Did you know that the Office of Fair Trading (OFT)have ruled that £12 is the maximum your credit card can charge you for each late payment or unauthorised borrowing? What’s more, you can claim back any excess charges you’ve paid going back 6 years!

The consumer magazine “Which” and lawyers have confirmed that this gives the go ahead for customers to reclaim all credit card, store card, mortgage and bank account penalties which exceed £12.

Stephen Alexander, a partner at solicitors Class Law, said, “Now that the OFT has decided that anything over £12 is unfair, it will be a lot easier for people to succeed against the banks in the Small Claims Court. People are entitled to claim back charges made within the last 6 years”.

The OFT’s ruling will hit the banks hard. After all, last year they took around £1 billion in charges with the Halifax, part of the Bank of Scotland Group, being one of the worst offenders. They’ve been charging £39 for unpaid cheques, direct debits and standing orders. The norm amongst banks has been closer to £30.

If you want help in claiming back the excess charges you’ve paid, you can’t do better than visiting the web site run by Which. For a fee of £10, Which will provide all the draft letters you need to enable you to mount your own court claim for excess charges going back 6 years.

Emma Bandey, a spokes person for Which said, “We’re urging people to claim back what they should never have been charged in the first place. The OFT has agreed with us that these charges are unfair and we think people should be empowered to do all they can to get their money back from banks that have posted billions of pounds in profits this year”.

Banks have until 31st of May to respond to the OFT’s ruling but says that it will take court action against any that have not reduced their charges by then.

The banks response hasn’t exactly been enthusiastic! They’re expected to generally comply with the OFT’s ruling for at least some of their charges and seem bent on battling it out for others. The British Bankers Association has questioned why the OFT has extended it ruling to encompass store cards, mortgage penalties and overdrafts when the original investigation only covered credit cards.

Their spokes person said, “We are surprised that the OFT has widened the scope of its ruling when it only spoke to credit card providers. We expect our members to challenge this. We believe our bank’s products provide good value”. As Mandy Rice-Davis, an infamous prostitute caught entertaining a Government Minister said, “Well he would say that, wouldn’t he!”

The OFT’s central position is that penalties must only be used to recover administrative costs – not boost profits! The OFT’s chief executive said, “We expect credit cards issuers to adjust their default levels quickly. We have not ruled out future legal action if the market does not respond positively”.

Wow, aren’t the Courts going to be busy!

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