CAB welcomes OFT announcement

08 September 2006
The Citizens' Advice Bureau (CAB) has said it is "very pleased" with the Office of Fair Trading (OFT) announcement that credit card companies have agreed to reduce their default charges.

The OFT statement suggests that after a review of the processes and fees being charged by credit card lenders, default fees were disproportionately high.

Consumers had long complained of the extortionate fees being charged for incomplete or late payments and reaching credit limits and the news that the majority of card companies had slashed their fees by nearly half would be widely praised, analysts said.

The next area for the OFT to investigate would be basic bank accounts – current accounts aimed at low earners and those on benefits, the CAB said.

"We expect this work to include the magnitude of charges on basic bank accounts, aimed at the poorest of people," said Teresa Perchard, director of policy for CAB.

"These accounts enable those who have previously had difficulty opening a bank account to benefit from the financial incentives of paying utility bills by direct debt.

"However, some basic bank accounts charge as much as £39 for 'bouncing' a direct debit – which is very nearly a whole week's money for a person under the age of 25 on Income Support."

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