Reclaim Credit Card Charges

Back in 2006 credit card charges were investigated by the Office of Fair Trading (OFT) and it was ruled that the current charges for credit cards were too excessive and a threshold of £12.00 was brought into place.

This investigation by the OFT took around 18 months to complete which allowed the credit card companies to begin adjusting their fees or face a full scale investigation – which could have seen lenders forced to reveal the true costs in Court.

In the past credit card charges have been set at levels where many argued the actual costs of the charges did not reflect the associated costs of recovering the debt owed. These credit card charges often took the form of a late payment fee or overdraft charge.

According to the Office of Fair Trading, the credit card fees that have seen millions of families pushed into further debt were ‘disproportionately high’.

The OFT concluded that the default charges (or late payment charges) should be cut to a more acceptable £12. This was subsequently accepted by the banking community and in turn the charges were slashed.

By taking out a credit card you are in effect entering into a contract with the credit card issuer. If you were to breach this contract by making a late payment or exceeding your agreed credit limit then the courts can enforce payment on the debt you owe.

However, the sum of the charge must reflect the actual costs incurred or the default and not exceed the damages the bank has suffered as a result of the breach, otherwise this is classed as a penalty, which isn’t enforceable by the courts.

The argument that the charges exceed the customers losses are not enforceable by law is covered in the Unfair Contract Terms in Consumer Contracts Regulation 19999, Unfair Contract Terms Act 1977 and at Common Law.  Some banks argue that these charges are a fee for a service, however if this is the case then they must be reasonable under S.15 of the Supply of Goods and Services Act 1982.

Average Refunds per credit card as we stand are £590.00!  If you have had a couple of cards you could be owed thousands of pounds.