1 April 2008
OFT finally deals with Barclays Partner Finance credit card default fees
Press release issued by Bob the Bankbuster on 2 April as follows:
"OFT FINALLY ACTS OVER EXCESSIVE DEFAULT CHARGES ON CREDIT CARDS BY BARCLAYS
Nearly two years after the OFT issued its report on excessive default charges on credit card accounts, it has finally managed to secure agreement from Barclays Bank to reduce the charges on its Clydesdale Financial Services cards to the industry standard of £12. This action only happened because of a complaint made by bank charges campaigner, Bob Egerton.
Campaigners have been fighting what they contend are unlawful penalty charges on credit cards and current accounts since 2004. In April 2006, the Office of Fair Trading issued a report that concluded that as far as credit card accounts were concerned, any default charge greater than £12 was probably unfair and unlawful under The Unfair Terms in Consumer Contracts Regulations 1999. [Note: penalty charges on current accounts remain as work in progress as we await the decision in the OFT vs. Banks test case - not expected until July 2008.] Rather than take legal action to enforce its recommendations, the OFT chose to allow banks "voluntarily" to reduce their charges to this level. The majority grudgingly did so by July 2006, but it seems that not all complied with the guideline. Clydesdale Financial Services Ltd. continued to levy default charges of £22.50, frequently imposing two such charges on an individual's account in one month. These charges also continued after Clydesdale's credit card operation was taken over by Barclays in 2007, when it became Barclays Partner Finance. In October 2007, Bob Egerton lodged a complaint with the OFT and asked for urgent action to be taken. After 6 months, the OFT has finally announced that Barclays has agreed to reduce the charges to £12. The OFT has hailed this as "a great result for consumers". No sanction has been imposed against Barclays for flouting the report for so long.
Bob Egerton says, "Whilst I am pleased that action has finally been taken, nobody can be satisfied with a publicly funded organisation allowing this bank to stick two fingers up at it for 2 years and continue to take millions of pounds from its customers in blatantly unfair penalty charges. The OFT had not put in place any mechanism to monitor compliance with its report. If I had not brought it to its attention, Barclays would still be charging its customers up to £45 per month for minor infringements of its terms. Another credit card company, Egg, still imposes default charges of £16 and the OFT appears to be doing nothing about this. When it comes to dealing with Britain's banks, the OFT is spineless. It is time that new management was brought in who are committed to fighting for the interests of Britain's consumers rather than appeasing big City interests."
The OFT report and yesterday's press release can be viewed at:
For further information, contact Bob Egerton"
For BBC story on Clydesdale Financial Services, see store cards
For other news stories, see news
Published and promoted by Bob Egerton, TR2 4RS