Following an approach by the OFT, Clydesdale Financial Services Limited, a wholly owned subsidiary of Barclays Bank plc, has decided to reduce its store card default charges from £22.50 to £12 with effect from today.
This action, prompted by a consumer complaint, follows earlier work by the OFT on credit card default charges. In April 2006, the OFT stated that credit card default charges had been generally set at a significantly higher level than was considered fair. The April statement also indicated that the OFT considers that the broad principles outlined in relation to credit card default charges apply to default charges in other standard agreements with consumers such as those relating to store cards. In view of the proposed reduction in charges by Clydesdale Financial Services, the OFT is satisfied that no further intervention by it is warranted at this time.
Mike Haley, OFT Head of Consumer Protection, said that this is a great result for consumers and we are very pleased that Clydesdale Financial Services has decided to reduce its charges.