Are Credit Card Penalty Charges Unlawful?
If you have a bank account, credit card or loan of any type you will no doubt be aware of the fees you are charged by your bank should you transgress their rules of business. Types of charges include late payment fees, exceeding overdraft and credit card limits, bounced cheque fees, refused direct debits, standing orders and other payments. It is possible to reclaim credit card charges easily.
British Consumer Law states that any charges credit card providers and banks levy on their customers must be proportional to the actual costs the lenders incur. The question is this, ‘does it really cost £35 to send an automated letter when someone’s gone 1p over their limit?’ The credit card lenders are not supposed to fine you; yet over the years that is what they’ve done whenever people have missed credit card repayment dates or exceeded their credit limit. For this reason you should be able to get back the last six years’ worth of fees and charges. It is no surprise that the UK credit card industry made somewhere in the region of 9 billion pounds profit last year from interest and charges paid by consumers.
Even the OFT says credit card charges are unfair
It was not realised at the time but a report in April 2006 by the Office of Fair Trading (OFT) was absolutely crucial in supporting the case for reclaiming credit card charges. Having investigated credit card charges the OFT said, in plain English, that it would not launch a specific investigation on any card companies with charges lower than £12. While the OFT ruling had no technical power, across the board, most credit card companies reduced their charges to £12. This was of course a positive step but actually this amount, I feel, is still far too excessive. The real administration costs are usually little more than a few pounds. It has made it a lot easier to reclaim back the difference between what you were charged and the £12 figure. Therefore for each £35 charge, you could receive a refund of at least £23 although many people receive the whole £35.
The bank charges test case doesn’t impact on reclaiming credit card charges.
You may have read of the OFT’s decision to introduce a Bank Charges test case which has led to the financial regulator, the FSA, putting a hold on reclaiming. It’s important to understand this is specifically about bank charges and does not apply to credit card charge re-claims.
There are a number of excellent companies who offer a first class service in reclaiming credit card charges for you. They act on a no-win-no-fee-basis and usually charge a percentage of the total charges refunded to you which varies from company to company.
