Late payment and over the limit fees on credit cards can be frustrating especially as they are usually applied automatically by your credit card company so you have no option to discuss the matter with your provider. Within the last five years the fees charged for these kinds of infractions has been reduced significantly. Prior to 2006 these charges were often extremely high, sometimes as high as £35. The reduction in fees was prompted by an investigation by the Office of Fair Trading.
The Office of Fair Trading came in response to numerous customer complaints regarding late payment and over the limit fees with many customers claiming they were unreasonably high and were applied regardless of whether a customer was just one day late making a payment or accidentally exceeded their limit by just one pound. Debt charities were also critical of the approach taken by credit companies to these kinds of fees accusing them of targeting the most financially vulnerable and risking potentially pushing them further into debt.
During their investigation, The Office of Fair Trading looked at the costs lenders would incur as a result of a customer making a late payment or exceeding their limit. After consideration they came up with the figure of £12 which took into consideration postage costs, staffing costs and a contribution towards the maintenance of IT systems.
Following the investigation most Credit Card Companies have reduced their fees. The investigation has also opened the door for customers who have paid unfair credit card charges in the past to lodge a complaint. Where a complaint is successful, a customer can usually expect to receive a full refund of all charges paid. Since 2006, thousands of people have made complaints, but it is thought that many more customers may have the right to.
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