Following an approach by the OFT (Office of Fair Trading), Clydesdale Financial Services, a wholly owned subsidiary of Barclays Bank, has decided to reduce its store card default charges from £22.50 to £12 with immediate effect.
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 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 says no further intervention by it is warranted at this time.