Penalty charges around every corner

A typical portfolio of a mortgage, current account, savings product, loan and credit card could incur as many as 110 penalty charges, Moneysupermarket has found.

Stuart Glendinning, managing director at the website said that it was “unbelievable” that there were so many charges and warned that even careful consumers could risk being hit.

“There is a huge number of default and penalty charges of which even the most astute consumer can fall foul,” he warned.

His comments come as Ofcom ordered banks to cut down the size of their penalty fees, but it appears that such a move has not affected the proliferation of such charges, which are often money-spinners for banks at the expense of people in debt.

Mortgages were said to be the worst for such penalties and fees, notching up 46, while even savings had five, including the loss of interest.

Mr Glendinning called the number of penalty charges faced by consumers “shocking and the lack of transparency is equally bad” and urged consumers to read the small print to avoid being caught in extra debt they need not take on.