Credit Card Charges

FCA have now publicised a letter sent to all credit card companies. The letter follows their review into credit card fees and charges. The key findings are as follows:

  • Customers who miss a payment are often incurring multiple charges in the same billing cycle – for example a missed payment fee, a bounced direct debt fee and a fee for going over their limit.
  • Credit card firms are authorising rather than rejecting payments that take customers over their agreed credit limit, causing customers to incur additional fees.
  • In many cases fees are being incurred multiple times in a 12 month period.

Under CONC 6.7.3 AR, firms are required to monitor a credit card customer’s account for signs of financial difficulty. Where this is found to be probable appropriate action must be taken; such as suspending, reducing or waiving further charges. FCA believe that many firms are failing to meet these requirements.

FCA is asking all credit card firms to “…consider whether their policies and procedures in relation to fees and charges result in fair consumer outcomes and are compliant with the rules and guidance…”

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