The Financial Ombudsman Service has revealed that it upheld 'almost all' cases in the last year where credit card customers complained about rate increases.
Credit card companies tend to back down when a consumer complains about increased interest rates to the Financial Ombudsman Service (FOS), it has been revealed.
The Sunday Times reported at the weekend that of 18,000 complaints received by the FOS relating to credit cards between April 2008 and March this year, three-quarters were upheld. However, for complaints involving interest rates the proportion of successful consumers was even higher.
"Almost all the credit card companies subsequently chose to settle the complaints that had been brought against them, rather than have our investigation continue," the FOS told the newspaper.
The credit card industry has been under increasing scrutiny of late, with many providers criticised for upping rates despite the historically-low Bank of England base rate. Business secretary Lord Mandelson threatened to have the Office of Fair Trading investigate the sector last year if it did not becoming fairer to consumers.
After a summit involving major players in the industry and the government, a set of proposals was agreed upon, aimed at ensuring borrowers struggling with their finances were given extra room to sort out their situation.
Under the new measures, cardholders will be able to hold back on payments if they are consulting a not-for-profit debt advice agency.
