APACS response to the OFT announcement on default charges
Date: 06 April 2006
Paul Smee, APACS Chief Executive, said: "The OFT has today given its interpretation of the law. It has based its conclusions on information from just eight card companies; the rest of the market and APACS were not asked to participate. Therefore every individual card company will now have to consider whether it agrees with the OFTs interpretation and whether the way in which its own charges are calculated is in line with the OFTs approach. This will not be straightforward and the individual companies have been given until the 31 May to undertake this." Card companies have argued that the default charges that they have historically charged have been fair, transparent and lawful. Any change will have no direct impact on the eight out of 10 people who don't pay default charges in any one year. Reductions in default fees might be welcomed by some customers but it makes more sense to avoid these charges by simply setting up a direct debit to always pay off at least the minimum balance each month."
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