Plans to reduce penalty fees from £25 to £12 will not apply to people who exceed their agreed overdraft limit, says the Office of Fair Trading (OFT).
Many were expecting overdraft penalty banking charges to be cut after the OFT branded banking charges as "excessive".
However, it has emerged that the OFT's main target was credit card providers and they want them to cut their penalty charges for late or missed payments.
Credit card providers were set a deadline to reduce fees or face possible legal action. The OFT ruled that credit card charges were "unlawful" as consumers were being charged more than a court would grant if the provider sued the consumer for breach of contract.
Commenting on this revelation, Stuart Glendinning, director of the price comparison website, Moneysupermarket said that although banks will be sighing with relief at the news, consumers will lose out.
"Current account consumers will hardly be pleased that the oppressive fees applied to unauthorised overdrafts have apparently won a stay of execution," he said.
Overdraft banking penalty fees will not lower, says OFT
Overdraft banking penalty fees will not lower, says OFT
Fri, 19 May 2006
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