press release

CONSUMERS could be hit with swingeing penalties from late credit card payments as a result of the post strike unless they take the initiative themselves, warns personal finance comparison site Moneynet.co.uk.

“Those borrowers who put cheques in the post to their lenders over the last ten days or so stand to incur a late charge as their remittances languish in the Post Office’s overflowing depots,” says Moneynet.co.uk chief executive Richard Brown.

In the league table of lenders’ unpopular punitive measures, credit card late payment charges make borrowers’ blood boil. Despite the Financial Services Authority’s move last year to coerce lenders to reduce fines from around £25 to £12, borrowers still bristle at being charged a disproportionate amount for missing their due date, even by a day.

“With little or no deliveries this week and a huge backlog of post to be dealt with, millions of people could be affected unless they pick up the phone to their lender and stamp out the possibility of being treated as a bad payer,” says Brown.

Don’t rely on a third party – the quickest solution to the problem is to make payments online or walk into a bank, he advises.

“Many borrowers who never make late payments are likely to find themselves tripped up by the breakdown of the postal service and will end up paying for something that is not their fault. ”

“Card companies should be taking steps to identify those borrowers who regularly stick to the rules and ensure they are not punished for something that’s out of their control. If they don’t, they will be making a huge windfall from others’ misfortune.”

And it’s not just credit card companies that could be benefiting from the post strike. Some utilities companies such as BT also slap on a late payment charge for customers who don’t meet their deadline. All consumers should double check their bills and statements when they eventually do land on the doormat as the due date could be much sooner than they think.

“Many firms are willing to bargain with disgruntled customers and may agree to reduce the fine when asked, but the onus is on the borrower to make the call and ask the question,” adds Brown

“A permanent way of avoiding late charges is to set up a monthly direct debit. Losing a bill, going on holiday or simply forgetting – all can result in a nasty fine so the failsafe way to avoid paying money for nothing in the future is to set up a regular arrangement. And what’s more many companies will even offer a discount to those customers who are willing to pay in this way,” he concludes.

* BBA/BSA data, April 2007