Martyn Oates The Politics Show South West

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Concerns are mounting over debt levels

Cash registers are ringing across the South West as the Christmas shopping spree gets underway.

Christmas is a time of year when many people experience their credit cards and overdrafts reaching their limit.

And for every payment that is overdue or cannot be made, the banks and credit card companies levy a charge against the customer.

But Andrew George, MP for St Ives, claims the amount charged is extortionate, and is campaigning to get them set at a lower level - or even abolished altogether.

For every cheque, direct debit, or credit card balance payment that cannot be met due to insufficient funds in the account - the banks and credit card companies will charge customers some �25 a time, which can often lead to spiralling debts.

Students especially can fall prey to these extra payments:

In July 2005, the Office of Fair Trading ruled the charges were unfair under the terms of Consumer Contract Regulations 1999.

"In a consumer contract, a default charge is likely to be disproportionately high if it is more then a genuine pre-estimate of the damages that the card issuer would win in court if it sued the cardholder for breach of contract."

The OFT called upon the banks and credit companies to justify the charges or remove them, and gave the institutions three months to respond.

But that deadline passed in October 2005, and now Mr George says the OFT's credibility hangs on how it proceeds with this issue.

It is estimated that Britain's high street banks make around �3bn a year from these punitive charges.

Mr George says every day the OFT delays in its ruling, that is another �3m profit for the Banking system.

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