The Building Societies Association has warned that the Office of Fair Trading's report into credit card fees could have a huge impact on the mortgage market. The Office of Fair Trading recently called for penalty fees on credit cards to be reduced to £12, but its report suggests that the same principle should be applied to bank overdrafts, store cards and mortgage default payments, as they believe that charges of more than £12 are 'excessive and unfair'.
They have said that the charge should only be used to cover costs such as postage, stationary, staff and technology systems. The Building Societies Association believe the Office of Fair Trading could begin looking at other mortgage fees after many complaints and scare stories about lenders tactics. The Office of Fair Trading is due to report on its findings in this month.
Our view
Whilst charges should be monitored, late and non-payers should be penalised. They should not borrow if they cannot afford it and if there is a risk of redunancy or illness or other problems not being able to pay then people should be more responsible and take out sickness and unemployment cover. Sorry, but most people are leaving this sort of cover solely for their credit card when they apply. They could, if nothing, protect their cards!