uSwitch appeals to OFT over charge cap

The website wants the OFT to introduce a £12 cap and not to back down on such a move, especially as “unfair” charges can add to debt.

“Penalty charges are a huge money-spinner for the banks – the source of an estimated £2 billion a year in revenue – and one that they will not give up lightly,” commented Nick White, head of personal finance at uSwitch.com.

“Throwing down the gauntlet to the industry in this way was a bold move by the OFT, and we urge them not to back down now.”

Banks had until the end of May to respond to proposals for a cap and Mr White described their stance as “defiant”.

Debate is expected to continue to rage over the coming weeks and could apply to the wider market.

Mr White hopes the OFT will win the fight and establish a legal precedent for other penalty charges, something that could help save consumers increasing their debt levels in the near future.