OFT Inaction on Default Charges

Debt on our Doorstep has today written to the OFT urging that they take action against excessive default charges being levied by credit card lenders. The OFT issued provisional findings that these were excessive over six months ago, but has not yet made a final decision on the matter. The reasons for the delay have not been made public.

In addition, Debt on our Doorstep have called for an immediate widening of the investigation into default charges being levied on bank accounts, and personal loans.

Calling for the OFT to launch a thorough and transparent investigation, Damon Gibbons, Chair of Debt on our Doorstep said:

"It has been clear to all concerned for some time, that many lenders are charging greater amounts for default as a means of making money and keeping the headline rates of loans down. That is happening despite clear legal precedent that default charges should not result in excessive penalties but only cover the actual loss to the lender. There is specific reference to this issue in the Regulations on Unfair Credit Terms but despite widespread disregard for those rules, the OFT is failing to act."

Debt on our Doorstep has pledged its support for the Bank Charges Action Group which is campaigning in this area and which is organising a protest outside the OFT on 3rd March 2006. For further details see the Bank Charges Action Group Forum