UK Credit Card Probe to be Expanded

The Office of Fair Trading (OFT) has announced it is to expand its inquiry into UK credit cards by looking into credit card fees.

The UK consumer watchdog will broaden the parameters of its investigation and probe "interchange" fees, which retailers pay to banks that issue credit cards.

A statement from the OFT said: "The expansion of this investigation is consistent with the scope of the European Commission's current investigation into MasterCard's European intra-regional interchange fees.

"In conducting the new investigation, the OFT will seek information from card issuers and other parties as it considers appropriate."

The OFT is of the opinion that these fees are currently excessive and equated them to a consumer tax. The watchdog is currently investigating MasterCard and Visa's interchange fees on consumer and commercial credit cards, charge cards and deferred debit cards. In fact, the OFT has been investigating MasterCard's fees for the past seven years.

MasterCard has since altered its fees system although the OFT launched a probe into the new fees in February of last year. MasterCard currently has 30 million cardholders in the UK, making them one of the leading players in the UK credit card market.

With the OFT ruling last year that credit card fees levied on customers for late payments were excessive and unfair, the UK credit card market is under intense scrutiny as Britain battles its mountain of personal debt.

Many UK consumer groups feel that credit card issuers are partly to blame for Britain's growing debt epidemic, with some more than willing to issue cards to those who may struggle to repay any debt as well as levying hefty fees for defaulting on payments, cash withdrawals and exceeding agreed credit limits.

Alisdair Milton
13th February 2007

More Information:

• Credit Card Charges
  Credit cards appear to have only one cost to a user – the interest charged on purchases, but there are a whole raft of hidden charges just lurking below the surface. So, some cards offer an annual payment option in return for certain benefits. What is the best option, and in what circumstance
• Making Credit Card Fees Easier To Understand
  On average, UK credit card issuers make somewhere between £300 and £400 million a year in fees charged off of UK credit card users who have not fully understood how the credit card issuer has arranged the charging of their fees and who do not complain directly to the card issuer for any excessive or incorrect fee charges. In anyone’s language, this is a staggering amount of money!
• How To Avoid Paying Those Pesky Credit And Debit Card Fees
  It seems that UK credit and debit card providers would like to charge us each and every time we use our plastic cards these days. While the charge for each separate individual transaction may not seem like much, add them up over a month or two and suddenly the amount has some value. So, how do we avoid having to pay pesky fees to UK credit and debit card providers?

More UK Credit Card News
Try our feed