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The Office of Fair Trading (OFT) threatening to slash the account fees and
penalty charges levied by banks.
An OFT investigation into the level of bank charges has been welcomed by
consumer groups, many of whom have accused the banks of overcharging consumers.
The announcement follows confirmation by the watchdog that credit-card companies
had buckled to its demands for cuts in penalty charges applied to those who fail
to meet minimum payments.
Revenues from penalty charges are estimated at £5 billion by some consumer
groups.
The investigation could result in average penalty fees for unauthorised
overdrafts and bounced cheques falling from £25 to under £12.
Experts expect that moves to force through cuts in penalty charges would spell
the end of free banking, as the banks clawed back losses by levying fees to
manage current accounts.
John Fingleton, the OFT's chief executive, commented: "The reduction of default
charges on credit cards is great news for consumers.
"By taking an innovative approach to this issue, the OFT has brought about a
significant change in one area of the financial services sector.
"We are now extending that work to inform ourselves about account default
charges.
"We welcome the willingness of organisations such as the BBA to work with us in
looking at the application of the principles we set out in April to this area."
A spokesman for the British Bankers' Association (BBA) said bank charging
policies were legal and fair and that an investigation would support this view.
Source:
Getting Paid
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