Have You Been Unfairly Charged on Your Credit Card? How to Claim Back Penalty Fees
Published 18th of March 2016·Updated 25 April 2026
Reviewed by: Reviewed for accuracy April 2026
If you held a credit card before April 2006 and were charged more than £12 for a late payment or exceeding your credit limit, you may be entitled to reclaim part or all of that charge. In 2006, the Office of Fair Trading (OFT) ruled that penalty charges above £12 were likely unfair, and many card holders successfully reclaimed money as a result.
Short Summary
In 2006 the Office of Fair Trading determined that credit card penalty fees above £12 were disproportionate and likely unlawful. Charges before that date were sometimes as high as £25 to £35 per incident.
You can write directly to your credit card provider to request a refund of charges above the £12 threshold, plus statutory interest calculated from the date the charge was applied.
If your provider refuses or ignores your complaint, you can escalate the case to the Financial Ombudsman Service at no cost to you.
Even for cards taken out after April 2006, it is worth checking statements if you believe you were charged more than £12 per incident, as some providers were slow to revise their fee schedules.
What did the OFT ruling actually say?
In April 2006, the Office of Fair Trading published a report concluding that default charges on credit cards, including fees for late payments and exceeding a credit limit, should not exceed £12. The OFT's position was that higher charges did not reflect the true cost to the lender of the "offence" and were therefore likely to be unfair under the Unfair Terms in Consumer Contracts Regulations 1999.
Before this ruling, several major credit card providers were charging between £20 and £35 per incident. Following the OFT's intervention, most providers reduced their fees to £12. Customers who were charged above this level before 2006 have reasonable grounds to seek a refund of the excess amount.
How do I know if I was overcharged?
Check your old credit card statements for any line items labelled as penalty charges, default fees, late payment fees or over-limit fees. If any of these exceeded £12 and were incurred before April 2006, you have potential grounds for a claim.
If you no longer have your old statements, contact the provider and request a copy of your account history. Under data protection legislation, providers are required to supply records held about you, though they may charge a small administrative fee.
How to write a complaint letter to reclaim charges
Your letter should be clear and factual. Include the following:
- Your full name and account number
- The dates and amounts of each charge you are disputing
- A statement that you believe the charges were disproportionate under the OFT's 2006 guidance
- The amount you are requesting as a refund, including any statutory interest
- A request for a response within 14 days
You can claim for the full amount charged, the difference between what you were charged and the £12 recommended maximum, or both figures plus statutory interest. Claiming the difference between your charge and £12 is often resolved faster, as providers are more willing to agree to a partial refund. However, you are entitled to press for the full charge if you choose.
Attach copies (never originals) of the relevant statements to support your claim.
What if my credit card provider refuses to refund me?
If the provider does not respond within 14 days, or if they reject your claim, send a follow-up letter referencing your first contact and requesting a formal final response. Keep copies of all correspondence.
If the provider issues a final rejection or fails to respond after a second attempt, you can refer the case to the Financial Ombudsman Service (FOS) at financial-ombudsman.org.uk. The FOS is free to use and independent. A case worker will review the evidence from both sides and make a binding ruling. The FOS typically takes several weeks to several months to resolve a case, but the success rate for genuine overpayment claims has historically been high.
Can I still claim if my card was taken out after April 2006?
You can still submit a complaint if you were charged above £12 after April 2006, though the success rate is lower because most providers updated their fee schedules promptly after the OFT ruling. If you have statements showing charges above £12 from this period, it is worth raising the issue with your provider, citing the OFT guidance.
| Scenario | Chance of success |
|---|---|
| Charged above £12 before April 2006 | High |
| Charged above £12 after April 2006 | Lower, but worth trying |
| Charged exactly £12 from 2006 onwards | Very unlikely to succeed |
Will making a claim affect my credit score or my relationship with the provider?
A valid complaint to a credit card provider will not directly damage your credit score. However, if the provider considers you a difficult customer, they may choose not to offer you promotional deals in future, or in some cases close your account once any refund has been paid.
If you still have a balance on the card and are concerned about a potential account closure, consider applying for a 0% balance transfer card before you raise the complaint. This protects you if the provider decides to close your account once the claim is settled.
Frequently Asked Questions
Is there a time limit for reclaiming unfair credit card charges?
There is no hard statutory deadline that applies universally to these claims, but the older the charge, the harder it may be to evidence. Many providers retained records for six years before 2006. If you have your own statements, your claim is evidenced regardless of what the provider holds.
How much statutory interest can I add to my claim?
The standard statutory interest rate is 8% per year, calculated from the date the charge was applied to today. There are free online calculators that will do this calculation for you if you enter the date and amount of each charge.
Do I need a solicitor or claims management company to make this kind of claim?
No. You can submit the claim yourself directly to the credit card provider by letter or email, and escalate to the Financial Ombudsman Service for free. Claims management companies will charge a fee or take a percentage of any refund. There is no advantage to using one for a claim of this type.
What evidence do I need to support my claim?
Your credit card statements showing the dates and amounts of the charges are the primary evidence. If you no longer have these, write to the provider requesting your account history under a subject access request (SAR), which they are legally required to fulfil under the UK GDPR.
Can I claim for charges on a closed account?
Yes. The account does not need to be active for you to raise a historical complaint. Your complaint relates to charges that were applied during the life of the account, not to any current agreement.