credit card companies now have until the end of May to lower their charges to approximately £12.
"We expect credit card issuers to adjust their default fee levels quickly. We have not ruled out future legal action if the market does not respond positively," commented John Fingeton, the chief executive of OFT.
Late penalties for credit card payments to be cut
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Late penalties for credit card payments to be cut
Thu, 06 Apr 2006
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