Skip to the page Primary Navigation Skip to the page content Skip to page Footer
The OFT closed on 31 March 2014 and this website is no longer being updated. The OFT's work and responsibilities have passed to a number of different bodies. Read more.

Press releases 2006 -

Statement on bank credit card default fees

18 May 2006

The OFT announced on 5 April at a press conference that we considered credit card default fees had generally been set at too high a level and OFT set a threshold for intervention on credit card default fees for the banks. We asked for their responses and proposals by 31 May. We said:

'The OFT now expects all credit card issuers to recalculate their default charges in line with the principles set out in the statement, and to confirm by 31 May their response and willingness to make any necessary adjustments to their fees. Credit card issuers should treat fee adjustments as a matter or exceptional priority. The OFT also calls on banks and other financial businesses to apply the same principles when calculating default charges in other consumer contracts such as bank overdrafts, store card contracts and mortgages where and as appropriate.

'As a provisional step to speed compliance, the OFT has decided that it is appropriate to give priority to addressing default charges which exceed a threshold of £12. This is less than half the figure charged by many credit card issuers at the moment. The OFT's presumption will be that credit card default charges that are in excess of £12 are unfair, unless there are limited, exceptional factors in play, for example where a card issuer has a policy of requiring customers to pay minimum monthly repayments by direct debits, such as that operated by Egg, and offers credit cards only to customers that satisfy a relatively high scoring requirement.'

Therefore, there is no change to the position as set out on 5 April. We expect responses from the banks on credit card default fees by 31 May 2006.

Back to: Press releases

Public enquiries

08457 22 44 99

Media enquiries

Russell Guthrie
020 7211 8899

Michael Rosen
020 7211 8133

out of hours mobile
(media only)
077 7413 4814

Recently viewed pages

This feature requires Javascript and Cookies to be enabled on your browser

Email alerts

Register for email alerts or amend your existing account details here.